The Forrester Effect: Theory, Consequences and Solutions to the Pharmaceutical industry

Abstract

The Supply Chain includes all the parties involved that are required in fulfilling a customer’s demand or requests, whether direct or indirect parties. The supply chain consists of the manufacturers, suppliers and transporters, warehouses, retailers and consumers themselves.The impact of BWE is to increase manufacturing cost, inventory cost, replenishment lead time, transportation cost, labour cost for shipping and receiving, cost for building surplus capacity and holding surplus inventories, and to decrease level of product availability and relationship across the supply chain. The objective of the study is to point out the major reasons of the Bullwhip effect in supply chain and propose solutions which would reduce the effect across the network. In the end the study concludes that learning the underlying causes and relations between the different levels in the supply chain is important to nullify the impact of the BWE on the supply chain.