Bullwhip Effect and its Transformation in Supply Chain: A Case Study of Procter & Gamble

Running head: OPERATIONS MANAGEMENT
Operations Management
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OPERATIONS MANAGEMENT
Table of Contents
Introduction......................................................................................................................................2
Bullwhip effect................................................................................................................................2
Implementation of bullwhip effect by P&G....................................................................................3
Transformation of supply chain by identification of bullwhip effect at P&G.................................4
Discrepancies with theoretical concepts..........................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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OPERATIONS MANAGEMENT
Introduction
Procter & Gamble Co. (P&G) headquartered in Cincinnati, Ohio is recognized as a
pioneer in American multinational consumer goods Corporation established by William Procter
and James Gamble in 1837. In 1858, the company achieved sales of more than $ 1 million with
only 80 employees. The international expansion of the company started as it moved into other
countries in terms of both product sales and manufacturing. It was recognized as an international
corporation in 1930 followed by the acquisition of Thomas Hedley Co. At present, some of the
most popular product line of the company can be depicted with hygienics products, cleaning
agents and personal care products. Prior to the buyout of Pringles by Kellogg Company the
portfolio of the company also included various types of beverages, food and snacks (Us.pg.com,
2018).
The important excerpts of the report have assessed the Bullwhip effect at Procter &
Gamble and how its implementation has transformed the supply chain of the company. The study
has also examined the in-depth concepts of how the company has achieved this transformation
process along with discrepancies which it may have to deal in practice.
Bullwhip effect
In general, fluctuations in demand can significantly vary among industries. For instance,
in apparel industry the demand is driven by seasonality and business cycles whereas on the other
hand, diaper market will enjoy a consistent demand. Therefore, one may expect several players
in the retail supply chain to frequently misjudge the demand thereby leading to shortages or
surpluses in the inventory at different stages. As discussed by Dai and Peng (2017), bullwhip
effect denotes to distortion in the procedure of conveying order information in the upstream