Bullwhip Effect Study in Leaf Organic Supply Chain

Driven by the pain points of the organic food supply chain, which has been plagued by counterfeiting and difficulties in pursuing accountability, this paper investigates a secondary organic food supply chain consisting of suppliers and retailers and establishes two supply chain models under the traditional model and in the blockchain traceability context. In order to effectively solve the problem of unrealized Pareto improvement in organic food supply chain after applying blockchain, a new hybrid contract based on benefit‐sharing and cost‐sharing is designed to coordinate the supply chain and realize Pareto improvement, and this solution is gradually applied to organic food enterprises. Based on the fact that blockchain can improve trust in the supply chain and eliminate counterfeiting of organic food, the relationship between the rate of genuine products and market demand and the cost of blockchain is established, and then the analysis is developed using the Stackelberg game. We compare the traditional model with the model in the blockchain context and analyze the optimal profit of each supply chain entity, comparing the change in optimal profit before and after the blockchain implementation, and clarifying the cost threshold of the blockchain technology input application. We find that: (i) The adoption of blockchain can not only improve the authenticity of products and combat counterfeit and shoddy organic food, but at the same time, the improvement of organic level in the context of blockchain will also attract some consumers to buy organic food, which will increase the main body of the supply chain and the overall profit. (ii) Blockchain‐adopted supply chains are consistently more profitable for all parties and overall than traditional supply chains. The main contribution of this study is that in the organic food supply chain under the application of blockchain technology model, by introducing revenue‐sharing and cost‐sharing contracts, the profit between each member of the organic food supply chain is further improved than the traditional model, and also, all of them are optimized, which further improves the stability of the supply chain and brings the supply chain to a coordinated state. Finally, in this context, the obtained results show the effectiveness and realistic operational efficiency of the proposed approach for companies compared to traditional single revenue‐sharing covenants. A combination of revenue‐sharing and cost‐sharing covenants is the best approach to solve such problems. In conclusion, it should be noted that the analysis presented in this study will help decision makers choose the most appropriate option among the possible solutions according to their criteria. This proposed framework can also be extended in various cases where profits are out of balance in the organic food supply chain, such as safety and value gain.

Getting downstream firms in a supply chain to share private information about consumer demand with their suppliers is generally considered a prerequisite to dampening the bullwhip effect, that is, the amplification of demand shocks as they pass upstream in a supply chain. If downstream firms are reluctant to share their demand information, how can they best be incentivized to do so, and what does the optimal incentive scheme imply for the bullwhip effect and supply chain efficiency? We examine these questions by developing a supply chain model with asymmetric information, and show that the supplier should optimally follow a two-pronged strategy. One prong consists of the optimal incentive contract to induce information revelation. Information revelation requires a distortion in the downstream firm’s orders that makes them more responsive to demand shocks, which tends to strengthen the bullwhip effect. The other prong helps to reduce this distortion and dampen the bullwhip effect. It consists of getting the downstream firm to increase its initial order and stock up on inventory before it learns about demand. A larger initial order is sufficient to eliminate the bullwhip effect if demand shocks are not too persistent. Our results hold if the marginal production cost does not increase too quickly with output and the inventory holding cost is not too high.

The supply chain design plays a key role in product availability in normal operations. The process of availability of stock level in running a business is necessary to attract and retain customers. The components or the channel partners in supply chain are responsible for calculating forecasted demand for the products. The overestimation as well as underestimation of the forecasted demand by each channel partners in the supply chain may result in the phenomenon of bullwhip effect in the supply chain. Vegetable, fish, and meat supply chains, which are the highly perishable products of daily life use, are to some extent different from that of the non-perishable products’ supply chains. Thus, the channel partners involved in the supply chain of vegetable, fish, and meat also forecast the different stock levels of the respective categories. In some cases, there are excess or shortfall in the availability of such items. This study attempts to comprehend and emphasize the phenomenon of the bullwhip effect in the category of fish and vegetable supply chain. The study further assesses the underlying factors responsible for the bullwhip effect. The study concludes with major suggestions for eliminating such bullwhip effect.

For winning the competition, every entrepreneurs have to compete on supply chain. Tani Sejahtera Farm (TSF) is a distributor which cooperates with farmers in distributing organic rice in its supply chain. TSF had problems in coordinating product, financial, and information flows along its supply chain. This research aimed to analyze the condition of organic rice supply chain and its performance. The amount of samples were 14 samples which were all members of organic rice supply chain. FSCN (Food Supply Chain Networking) Framework was used for analyzing the condition of organic rice supply chain. Asset management efficiency approach was used for analyzing its performance. Organic rice supply chain had a network form. From the six elements, the condition of organic rice supply chain had not been good, especially in supply chain management, business processes and its overall performance. Supply chain management had not been implemented well in this supply chain. Its transaction system made TSF difficult to turn its capital back. From its business process, the financial and information flow had not been fluent. Its cash asset management performance had not been well also because it was too long for TSF in collecting its capital.

