This paper is based on the study of a few selected distributors operating in two consumer electronics supply chains. The purpose of this study is to quantify the bullwhip effect generated by them and compare the two distribution systems. An attempt has also been made to examine the systems with reference to various causes of bullwhip effect.

A typical supply chain consists of suppliers, manufacturers, distributors, and retailers. Each of them contributes to the performance of the chain and satisfaction of its customers. Cooper and Ellram (1993) compare a supply chain with a well-balanced and well-practiced relay team. In such a team, the coordination between the two players who directly pass the baton is the strongest, but the entire team needs to make a coordinated effort to win the race. Similar is the position of the distributors in a supply chain as they provide a direct link between the chain and its customers. It is well established that the performance of the distributors significantly influences the profitability and level of service of a supply chain.

Forrester (1961) has characterized supply chains by fluctuation, amplification and lag in material flow, be it a raw material or a finished product. In a conventional supply chain, the most downstream player receives customers' demand in the best possible form. This distortion occurs primarily due to delay in communication and misinterpretation of the information at various stages. The policies of a company and its decisions based on this misinterpreted information further amplify the distortion in the information for the next company on the upstream side. The obvious result of this amplification, known as bullwhip effect, can be seen in the form of increasing variability towards the upstream in the orders placed vis-à-vis the orders received. The ultimate effect of such amplifications in the demand across the chain is the increased cost and reduced profitability.

Thus, the performance of a supply chain is affected by how good the distributors perform and how much they contribute to the amplification of demand across the supply chain. The present paper is based on the study of a few selected distributors dealing in consumer electronics and belonging to two different supply chains. The purpose of this research is to quantify and compare the bullwhip effect for the two distribution echelons. The paper also analyzes the two systems with reference to various causes of bullwhip effect.

Supply Chain Management Journal, Samsung Supply Chains, Distribution Echelons, Bullwhip Effect, Data Processing, Distribution Systems, Supply Chain Management Tools, Price Fluctuations, Monetary Constraints, Order Batching, Demand Signaling, Business Risks.