If you own a business, then you might be aware of the bullwhip effect, which is an important supply chain phenomenon first noted by mit systems scientist jay forrester even if you have never. Pdf | the indian fmcg sector is a low-margin business where volume holds the key to success with domestic consumption close to usd 17 billion, the fmcg sector today is one of the largest in the country and accounts for about 145 per cent of the gdp.
Production of low-quality counterfeit goods has the potential to significantly undermine the 'make in india' programme that seeks to establish the country as a global manufacturing hub, a report has said. The bullwhip effect at procter & gamble need to provide information on consumer demand and demand forecasts to all channel members disadvantage of the old supply chain model at p&g obstacles faced by p&g in its supply chain coordination. Bullwhip effect, also known as whiplash or whipsaw effect, is the effect of amplification of the demand order variabilities found in the upstream supply chain the demand variabilities swell as they move up in the supply chain, from the customer to the manufacturer or supplier.
The bullwhip effect is a very eminent concept in operations management, which first materialized in the year 1961 in 'industrial dynamics' by jay forrester to comprehend the bullwhip effect in supply chain, let us, in a nutshell, see what a supply chain is. Moving consumer goods (fmcg) sector of india retail sector has been growing very fast and some of the observations of the experts may not be that much mature this may be applied globally with little modifications as indian retailers are also growing same way as their global counter part in fmcg sector the result obtained cannot be generalized for the sector like infrastructure etc. Bullwhip effect uploaded by rahul pf-dowry system in india and is seen mostly in the fmcg / retail/ service sector the reason that these industry domains. This effect is called the bullwhip effect / whiplash effect / whipsaw effect as per wiki, the bullwhip effect is because customer demand is rarely perfectly stable, businesses must forecast demand in order to properly position inventory and other resources.
The bullwhip effect (also known as demand amplification, whip-saw, whiplash effect, or forrester effect) refers to the phenomenon of demand variability amplification as moving up in the supply chain: from the point of actual (final) demand to the point of origin. Although the bullwhip effect is a common problem for supply chain management understanding the causes of the bullwhip effect can help managers find strategies to alleviate the effect hopefully this blog post has given you a simple understanding of the term. Potentials to reduce the bullwhip effect in the fmcg supply chain as a matter of fact, results show a considerable decrease in demand standard deviation in all scenarios examined. Implementation of vmi in fmcg sector of pakistan is a major challenge for the fmcg companies and the retailers both maintaining of high quality error-free service in the dynamic and uncertain environment of pakistan with lack of ict infrastructure (information and communication technology) is a huge pressure. Supply chain performance attributes for the fast moving consumer goods industry in turn, agile and rapid responsiveness, as highlighted by fisher, obermeyer, hammond and raman (1994), are the key differentiators of the fmcg industry.
Biscuit industry in india in the organized sector produces around 60% of the total production, the balance 40% being contributed by the unorganized bakeries in the non-food segment itc follows the same model, just that the production centres for the same are: kolkata, bangalore, haridwar and nainital. The quantitative assessment of the impact of rfid technology and the epc network on the bullwhip effect is grounded on a representative italian fmcg supply chain a scheme of the supply chain investigated is provided in fig 1. The results obtained may help the practitioners in improving the competitiveness of the supply chains operating in india by reducing the bullwhip effect effectively. Bullwhip effect (bwe), which refers to the phenomenon wherein the variance in demand orders increases as one moves up the supply chain (sc), has been a source of concern for most of the sc managers as it has serious implications in the sc.
Purpose: thepurpose ofthis paperistopresent two examples based onreallifeexperiences where the bullwhip effect (bwe) in supply chain is considerably reduced both examples relate to the consumer durables industry in india.
The term fmcg (fast moving consumer goods), although popular and frequently used does not have a standard definition and is generally used in india to refer to products of everyday use conceptually, however, the term refers to relatively fast moving items that are used directly by the consumer. Minimization of bullwhip effect in fmcg supply chain september 2015 - january 2016 contextualized the causes for bullwhip effect with respect to fmcg industry and articulated some very practical and relevant methods which can be easily implemented to minimize the bullwhip effect in fmcg sector. The result show that rfid application can dramatically improve the efficiency of fmcg supply chain, and real-time visibility of supply chain can markedly reduce the bullwhip effect, and substantially affecting the economical profitability of the whole fmcg supply chain.