The competition in the twenty-first century is not the competition between enterprises, but the competition in the supply chain. “Bullwhip effect” is a common phenomenon in supply chain management. With the development of economy and the intensification of competition, the structure of supply chain is increasingly complex. Therefore, how to eliminate and effectively prevent the harm of “Bullwhip effect” has become a problem that people pay special attention to. The objective of this study is to provide a new way of using agility to prevent bullwhip effect. Through the combination and application of a variety of analytical methods, the key criteria of agility are ranked, so that enterprises can control these factors in priority, and formulate strategies in advance, so as to improve the agility of enterprises to prevent the negative impact brought by the bullwhip effect, and find the optimal solution to the “bullwhip effect.” Taking a Guangdong Yinglian Technology Company as an example, this study found that the best way to reduce the “bullwhip effect” of the supply chain is to improve customer satisfaction, and secondly to improve employees’ work capabilities.KeywordsAgilityBullwhip effectQFD

PurposeThis study aims to develop the alleviating bullwhip effects framework (ABEF) replenishment rules, and bullwhip, inventory fluctuations and customer service fulfilment rates were examined. In addition, automated smoothing and replenishment rules can alleviate supply chain bullwhip effects. This study aims to understand the current artificial intelligence (AI) implementation practice in alleviating bullwhip effects in supply chain management. This study aimed to develop a system for writing reviews using a systematic approach.Design/methodology/approachThe methodology for the present study consists of three parts: Part 1 deals with the systematic review process. In Part 2, the study applies social network analysis (SNA) to the fourth phase of the systematic review process. In Part 3, the author discusses developing research clusters to analyse the research state more granularly. Systematic literature reviews synthesize scientific evidence through repeatable, transparent and rigorous procedures. By using this approach, you can better interpret and understand the data. The author used two databases (EBSCO and World of Science) for unbiased analysis. In addition, systematic reviews follow preferred reporting items for systematic reviews and meta-analyses.FindingsThe study uses UCINET6 software to analyse the data. The study found that specific topics received high centrality (more attention) from scholars when it came to the study topic. Contrary to this, others experienced low centrality scores when using NETDRAW visualization graphs and dynamic capability clusters. Comprehensive analyses are used for the study’s comparison of clusters.Research limitations/implicationsThis study used a journal publication as the only source of information. Peer-reviewed journal papers were eliminated for their lack of rigorousness in evaluating the state of practice. This paper discusses the bullwhip effect of digital technology on supply chain management. Considering the increasing use of “AI” in their publications, other publications dealing with sensor integration could also have been excluded. To discuss the top five and bottom five topics, the author used magazines and tables.Practical implicationsThe study explores the practical implications of smoothing the bullwhip effect through AI systems, collaboration, leadership and digital skills. Artificial intelligence is rapidly becoming a preferred tool in the supply chain, so management must understand the opportunities and challenges associated with its implementation. Furthermore, managers should consider how AI can influence supply chain collaboration concerning trust and forecasting to smooth the bullwhip effect.Social implicationsDigital leadership and addressing the digital skills gap are also essential for the success of AI systems. According to the framework, it is necessary to balance AI performance and accountability. As a result of the framework and structured management approach, the author can examine the implications of AI along the supply chain.Originality/valueThe study uses a systematic literature review based on SNA to analyse how AI can alleviate the bullwhip effects of supply chain disruption and identify the focused and the most important AI topics related to the bullwhip phenomena. SNA uses qualitative and quantitative methodologies to identify research trends, strengths, gaps and future directions for research. Salient topics for reviewing papers were identified. Centrality metrics were used to analyse the contemporary topic’s importance, including degree, betweenness and eigenvector centrality. ABEF is presented in the study.

This paper is concerned with the comparison of a factory managed inventory (FMI) supply chain to a traditional forecast-based orders supply chain. The particular emphasis of this paper is the impact the FMI structures have on the ''Bullwhip Effect'' generated within the supply chain. We especially focused on the relationship between the sales site and the factory site, and the developed FMI supply chain that the factory manages each sales site's inventory level, the production site inventory level and actual customer demand as a unified integrated system. A comparison of the performance of the FMI system and conventional supply chain system of a global electronics parts company was investigated by present value (PV) analysis using the value of inventories as a variable. The results revealed that FMI greatly contributed to both reduction of the Bullwhip Effect and improvements of the cash flow PV Index.

