How Bullwhip Affected the Food and Beverage Industry During the Pandemic

Operations Management
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Operations Management
Effective management of the supply chain operations plays a significant role in ensuring sustainable growth and development of business organizations at both the local and international levels. Achieving the said outcome for business organizations across different sectors of the global economy demands the integration of reliable communication networks along the supply chain. Such networks provide an excellent platform for relaying information on the demand for products and services from the retail level to the supplier, allowing for the smooth flow of the daily operational activities along the supply chain. Any distortion to the information may adversely affect the supply chain, with all the stakeholders incurring losses and other damages to their operations. Misreading demand fluctuations at the retail level, for instance, may lead to amplified variations in demand on the higher levels of the supply chain. The wholesale, distributor, manufacturer, and supplier levels will record higher demand fluctuations due to the misinformation or the distorted demand information communicated up the chain. This phenomenon is referred to as the bullwhip effect and functions to disrupt the normal daily operations at all the levels of the supply chain. Its effects include poor customer service, missed production schedules, revenue loss, excessive investment in inventory across the chain, and poor transportation. The bullwhip effect was a common phenomenon for various industries during the advent of the Coronavirus pandemic and the subsequent period of implementing its control measures. The pandemic affected nearly every industry across the global economy through widespread uncertainties over the return to normalcy for all business aspects, including demand and supply of products. The food and beverage industry is one of the global economic sectors that underwent the bullwhip effect due to the pandemic. Provided herein is an evaluation of the bullwhip effect that affected the supply chain of the food and beverage industry worldwide during the pandemic.
The Coronavirus pandemic caused uncertainties in the food and beverage industry, leading to miscommunication along the supply chain due to sudden fluctuations in demand for consumer packaged goods. The exponential increase and decrease of demand for food and beverage products made retailers increase their orders from the wholesalers to meet the rising demand for the sam...