Amplification in Service Supply Chains

Evidence on the impact of amplification, or bullwhip, effects on supply chain performance has primarily been derived from studies in manufacturing industries. This paper reports on a case study from the telecommunication industry, aiming to analyze relevant root causes and associated counter-measures of the amplification phenomenon in service supply chains. Case findings confirm the occurrence of upstream amplification of workload in the service supply chain, workload being a more appropriate measure for amplification effects in service supply chains than inventory levels. Not all of the root causes for amplification effects known from research in manufacturing environments were found to apply in this particular service context. Our telecom case study did highlight an additional root cause: interactions of high workloads and reduced process quality that start reinforcing each other in a vicious cycle once workloads pass a certain threshold. In this particular case, many of the known counter-measures to eliminate amplification did not apply given the nature of the service process or could only yield limited results. A potentially very powerful counter-measure is to implement quality improvements throughout the service chain. This quality dimension links our research to the literature on service management in general, where service quality is on top of the research agenda.