Understanding your supply chain: dynamic value stream mapping for business improvement

Abstract

The Bullwhip effect is a well-studied phenomenon in SCM. However, despite the large amount of work in the field, mainly simulation based, the number of empirical studies exploring the causes of bullwhip behaviour and their impact is limited. Our paper presents a study of a dairy manufacturer with a distinctive set of characteristics: short shelf life, weekly heartbeat-shaped demand, a multi-product wheel with limited production capacity, short lead-time requirements. By using dynamic Value Stream Mapping, we demonstrated the extent to which poor SC dynamic behaviour can create and amplify the bullwhip effect. We then explore the causes of this behaviour and identify opportunities for improvement. Introduction The Bullwhip effect is recognised as a typical phenomenon in the field of operations and SCM. It occurs when production order variance amplifies with increases in demand variance (Lee et al., 1997). The problems associated with the Bullwhip effect can be economically and operationally costly, because they lead to excessive stock holding, order backlogs, late deliveries, under/over resource utilization. Theoretically, bullwhip reflects the existence of various inefficiencies in operations and SC processes, as well as Muda (waste), Mura (overburden), Muri (unevenness), which are the three key lean concepts established by Ohno (1998). To date, the number of primary empirical studies that provide evidence on how bullwhip reveals within certain SC settings and how it can be mitigated against through optimal SC behaviour, decisions and strategies is very limited. This is a gap that our study aims to fill.

Publication
25th International EurOMA Conference, Budapest, Hungary, 24th-26th June
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