On the bullwhip avoidance phase: the synchronized supply chain

Abstract

The aim of this paper is to analyse the operational response of a Synchronised Supply Chain (SSC). To do so, first a new mathematical model of a SSC is presented. An exhaustive Latin Square design of experi- ments is adopted in order to perform a boundary variation analysis of the main three parameters of the periodic review smoothing (S,R) order-up-to policy: i.e., lead time, demand smoothing forecasting factor, and proportional controller of the replenishment rule. The model is then evaluated under a variety of performance measures based on internal process benefits and customer benefits. The main results of the analysis are: (I) SSC responds to violent changes in demand by resolving bullwhip effect and by creating stability in inventories under different parameter settings and (II) in a SSC, long production– distribution lead times could significantly affect customer service level. Both results have important consequences for the design and operation of supply chains.