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From Disruption to Resilience: a Story of How We Mitigated the Bullwhip Effect


Check out the first part of this series here!


In today’s fast-paced business landscape, procurement and supply chain managers constantly juggle competing demands. Customers expect faster, more reliable deliveries, while rising costs force businesses to reduce inventory levels. A chemical manufacturing company was facing precisely this dilemma. While prioritizing customer satisfaction, their inventory management was spiralling out of control, leading to disruptions across the entire supply chain. Our consultant helped them turn things around by engaging people, installing adapted processes, and addressing variability and risks upfront.


Seeing the bigger picture

Before diving into procurement and inventory improvements, we recognized the need to look beyond isolated issues. We took a holistic approach, engaging not just procurement but multiple departments across the company. We also engaged upstream suppliers and downstream partners in the supply chain. This cross-functional engagement revealed that our client was suffering from the classic bullwhip effect — where misaligned communication and disconnected processes created chaos far beyond their warehouses.


Breaking silos through stakeholder engagement


Our first priority was to break down silos by fostering open communication between key stakeholders. By gaining insights from everyone involved — from sales teams and production managers to suppliers — we uncovered two critical issues:


  • Upstream issues: there was minimal transparency in sharing sales forecasts and inventory levels with suppliers. This lack of communication caused suppliers to struggle in meeting unexpected demand shifts.

  • Downstream issues: suppliers weren’t informing the client about their capacity constraints, leading to unexpected delays and increasing the pressure to order more inventory reactively.


Uncovering the root causes through quantitative analysis and process alignment


In parallel with stakeholder discussions, we conducted a thorough quantitative analysis to uncover deeper issues:


  • Variability and minimum order quantities: highly variable lead times and large minimum order quantities led to erratic order volumes, disrupting the entire supply chain. These factors triggered stockouts, followed by panic buying, causing further instability.

  • Sales and procurement misalignment: sales teams consistently overestimated or underestimated demand based on individual targets or by being unaware of safety stocks held. This disconnect highlighted the need for more robust processes and cross-team communication.


To visualize these communication gaps, we mapped the entire procurement-production-sales process, clearly identifying where information silos existed and where more structured communication was needed.



Communication flows to mitigate Bullwhip effect


Crafting a roadmap for integrated, collaborative solutions


Recognizing that people engagement and robust processes are key to sustainable improvement, we worked closely with our client to design a comprehensive roadmap. Our focus was not just on implementing technical fixes but also on fostering collaboration and aligning processes across the supply chain:


  • Enhancing sales forecasting: by integrating time series analysis and better collaboration between sales and procurement, we improved the accuracy of forecasts, even in cases with limited historical data.

  • Optimizing safety stock levels: using data-driven insights on lead time variability, we implemented a tailored, three-zone inventory system instead of the traditional two-zone approach.

  • Improving supplier transparency: regular communication channels were established to ensure that production capacity, lead times, and sales expectations were clearly shared, preventing last-minute surprises and panic-driven orders.


From planning to execution: turning strategy into action


Identifying problems and creating a roadmap are only the first steps. The real transformation happens during implementation. We acted as project managers, coordinating across departments and with suppliers to ensure every stakeholder was aligned and committed. By emphasizing shared goals, breaking silos, and applying our proven 5-factor approach, we reduced inventory levels while building a more resilient and responsive supply chain.


A future-ready supply chain starts here


This case study shows how overcoming supply chain challenges requires more than just technical fixes — it’s about engaging people, aligning processes, breaking down silos, and addressing variability risks upfront. If your organization is ready to transform disruption into resilience, reach out to learn how our holistic approach can drive your success.


Do you want to know more or share your thoughts? Don't hesitate to reach out to Victor Chartier or Jules De Weerdt! 


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