Fluctuations intensity increases as Demand changes traverse across supply chain from customer to suppliers.

1. The Bull Whip Effect From DeveshDubey PGDIE 38 NITIE Mumbai

2. Doesn’t place order to manufacture Doesn’t buy Raw Material from Supplier Doesn’t place order to Wholesaler 6 Beer Bottles/Day Sufficient Stock at Retailer Factory reduces Production Quantity

3. Sufficient stock to meet normal Demand Finished Goods Stock Reduces Demand Increases to 40 Bottles/day Stock reduces Raw Material Stock vanishes

4. Places Huge Order to Supplier Places Huge Order to wholesaler Places Huge Order to Manufacturer 40 Bottles Order Stock Out Stock Out Stock Out Stock Out

5. Waiting for Replenishment Raw Material Supplied Production Starts NO STOCK

6. Demand returns to 6 Bottles/day Full Store Finished Goods Inventory piled up Replenishment occurs Replenishment occurs Full Warehouse

7. Material Flow Order = (+/-) 80% Change by Demand = (+/-) 40% Forecast = (+/-) 40% Order = (+/-) 20% Change by Demand = (+/-) 10% Forecast = (+/-) 10% HUGE Change in Raw Material Supply Demand Change by (+/-)10% PO PO Order = (+/-)40% Change by Demand = (+/-) 20% Forecast = (+/-) 20% RO Order Flow

8. Down Stream Order Amplification

9. Bullwhip Effect Impact

11. Reduce Delays along the Supply chain

12. Focus on point of Sale data

13. Reduce the purchase order size