Layers and mechanisms: A new taxonomy for the Bullwhip Effect

The Bullwhip Effect has a long research history: from the pioneering works of the 1960s to the most recent studies, many authors have tried to figure out the causes of this phenomenon and to propose management levers able to cope with it. It is quite interesting to observe that, even if analysed through an analytic approach, and therefore in a very objective way, there are heterogeneous interpretations of the causes, and also conflicting conclusions about the benefits of the recommended management levers. The purpose of this paper is twofold. First, it aims at presenting an extensive literature review on the subject of the Bullwhip Effect, so as to consolidate present knowledge on the dynamics of a supply chain. Then, a new framework is presented to classify the causes of the Bullwhip Effect: this framework is innovative in that it introduces a twofold distinction between layers (physical, reconstructing and control levels) and mechanisms (determinants and triggers), whose interaction may lead to the Bullwhip Effect. Managers and researchers can benefit from this framework in order to classify, understand and explain the causes of this undesired behaviour, and to understand which interventions (on which mechanism and at which layer) could be more effective in reducing the variability amplification. (c) 2006 Elsevier B.V. All rights reserved.