Relating the Four Material Flow

Bullwhip costs money, wastes resources, and loses customers. So drawing on a basis of analytical, simulation and experiential techniques, the authors’ present four material flow principles which can be recommended as strategies to reduce the bullwhip effect. A real-world case study from the precision mechanical engineering sector is employed to illustrate the effect of rapid response manufacturing and supply chain integration. Analyses of six years of Glosuch supply chain time-series data indicate amplification patterns damped by 36% plus a consequent 45% reduction in global inventory. The results serve to validate the four material flow principles of: selecting appropriate control systems, cycle time-compression, information transparency throughout the chain and echelon elimination wherever practicable. Interestingly, these results also suggest that manufacturing agility can improve the dynamic performance of the supply chain, mitigating variability-induced wastes including excess inventory and poor capacity utilisation. This creates a win-win scenario for both manufacturing and distribution facilities.