THE BULLWHIP EFFECT PHENOMENON IN AUTOMOTIVE SUPPLY CHAINS IN

Findings and Implications: The results indicate that automotive component manufacturers are dependent on demand-forecasting information from their customers. They experience long lead times, fluctuating orders, cancellation of orders, excess and slow moving inventory and a lack of integration with suppliers and customers. There are also signs of relationship problems and a possible silo mentality. The mentioned results indicate the presence of the bullwhip effect in South African automotive supply chains. Since the bullwhip effect can have a major impact on organisations’ costs, knowing where to invest effort and resources should be a high priority for supply chain managers. Value of the Research: Since the field of supply chain management is extremely dynamic, this article contributes to the body of knowledge and provides new insight into the bullwhip effect phenomenon. The results included in this article could assist parties in automotive supply chains to focus their attention on problems that might be within their control and if solved could lead to improved competitiveness. Furthermore, there is little empirical research on this topic in the South African automotive component industry. Conclusion: It is possible that the bullwhip effect is responsible for inefficiencies in automotive supply chains. Knowledge of the indicators of the bullwhip effect can enable supply chain managers to identify it at an early stage and thus be proactive in preventing its costly influence on the efficiency of the supply chain. The bullwhip effect can be experienced by any industry. This is possibly the case in the automotive component industry in South Africa.