The Bullwhip (Forrester) Effect: How Small and Periodic Fluctuations in Customer Demand Can Have a Drastic Impact on a Supply Chain.
There was a time, not too long ago, when Dell dominated the market for personal computers (PCs). It was a time that saw the company spawn a whole new industry of direct buying. Dell focused on a strategy that bypassed distribution channels by avoiding retailers and wholesalers altogether.
Just in Time (JIT) supply chains represent the ideal warehouse management approach, one that is best defined by low inventory levels, a low cost of financing, and most importantly, an adherence to a doctrine of only having what’s required to meet customer demand. However, does that mean that any company, regardless of its size, its industry, its market, its customers’ demand, and or its product offering, can run this type of supply chain? No, it doesn’t.