Procter & Gamble （P&G） is a multinational consumer goods corporation that has extensively studied the bullwhip effect in its supply chain operations, including in the Indian market. The bullwhip effect refers to the phenomenon where small fluctuations in consumer demand cause increasingly larger fluctuations in demand up the supply chain, from retailers to distributors to manufacturers.
In India, P&G markets popular products like Ariel detergent, Pampers diapers, and Gillette razors. For these items, the bullwhip effect can manifest when local retailers overreact to slight changes in consumer purchasing patterns. For instance, if sales of Pampers diapers increase slightly in Mumbai stores, retailers might double their orders from distributors, who then triple their orders from P&G\“s manufacturing plants. This amplification occurs due to factors like order batching, demand forecasting inaccuracies, and price fluctuations.
P&G has implemented various strategies to mitigate the bullwhip effect in India, including sharing real-time sales data with partners, using electronic data interchange systems, and implementing vendor-managed inventory programs. These approaches help stabilize the supply chain for products like Vicks cold remedies and Oral-B toothbrushes, ensuring consistent availability across Indian markets from Delhi to Bangalore while reducing inventory costs and improving efficiency. |
