The Bullwhip effect can appear in every industry and in every supply chain.
A quick example will illustrate the rather simple idea. Unbeknownst to you, there has been a series of block parties in the neighborhoods surrounding your store.
A lean improvement initiative by a manufacturer might have cut internal cycle times by 50 to 90%.
Unfortunately, the same manufacturer could have also switched to suppliers in low cost regions, increasing the purchasing cycle time by 1,000%.
In recent years in the supply chain management theory there has been done a lot of research over the phenomenon called the Bullwhip effect In brief, this negative effect occurs when 'the demand order variabilities in the supply chain are amplified as they moved up the supply chain' (Lee et.
al, 1997a) and can lead to such big inefficiencies as lost revenues and poor customer service.