ResearchGleaned InsightsSurveys focus groups and interviews can identify the sources of costly variations in demand signals up and down the supply chainExecutive Summary ID: 95950
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Reducing the Bullwhip Effect via Market Research-Gleaned InsightsSurveys, focus groups and interviews can identify the sources of costly variations in demand signals up and down the supply chain.Executive Summary \r \f\r\n\t \b \r \n \n \r \n \r \n \n \n\t \r Cognizant 20-20 Insights ˆ † ˆ‰ ˆ‰ How the Bullwhip Effect Distorts the Supply Chain Retaile 15 units Wholesaler 30 units Manufacture 50 unit 70 units Raw material supplier Œ Market Research at Work \n \r \r \r \n \t ‡ \n \t \r \n \n \r \t \n \n \f € ‚ \n \n \n \r \t \r \n \n \n \t \n \n \n \n \n \r \n € ‚ \n \n \r \n \t „ \n\n \r \r \n \n \n † \r \r \n\t Bullwhip Scenario #1: Individual fears trump organizational ef ciency ‘ † \r \r \n \n € ‚ \t \n \n \n € \r ‚\t � ’\n † \r \r \r \r \t \t “ \n \r \n \n \t � \r\f\r \f \n ‡ \n \r \n\r \n \n \n \n \r \r \n\t \n \n \n € ‚ \n \n \n \r \t ” † ˆ‰ ˆ‰ \n † \t ‹ \n \n\r \n \n \n \r \t Bullwhip Scenario #2: Lack of adequate and timely information about demand trends ‘ \n \n \n \r \n \n \n • \t \n \r \t � – \r \n \n \n \t \n\n “—ƒ \n \n \n ‹ \n \n \t � \r\f\r \f \n ƒ\n € \n ‚ \r \n \n \n \r\n\t – \n \n \n \r \t – \n \f \r † \n \n \f \n Quick Take \b \n † \r \t \b\n \f \r \f ˜ \t \b\f \f \r €\t\t \n \n \t‚ \n ™ \n \n ™ \n \n \n \n ™ \t \f \f\r \n \r\r ™ \n \n \n \n \n \n \f ™ \n \n \n \n \f š \t\t \n \n \n \n ™ \t \r\r\r \f\f\r \r \r ™ ’ \n \f ™ † \n ™ \t \n\f \n\n \r\f \n \n \n ™ \n \n ™ \t \f\r \r €\n \n \f‚ \f ™ \t \b\f \f \n ™ \b \n † \n \n ™ ™ \t \r \f\r \r \r\f \n \n ™ \r \n \n ™ \t \b\f \f \r €\t\t \t‚ \n \n › œ \n ž™ \t \b\f \r € \n ‹\r \f ‚ \n \n \n \r › € \r \t‚™ Queries that Counter the Bullwhip Effect Ž \t \n \n \t Bullwhip Scenario #3: Free return policies allow customers to “game” the system ‘ \n \r\n \f \t \n \r \r \n \r \n \r\t � \b‹ \n \t � \r\f\r \f \n – \n \n \t \n \n \r \r \t Bullwhip Scenario #4: Order batching to cut processing and shipping costs ‘ \n \n \n \r \n \n† \n \t \r \n \n \n \t � \n\n “’ “—ƒ• \r \n \t † \r \n \t • \r \r \t � \r\f\r \f \n \n € ‚ \n \n \n\t Ÿ \n \r † \n \n \n\t Bullwhip Scenario #5: Price uctuations ‘ – \r \r \t ‡ \n \n € \r ‚\t � \n \n\n \r \n \r \n \t ¡\r \r \n \r \n \t � \r\f\r \f \n ƒ\n \n Quick Take ¢ † \t \r \t ƒ \n \n \n \t \n ‹ \n \t Œ – \n \n \r\n˜ £ˆ\tˆ \n \r \t \f ¡ … † \r \t ƒ\n Œ‰‰ \r Œ‰‰ ¤‰\t – Œˆ‰ Œ‰‰ \t ƒ \t ˆ \f\n\r Oversupply Resulting from Lack of Internal Communication \f\n\r Excess Inventory Resulting from Expected Shortages ¥ \n \n \r\n\t \r \n \n \t \n \r \r \r \t \n\n \n \r \t Looking Ahead: Next Steps \r \n \n \r \t ¦ \n \n \n \n \t \n \r \t \n \f \r \n \n \r \n\t Footnotes Œ ‡ ‡˜ – … \n – ’ … Œ‰ ˆ‰‰§ ˜••\t\n•\r•\r \r• \t ˆ – ‡ ˆ‰‰Œ ¡ … † \b\t Œ ˆ‰‰Œ ˜••\t\t\n• •”‰ŽŒ”• ¨ ¨ ¨ ¨¨ ¨ˆ‰‰Œ \t References ‘ “ –\n © „ – \b ¡ƒ– ª Œˆ ˆ‰Œ” ˜••\t\t\n• \n† \r•\r•ˆ«¬¬”‰• „ – \b \t ‘ ® ’ … ’ ˜••\t \t\n•\n• \t\n \t ‘ ’ \b \n ƒ ¯ “ ‡ ª Œ ˆ‰Œ” ˜•• \t\r\t •ˆ‰Œ”•‰¬• \n ¨Œ\t\n°±•ˆ‰Œ”•‰¬• \n ¨Œ\t\n \t About Cognizant † €¦\b–’\bŸ˜ –„‚ \n \r \n \r \r \t „ \f ¦ ª €®\t–\t‚ † \n\r \r \r \r \n\r \t ¬¥ \n \n Œ¬¤§‰‰ \n … ”Œ ˆ‰ŒŽ † \n\n\r ¦\b–’\bŸ Œ‰‰ –²ƒ ¥‰‰ \r ¯\r ˆ‰‰‰ ¥‰‰ \n \n \n \t ¢ \t † \t\n ˜ † \t World Headquarters ¥‰‰ \t ‡ ‡\t ¦ª ‰¬§§§ ®–\b ƒ ˜ ³Œ ˆ‰Œ ¤‰Œ ‰ˆ”” ˜ ³Œ ˆ‰Œ ¤‰Œ ‰ˆŽ” ˜ ³Œ ¤¤¤ «”¬ ”ˆ¬¬ “\n ˜ \f´ † \t\n European Headquarters Œ µ \n – ƒ © ˆ §‡’ ƒ ˜ ³ŽŽ €‰‚ ˆ‰ ¬ˆ«¬ ¬§‰‰ ˜ ³ŽŽ €‰‚ ˆ‰ ¬ŒˆŒ ‰Œ‰ˆ “\n ˜ ´ † \t\n India Operations Headquarters °¥•¥”¥ ¡ … \r \n — ¡ \n ƒ \n §‰‰ ‰«§ ƒ ˜ ³«Œ €‰‚ ŽŽ Žˆ‰« §‰‰‰ ˜ ³«Œ €‰‚ ŽŽ Žˆ‰« §‰§‰ “\n ˜ \f ´ † \t\n © Copyright 2014, Cognizant. \b \t ¦ \n \n \r \n \n \n \r \n \n \n \n † \t \n \r‹ \t \b \n \n \t About the Authors ¦ ¯ – … † \b \t „ \n Œ” \n \n \n \n \n \t „ \r \n \r \n\n \n \n \n† š \r \n \n š \n \r š \t ¦ …\t‡\t\b\t \n \n \n ƒ … \n ¦ ’ \r \n \n – ® …\t „ \r ¦ \t¯ ´ † \t\n \t – \r \b – \b † \b \n † \f \r \r\n\t – \r ‹ \n \n \n \n \n \n \n ®\t–\t “\t „ …\t‡\t\b\t \n ¦ ’ \r \n ’ ® \t – \r \r – \r\t\b ˆ´ † \t\n \t „\n … – \b † \b \n \n \t „ \r\n \n \n \r \n \r \n \n \n † \n \r \t „\n …\t‡\t\b\t \n \n ¦ … ‹ … \n – …\n\r \n “ ¯ … \n ®\tƒ\t ® © \t „\n \r „\n \t… ´ † \t\n \t