Bullwhip Effect, Efficiency and Effectiveness
1. Bullwhip Effect
●What is Bullwhip effect?
The bullwhip effect can be explained as an occurrence detected by the supply chain where orders sent to the manufacturer and supplier create larger variance then the sales to the end customer. These irregular orders in the lower part of the supply chain develop to be more distinct higher up in the supply chain. This variance can interrupt the smoothness of the supply chain process as each link in the supply chain will over or underestimate the product demand resulting in exaggerated fluctuations.
The bullwhip effect just like “Butterfly effect.” The manager should doing the environment scanning, noticed any tiny changes. To prevent the huge lost which is because the customer’s demand changes.
Figure1.1 Bullwhip effect
●Why the bullwhip effect will happen?
I think is because there are some problems between the manufacturer and customers. The retailer will base on the customer’s order to do the forecast. They thought that customer’s demand will increase every week, so they also will increases their order from wholesaler. The wholesaler also will do the same thing; increase their order to the producer.
But their information’s transfer is slower than the demand change. Each time they send the massage need take for a long time. Their lead time is too long that cause their problem.
2. Efficiency and Effectiveness
●What is efficiency and effectiveness?
Efficiency：Peter Drucker definition on efficiency is “Concerned with doing things right.” This point is focus on using the minimum resources to create the maximum outputs. It emphasis on the analysis of resource using. So it also can be explain like” Getting the most output from the least amount of inputs.”
Effectiveness：Peter Drucker definition on effectiveness is “doing the right things.” This perspective is to focus on the actual output exceeds expectations, it emphasis on the goal achievement.
●For the organization what are their meaning?
Both of which
●What is Bullwhip effect?
The bullwhip effect can be explained as an occurrence detected by the supply chain where orders sent to the manufacturer and supplier create larger variance then the sales to the end customer. These irregular orders in the lower part of the supply chain develop to be more distinct higher up in the supply chain. This variance can interrupt the smoothness of the supply chain process as each link in the supply chain will over or underestimate the product demand resulting in exaggerated fluctuations.
The bullwhip effect just like “Butterfly effect.” The manager should doing the environment scanning, noticed any tiny changes. To prevent the huge lost which is because the customer’s demand changes.
Figure1.1 Bullwhip effect
●Why the bullwhip effect will happen?
I think is because there are some problems between the manufacturer and customers. The retailer will base on the customer’s order to do the forecast. They thought that customer’s demand will increase every week, so they also will increases their order from wholesaler. The wholesaler also will do the same thing; increase their order to the producer.
But their information’s transfer is slower than the demand change. Each time they send the massage need take for a long time. Their lead time is too long that cause their problem.
2. Efficiency and Effectiveness
●What is efficiency and effectiveness?
Efficiency：Peter Drucker definition on efficiency is “Concerned with doing things right.” This point is focus on using the minimum resources to create the maximum outputs. It emphasis on the analysis of resource using. So it also can be explain like” Getting the most output from the least amount of inputs.”
Effectiveness：Peter Drucker definition on effectiveness is “doing the right things.” This perspective is to focus on the actual output exceeds expectations, it emphasis on the goal achievement.
●For the organization what are their meaning?
Both of which