PurposeThe operational aspects of supply chain, when handled correctly, results in diminishing the impact of the bullwhip effect. The purpose of this study is to analyze the impact of operational and financial variables on the bullwhip effect. Various operational factors that contribute to the bullwhip effect in a supply chain are identified and their impact on variability in production is measured at manufacturer’s end in the supply chain.Design/methodology/approachTen different sectors of the Indian economy are identified and analyzed on the basis of bullwhip effect. The ratio of change in production with respect to change in demand is taken as a metric to measure the bullwhip effect. Initially, the impact of identified variables on bullwhip effect is analyzed using the linear regression analysis and then to gain more insights, the threshold regression model is applied according to the change in bullwhip ratio.FindingsThe study identifies four threshold regions in which bullwhip ratio is changing its slope considerably. The operational and financial variables impacting bullwhip effect differently in these four regions provide useful insights about how the variables are impacting the bullwhip effect.Research limitations/implicationsPast 11 years of observations on identified operational and financial variables are studied for ten different sectors. The operational and financial variables are identified on basis of available literature but may not be exhaustive in nature.Practical implicationsThe present study implies that the emphasis must be given to the magnitude of the bullwhip ratio. Strategies must be adopted that result in mitigation of bullwhip effect. Such mitigation strategies must not only be restricted on the basis of type of product or sector, perhaps they must be on the basis of threshold region of bullwhip ratio.Originality/valueThe study suggests a novel approach to study the bullwhip effect in supply chain management using the application of threshold regression considering the bullwhip ratio as a threshold variable.

Commonly, an upstream member in a supply chain provides productions or resources for many downstream members. When the sum of retailers order quantities is beyond suppliers' inventories, suppliers might apply order allocation mechanism to solve the difficulty. The allocation mechanism is not considered in most of previous studies on the bullwhip effect. This paper develops the supply chain simulation software based browser/server technology, which can build tree-shape supply chain structure considering allocation mechanism. Two experiments are designed and implemented in order to isolate the effect of different order allocation mechanisms on bullwhip effect. The studies show that BWV differs from allocation mechanisms. For three types of supply chain members, the change tendencies of BWV with two allocation mechanism are similar. The paper also demonstrates that distributors have effect more obviously on bullwhip effect than other two roles with different allocation mechanism.

Reducing the bullwhip effect is of the main challenges in the field of supply chain management (SCM). One of the solutions is to implement SCM software for collaborating within every upstream and downstream supply chain members effectively. However, there is a lack of measurement models to show the relationship between changes of the bullwhip effect and the implementation of SCM software. Therefore, this study proposed an innovative model for measuring the bullwhip effect under the implementation of supply chain management software. Moreover, an empirical four-stage supply chain case in Taiwan is taken for numerical analysis. The results show that a higher implementation rate of supply chain management software in the supply chain, the more improvements of the bullwhip effect will make. Furthermore, it also found that under the same software implementation rate in better performed and worse performed supply chains, the worse one can make more notable improvements for the bullwhip effect.

This research aims to develop a simulation approach based on system dynamics modelling (SDM) and adaptive network based fuzzy inference system (ANFIS) for quantifying and reducing the bullwhip effect in a multi-product, multi-stage supply chain. The proposed model is comprised of three groups of variables influencing the bullwhip effect, namely the structure of a supply chain network, supply chain contributions (ordering process in regular situation or when a supplier has a promotion or shortage gaming) and supply chain performances (the number of defects and ordering lead time). As a result, a two layer simulation model is developed with three generic models. The flexibility of this proposed approach is its ability to model various types of ordering policies which are basic inventory policies, material requirement planning (MRP) system and just in time (JIT) approach. The supply chain of a beverage company was selected to validate and demonstrate the flexibility of the proposed model. The findings of the proposed simulation model are consistent with the results obtained from the case study. The error magnitude of the bullwhip effect level varied between 0 and 9% resulting in bullwhip effect reductions of up to 92%. Accordingly, the bullwhip effect levels are significantly decreased by using the proposed simulation model.

