The internal bullwhip effect in car manufacturing

The paper describes variance amplification of orders in a car manufacturing context. Demand fluctuation in inter-company supply chains has been well described in literature over many years. The specific contribution of this paper is to examine the cyclical boom-and-bust behaviour, commonly known as the bullwhip effect, inside the plant boundaries of a single company with the help of system dynamics modelling. To gain insight into this phenomenon we will first perform an extensive literature review on the subject of factory relevant internal bullwhip. Based on these results we illustrate through a real-life car assembly operation the existence of internal bullwhip. Finally we conclude with a discussion of our results and future research opportunities.

[1]  Susmita Bandyopadhyay,et al.  A review of the causes of bullwhip effect in a supply chain , 2011 .

[2]  Peter McCullen,et al.  The Impact of Agile Manufacturing on Supply Chain Dynamics , 1999 .

[3]  D. Towill.  FORRIDGE - Principles of good practice in material flow , 1997 .

[4]  P. Wangphanich,et al.  Analysis of the bullwhip effect in multi-product, multi-stage supply chain systems–a simulation approach , 2010 .

[5]  Frank Y. Chen,et al.  Quantifying the Bullwhip Effect in a Simple Supply Chain: The Impact of Forecasting, Lead Times, and Information.: The Impact of Forecasting, Lead Times, and Information. , 2000 .

[6]  Denis Royston Towill,et al.  Engineering the Seamless Supply Chain , 2003 .

[7]  Hau L. Lee,et al.  Decentralized Multi-Echelon Supply Chains: Incentives and Information , 1999 .

[8]  Denis Royston Towill,et al.  Genetic algorithm optimisation of a class of inventory control systems , 2000 .

[9]  S. Disney,et al.  Reducing the bullwhip effect: Looking through the appropriate lens , 2007 .

[10]  Stephen Michael Disney,et al.  Dynamic simulation modelling for lean logistics , 1997 .

[11]  P. Prickett,et al.  The implementation of a cell-based manufacturing system , 1992 .

[12]  Samuel Eilon.  A new approach to production control , 1958 .

[13]  Tim Baines,et al.  An opportunity for system dynamics in manufacturing system modelling , 1999 .

[14]  Alan Harrison,et al.  An Investigation of the Impact of Schedule Stability on Supplier Responsiveness , 1996 .

[15]  J. Sterman.  The economic long wave: theory and evidence , 2011 .

[16]  Z. Drezner,et al.  Quantifying the Bullwhip E ect in a Simple Supply Chain : The Impact of Forecasting , Lead Times and Information , 2007 .

[17]  Stephen Michael Disney,et al.  Eliminating drift in inventory and order based production control systems , 2005 .

[18]  Mohamed Mohamed Naim,et al.  Smoothing Supply Chain Dynamics , 1991 .

[19]  M. Lambrecht,et al.  Transfer function analysis of forecasting induced bullwhip in supply chains , 2002 .

[20]  B. Williams,et al.  Operations management. , 2001, Optometry.

[21]  Denis Royston Towill,et al.  A methodology for benchmarking replenishment‐induced bullwhip , 2006 .

[22]  Nicoleta S. Tipi,et al.  Modelling the dynamics of supply chains , 2000, Int. J. Syst. Sci..

[23]  D. Towill.  Industrial dynamics modelling of supply chains , 1996 .

[24]  D. Lambert,et al.  SUPPLY CHAIN MANAGEMENT , 2003 .

[25]  Stephen Michael Disney,et al.  Order and inventory variance amplification: The equivalence of discrete and continuous time analyses , 2007 .

[26]  Rick L. Wilson,et al.  Planning for Continual Improvement in a Just‐in‐Time Environment , 1993 .

[27]  M. Naim,et al.  Supply chain dynamics , 1991 .

[28]  Giovanni Miragliotta,et al.  Layers and mechanisms: A new taxonomy for the Bullwhip Effect , 2006 .

[29]  Denis Royston Towill,et al.  A discrete transfer function model to determine the dynamic stability of a vendor managed inventory supply chain , 2002 .

[30]  Mohamed Mohamed Naim,et al.  ‘Bullwhip’ and ‘backlash’ in supply pipelines , 2009 .

[31]  John D. Sterman,et al.  System Dynamics: Systems Thinking and Modeling for a Complex World , 2002 .

[32]  Gerald Reiner,et al.  Customer-oriented improvement and evaluation of supply chain processes supported by simulation models , 2005 .

[33]  Young-Jun Son,et al.  Effect of information update frequency on the stability of production–inventory control systems , 2007 .

[34]  新郷 重夫,et al.  A revolution in manufacturing : the SMED system , 1985 .

[35]  R. Schonberger.  Japanese manufacturing techniques : nine hidden lessons simplicity , 1982 .

[36]  C. E. Riddalls,et al.  The optimal control of batched production and its effect on demand amplification , 2001 .

[37]  J. Sterman,et al.  Order Stability in Supply Chains: Coordination Risk and the Role of Coordination Stock , 2004 .

[38]  John L. Burbidge,et al.  Production flow analysis for planning group technology , 1991 .

[39]  Denis Royston Towill,et al.  System dynamics-background, methodology and applications.2. Applications , 1993 .

[40]  John L. Burbidge,et al.  The "new approach" to production , 1961 .

[41]  Octavio Carranza Torres,et al.  Cross-border logistics and sourcing : a methodology to analyze planning policies , 2006 .

[42]  Denis Royston Towill,et al.  UNCERTAINTY AND THE SEAMLESS SUPPLY CHAIN , 2002 .

[43]  John Blackstone,et al.  Theory of Constraints , 2010, Scholarpedia.

