Impact of the Bullwhip Effect on Supplier Management: A Case Study of the Machine Tool Components Industry

Due to the impact of the pandemic in recent years, manufacturers have been severely out of stock, causing consumers to place excessive orders. When the pandemic slowed down, some of the original orders from manufacturers were abandoned, thus causing a bullwhip effect. When supply chain risk crises lead to changes in market uncertainty, the bullwhip effect will become more prominent. Business operations need to face unpredictable changes in sales forecasts and orders every day. This study uses qualitative research methods to explore the response strategies adopted by the machine tool parts industry when facing the bullwhip effect. In order to gain a deeper understanding of how related industries respond to rapidly changing consumer demands, this study conducted interviews with five senior operators. From the interviews, important information can be obtained about the impact of the introduction of information systems on inventory management and the impact on business operations and employees. It is hoped that through the interview results, more useful suggestions and help can be provided to the practical community to cope with the challenges brought by the bullwhip effect.