The Bullwhip Effect describes the exaggeration of demand at each level of the supply chain. There are several reasons that cause this exaggeration of demand but all center around uncertainty and lack of information.
Updates to forecasts, batching of orders, fluctuations of prices, and trying to “game” or “ration” quantities are all causes of the bullwhip effect. If there is a promotion at a deep discount the demand may be temporarily increased. This temporary increase is then exaggerated at each level of the supply chain to compensate for the lack of information or uncertainty in the demand. Each exaggeration is then exaggerated again at the next level leading to an erroneous demand profile for those suppliers at the beginning of the supply chain.
This issue can affect any supplier and manufacturer at any level in the supply chain. There are many tools manufacturers can use to mitigate risks caused by the bullwhip effect, but most importantly a manufacturer must be agile and able to react quickly to changes.
PlanetTogether is a tool that manufacturers can use to quickly adjust manufacturing schedules to compensate for changes in demand. PlanetTogether’s KPIs provide the data needed to make confident and effective decisions to minimize overtime costs while balancing on-time shipments to customers. PlanetTogether enables planners and schedulers to create multiple what-if scenarios to compare and evaluate the best schedule to balance metrics unique to your situation.[/vc_column_text]
Our team at Scheduling Solutions has the expertise and experience to provide you with the tools you need to be competitive, agile, and confident in making the right scheduling decisions. Contact us today to find out more about how PlanetTogether can help you.
Email: info@lsi-scheduling.com
About us: https://lsi-scheduling.com/About_Us.php