The internal bullwhip effect in car manufacturing

Abstract

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.

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