Bullwhip Effect in a UAE Tissues Manufacturing Company

Subject: Company Information
Pages: 2
Words: 431
Reading time:
2 min

The topic of the bullwhip effect can be applied in the UAE context, especially in the Tissues Manufacturing Company. The organization may use the data presented in the study to analyze how it can increase demand variability in all parts of the supply chain. For instance, the company may use the experiences of its American colleagues to analyze whether its production can be characterized as smooth, which would mean that the variance of production does not exceed the variance of sales significantly.

The organization should also learn how to use the data about the total volatility all of its customers and single products provide with respect to capacity planning and labor. It is vital to mention that the bullwhip effect may not be applicable to the Tissues Manufacturing Company, as it may not be applicable to particular industries. In some cases, firms present such an effect, while industries do not; the opposite cases are also possible. The organization should pay attention to the correlation of production and demand across its systems and the causes of amplification evident from its practice.

It is possible to say that the company should not expect to notice the bullwhip effect, as it depends on various factors. First, the organization should pay attention to the seasonal factors, as there are times when demand may be increased naturally. Second, in many industries, production can be more volatile than sales. These facts suggest that the company should decide whether seasonal factors play a significant role in its performance and revenue. If seasonality is insignificant, the Tissues Manufacturing Company should ensure a high level of amplification.

In addition, it is highly crucial for the firm to pay attention to the circumstances in the economy of the UAE. Many studies of the bullwhip effect focus on American data, which may be inapplicable for the country, considering the fact that the available data had been gathered for several decades.

Finally, it is vital for the organization to note that the presence of the bullwhip effect depends on the specificity of the industry, which means that for some firms, it is unnecessary to mitigate it. The reason for it is that the existing data only cover a limited number of industries and types of manufacturers, and it may be unreasonable to compare the existing findings to the company’s circumstances. Thus, the bullwhip effect may be a significant threat for firms from both UAE and other countries, but each organization should pay attention to the specific factors it encounters to analyze the risks.