The Bullwhip Effect: What, Why And How? [TOP]

Instead of seeing what the customer actually bought, a manufacturer sees a highly exaggerated order from a distributor trying to "play it safe." This leads to a cycle of massive overstocking followed by extreme product shortages. Why does it happen?

Companies often wait to place large orders to save on shipping or administrative costs. This creates "lumpy" demand—periods of zero activity followed by a sudden, massive spike. The bullwhip effect: What, why and how?

Implementing Point-of-Sale (POS) data sharing allows every member of the supply chain to see actual consumer demand in real-time. Instead of seeing what the customer actually bought,