According to the European Journal of Operational Research, the term ‘bullwhip effect’ was first coined by Procter & Gamble (P&G) in the 1990s in reference to the order variance amplification phenomenon observed between P&G and its suppliers.”
A small shift in customer demand essentially cracks the whip, and the further a supplier is from the demand, the more significant the impact, which inevitably leads to increasing swings in inventory for suppliers.
This question of demand management led me to wonder if any bullwhip manufacturer or supplier ever ran into a situation that caused them to experience the bullwhip effect in their own supply chains. How ironic would that be? Sadly, I could not find any documented or reported instances of such an occurrence.
The closest I came was some information about how in 1981 after Raiders of the Lost Ark premiered, there was a sudden spike of interest in bullwhips, an increase in their usage by stage performers and a rebirth for the sport of whip cracking, which is a mixture of targeting and finesse. Many Indiana Jones wannabees emerged, due to the popularity of the film.
Canadian-born David Morgan supplied eight whips for the first Indiana Jones movie, and his business grew from there, with his products also appearing in The Mask of Zorro and Batman Returns. However, the upturn in interest from the movies in the bullwhip did not bring about any undue stress on the industry supply chains. The waitlist grew, but the supply chain did not experience any bullwhip effect.
The bullwhip effect and demand forecasting
Despite Indy’s best efforts, the bullwhip was a passing fancy. And when it comes to your supply chain, the last thing you want is a bullwhip effect, as it’s an indication of a disorganized, siloed supply chain, and one that would highly benefit from proper, disciplined demand planning. As I was researching bullwhips and supply chains, I came across some interesting facts and history. I thought you might enjoy these non-supply chain related bullwhip trivia:
- The bullwhip was introduced to the United States by Spanish vaqueros, the original cowboys, and was expressly designed for driving cattle.
- Cowboys would crack the whip to keep a bull distracted while they rounded up the cattle, allowing the bulls to join the rest of the herd without resistance.
- The Guinness World Record for the longest whip cracked is 100.47 m (329 ft 7.5 in) by Nathan Griggs of Australia. That’s about the same length as an American football field!
- And, the Guinness World Record for the loudest whip crack is 148.7 dBA by American Adam Winrich. For comparison:
- A commercial jet at takeoff comes in at 140 dBA
- A shotgun blast at 162 dBA.
- Anything over 140 dBA is considered to exceed the pain threshold for a human ear.
- The tip of a bullwhip moves at 343 m/sec, which is faster than the speed of sound, making the crack a mini sonic boom.
- Bullwhips are constructed from 100% vegetable tanned latigo steer hide, leather, red hide, nylon, or kangaroo hide leather.
- Fabrication can take anywhere from eight to 30 hours, depending upon the chosen material.
- American bullwhips are mainly used for cattle, while Australian bullwhips are used by performers.
Have you ever encountered the bullwhip effect in your supply chain? If so, how did you remedy it? What are your thoughts on proper demand forecasting and planning? Let me know in the comments.