Neutralizing the Bullwhip Effect to Manage Extreme Demand Volatility

Much of the difficulty we are currently experiencing in trying to balance supply anddemand is due to the bullwhip effect, whereby even slight changes downstream in consumer demand have very drasticimpacts upstream on supply. During times like these when demand continues to shift in ways that are difficult to anticipate,the bullwhip effect is more pronounced than ever, and, for many companies without established demand planning processes,it is wreaking havoc on our supply chains and our ability to meet consumer demand. At the core of this problem is ineffectivedemand forecasting, with many companies forecasting orders/shipments instead of the real demand signal. Here I detail 5practical responses that mitigate the causes of the bullwhip effect and will help us navigate the extreme uncertainty relatingto ...