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How to manage the bullwhip effect in the supply chain: A case study on Chinese Haier Group
University of Gävle, Faculty of Engineering and Sustainable Development, Department of Industrial Development, IT and Land Management.
University of Gävle, Faculty of Engineering and Sustainable Development, Department of Industrial Development, IT and Land Management.
2014 (English)Independent thesis Basic level (degree of Bachelor), 180 HE creditsStudent thesis
Abstract [en]

This thesis intended to increase the understanding of bullwhip effect in electrical appliance industry in the Chinese market. In the supply chain management, the bullwhip effect is a phenomenon can never be ignored. The bullwhip effect has being defined as information distortion when orders move form downstream enterprises to the supplier (Lee et al 1997b). The distortion information was amplified step by step, and finally propagates to the enterprise marketing, logistics, manufacture and other fields. The existence of the bullwhip effect weakens the ability to add value and competitiveness of the supply chain. Hence, enterprises must collaborate and jointly mitigate the bullwhip effect to reach groups coexist.

This work focus on the electrical appliance industry in China, and based on the successful experience of the case company, Haier Group, to formulate recommendations. Firstly, this research analysis the four causes of the bullwhip effect: demand forecast, price fluctuations, order quantity and short game (Lee et al 1997a). After analyze these causes, this study begins to identify the impacts which the bullwhip effect bring to the members of supply chains. The most obvious impacts can be defined as inaccurate forecasting, inadequate customer service and high inventory cost. Next, the paper evaluate the measures of Haier implement to dampen the bullwhip effect. Information sharing, the key point to solve the problem has been use in Haier. In addition to this, the Just in Time (JIT) strategy which include JIT purchase, JIT delivery and JIT distribution is another important measure for Haier to achieve the goal of mitigate the bullwhip effect.  Overall Every Control and Clear (OEC) management was created by Haier Group and aims to improve the supply chain management, is another countermeasure to deal with the bullwhip effect. Besides, the inventory management also have an important role in gaining the control of bullwhip effect.

In summary, the successful experience on dampening the bullwhip effect of Haier can shine a light for electrical appliance industry in China on solving the similar problem. Information sharing is always the key point to mitigate the bullwhip effect, and related instructions should build to remove the barriers of sharing information.

Place, publisher, year, edition, pages
2014. , 66 p.
Keyword [en]
Bullwhip effect, Supply chain, Haier Group
National Category
Engineering and Technology
URN: urn:nbn:se:hig:diva-16288OAI: diva2:694861
Available from: 2014-02-13 Created: 2014-02-07 Last updated: 2014-02-13Bibliographically approved

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