Join Steven Brown for an in-depth discussion in this video Explaining the bullwhip effect, part of Logistics Foundations.
- "Insufficient facts always invite danger."…This is a quote from Leonard Nimoy,…speaking as the character, Mr. Spock in "Star Trek".…And in the logistics world, nothing could be truer.…Let me give you a very simplified example.…Let's say you normally buy one case of soft drink per week.…Your purchases are very steady week in and week out,…one case per week.…You decide that you'll have a party next weekend,…so this week you buy five cases of the soft drink.…The grocery store sees this sudden spike in sales…and is immediately worried about running out of product,…so they place a rush order with the distributor…for more cases of soft drink.…
The distributor sees this rush order come in,…and also worried about running out of stock,…now increases its regular order with the soft drink company.…The soft drink company schedules overtime…as it rushes to meet this sudden surge in demand,…happy that more people want to buy their product.…If one distributor has increased orders, they reason,…more wholesalers will follow.…
These lessons will help you understand the importance of logistics and help your company prepare for efficient delivery, distribution, and inventory. Plus, get insights on the latest logistics trends.
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- Define order fulfillment.
- Describe the significance of logistics.
- Explain outbound and inbound logistics.
- Distinguish among transportation options.
- Explain the Bullwhip Effect.
- Identify types of obstacles to coordination.
- Manage customer requirements.
- Describe how to differentiate your company.