[44]  Denis Royston Towill,et al.  System dynamics- background, methodology and applications. 1. Background and methodology , 1993 .

[45]  Jeffrey K. Liker,et al.  The Toyota way : 14 management principles from the world's greatest manufacturer , 2004 .

[46]  J. Fransoo,et al.  Measuring the bullwhip effect in the supply chain , 2000 .

[47]  Barbara B. Flynn,et al.  Relationship Between JIT and TQM: Practices and Performance , 1995 .

[48]  David Dugdale.  The theory of constraints , 2012 .

[49]  David Helliwell Taylor,et al.  Demand amplification: has it got us beat? , 2000 .

[50]  Alan Harrison,et al.  Themes for facilitating material flow in manufacturing systems , 1995 .

[51]  Wallace J. Hopp,et al.  Factory physics : foundations of manufacturing management , 1996 .

[52]  John D. Sterman,et al.  Operational and behavioral causes of supply chain instability , 2006 .

[53]  Denis Towill,et al.  The influence of multi-product production strategy on factory induced bullwhip , 2009 .

[54]  Paul Forrester,et al.  Product variety and just-in-time conflict and challenge , 1994 .

[55]  Jan Riezebos,et al.  Period batch control: Classic, not outdated , 2002 .

[56]  Elena Ciancimino,et al.  On the Bullwhip Avoidance Phase: supply chain collaboration and order smoothing , 2010 .

[57]  R. Wilding.  The supply chain complexity triangle: Uncertainty generation in the supply chain , 1998 .

[58]  Hau L. Lee,et al.  The bullwhip effect in supply chains , 2015, IEEE Engineering Management Review.

[59]  Qinyun Li,et al.  Supply chain dynamics , 2015, 2015 International Conference on Industrial Engineering and Systems Management (IESM).

[60]  J. Forrester.  Industrial Dynamics: A Major Breakthrough for Decision Makers , 2012 .

[61]  D. P. Deziel,et al.  A linear production-inventory control rule , 1967 .

[62]  Andrew Thomas Potter,et al.  Bullwhip and batching: An exploration , 2006 .

[63]  Heinz Häfner.  Lot sizing and throughput times in a job shop , 1991 .

[64]  Jac Christis,et al.  Quick response manufacturing , 2015 .

[65]  D. Sterman,et al.  Misperceptions of Feedback in a Dynamic Decision Making Experiment , 1989 .

[66]  Richard Schonberger,et al.  World class manufacturing : the lessons of simplicity applied , 1986 .

[67]  William L. Berry,et al.  Manufacturing Planning and Control Systems , 1984 .

[68]  Javier Pereira,et al.  Flexibility dimensions to control the bullwhip effect in a supply chain , 2009 .

[69]  Matthias Holweg,et al.  The three-day car challenge: Investigating the inhibitors of responsive order fulfilment in new vehicle supply systems1 , 2003 .

[70]  J. Forrester.  Industrial Dynamics , 1997 .

[71]  S. Disney,et al.  On the bullwhip and inventory variance produced by an ordering policy , 2003 .

[72]  O. C. Torres,et al.  The Bullwhip Effect in supply chains : a review of methods, components, and cases , 2006 .

[73]  R. Yin,et al.  Case Study Research: Design and Methods (4th ed. , 2009 .

[74]  Colin New,et al.  Process variability and its effect on plant performance , 2000 .

[75]  Stephen M. Disney,et al.  Taming the bullwhip effect whilst watching customer service in a single supply chain echelon , 2006, Eur. J. Oper. Res..

[76]  John E. Glass,et al.  Review: David Coghlan & Teresa Brannick (2001). Doing Action Research in Your Own Organization , 2002 .

[77]  D. De La Fuente,et al.  Application of distributed intelligence to reduce the bullwhip effect , 2007 .

[78]  Vineet Padmanabhan,et al.  Comments on "Information Distortion in a Supply Chain: The Bullwhip Effect" , 1997, Manag. Sci..

[79]  G Frizelle,et al.  Measuring complexity as an aid to developing operational strategy , 1995 .

[80]  David Taylor.  Measurement and Analysis of Demand Amplification Across the Supply Chain , 1999 .

[81]  Alan Harrison,et al.  Investigating the Sources and Causes of Schedule Instability , 1997 .

[82]  新郷 重夫,et al.  A study of the Toyota production system from an industrial engineering viewpoint , 1989 .

[83]  Hau L. Lee,et al.  Information distortion in a supply chain: the bullwhip effect , 1997 .

[84]  Osamu Kimura,et al.  Desiǵn and analysis of Pull System, a method of multi-staǵe production control , 1981 .

[85]  M. Naim,et al.  Industrial Dynamics Simulation Models in the Design of Supply Chains , 1992 .

[86]  Paul Prickett,et al.  Cell‐based Manufacturing Systems: Design and Implementation , 1994 .

[87]  R. Schmenner,et al.  On theory in operations management , 1998 .

[88]  Mary Jo Maffei,et al.  Dealing with the Uncertainties of Manufacturing: Flexibility, Buffers and Integration , 1993 .

[89]  K.H.W. Seah,et al.  JIT and the Effects of Varying Process and Set‐Up Times , 1988 .

[90]  S. Chopra,et al.  Supply Chain Management: Strategy, Planning & Operation , 2007 .

[91]  Robert A. Novack,et al.  Rethinking Integrated Concept Foundations: A Just‐in‐Time Argument for Linking Production/Operations and Logistics Management , 1993 .

[92]  D. Towill,et al.  Enabling seamless market-orientated supply chains , 2006 .

[93]  Göran Svensson,et al.  The bullwhip effect in intra‐organisational echelons , 2003 .

[94]  D. Coghlan,et al.  Doing Action Research in Your Own Organization , 2000 .