Superior supply chains are one of the best ways to compete in today's marketplaces.In Supply Chain Management, overall supply chain evaluation needs to include an important logistical effect known as the Bullwhip Effect.It shows how small changes at the demand end of a supply chain are progressively amplified up the supply chain.Production plans are based on demand forecasting and suppliers not only react on changed demand, they adapt the level of safety stock (variation of stocks and orders increases).In this paper two special situations in a four-stage supply chain are studied: i) stable demand with a single 5 % change in demand (with application of four different stock keeping policies), and ii) changing demand with alternating 5 % changes in demand (up and down, with another three stock keeping policies).The results of spreadsheet simulations are shown in tables and charts.Increasing variability of production orders and stock levels up the supply chain is evident.The Bullwhip Effect is measured by the standard deviation of orders.The comparison of the results shows that the Bullwhip Effect can be partially reduced by appropriate stock keeping policy.

This research aims to observe the impact of bullwhip effect on supply chain performance, the research is focused on how the bullwhip effect distorts the information sharing and to what extent that distortion effects the supply chain performance of a firm. This research also explains that the quality and quantity of information sharing deeply effects the supply chain performance. It tries to establish the fact that if the information is accurate and is shared timely, this can lead to increased performance, it also emphasizes on the importance of the supply chain integration and partner’s relationship in mitigating the bullwhip effect.
 This research study will serve as an important contribution to the filed of supply chain management, as such type of research has not been conducted earlier by keeping the Pakistani firms as the unit of analysis. The study reveals that through proper, timely and accurate exchange of information between an enterprise and its supplier the firm can lessen uncertainty, order fulfillment rate is improved, costs is reduced and can ultimately increase the performance.
 The study reveals that bullwhip effect strongly effects the information and its flow, but if the information is managed properly and its quality is increased then it results in strong partner relations which leads to supply chain integration. It has been found that the supply chain integration strongly effects the supply chain performance of a firm, better the supply chain integration the better would be the performance of the overall supply chain

Symbiotic Supply Chains – where the inputs of some members belonging to one supply chain are obtained using the waste generated by other companies in a different supply chain – represent a great opportunity for companies to move towards the Circular Economy paradigm. However, the dynamic behavior of Symbiotic Supply Chains (i.e., how detrimental time-varying phenomena of supply chains, such as the bullwhip effect, impact the performance) remains largely unknown. In this work we aim to contribute to this quite unexplored research field by analyzing the dynamics of two supply chains that implement, at the manufacturer level, a symbiotic exchange of waste. We derive closed analytical equations to estimate several indicators of the bullwhip effect under different information sharing scenarios and evaluate them for different coefficients of circularity (i.e. the average proportion of the output of one supply chain that is obtained using the waste of the other supply chain). Furthermore, we extend our analysis by carrying out a simulation study, when some underlying assumptions are removed, and a full-factorial Design of Experiments to emulate and explore the behavior of Symbiotic Supply Chains under further real-life scenarios. By doing so, we identify different properties of Symbiotic Supply Chains and provide some managerial implications. Among those, we observe how the bullwhip effect of one supply chain propagates to the other, which is also greatly influenced by the variability of the demand in both supply chains. Also, we note that high coefficient of circularity does not necessary improve the dynamic performance of Symbiotic Supply Chains. Results point out to the need to carefully design symbiotic exchange in supply chains to avoid undesirable effects that may hinder the advocated advantages of Circular Economy practices.

Nonlinear dynamical behaviours with chaotic phenomena are commonly observed in a typical logistics model and supply chain system. Bullwhip effect has been widely recognized as one of the main issues on affecting the supply chain management. In essence, this phenomenon will lead to unnecessary consumption and waste of natural and social resources by demand variability amplification as moving up in the supply chain networks. However, traditional modelling approaches may become complicated in dealing with uncertainty and chaotic behaviour that are prevalent in real supply chains. System dynamics theory has been employed as a potentially effective strategy to cope with chaotic supply chains which are unpredictable behaviours in time. Four-dimensional differential equations which exhibit chaotic behaviours are constructed to describe a multi-echelon supply chain with bullwhip effect. Furthermore, modern control theory is applied to deal with the multi-stage supply chain optimization problems against disruptions. Specifically, the novel fractional order adaptive sliding mode control (FO-ASMC) algorithm has been implemented for ensuring efficient supply chain management. In addition, the chaos synchronization scheme is implemented in an attempt to regulate the supply chain systems under the impact of extensive uncertainties caused by tumultuous real market. It is found that the chaos synchronization is effectively realised by new FO-ASMC theory to manage advanced supply chain networks. Finally, this advanced management optimization offers a new class of intelligent applications that connects demand to supply and planning to execution across the entire supply chains.