Inhibitory influence of supply chain digital transformation on bullwhip effect feedback difference

Abstract

Purpose

This paper breaks through the limitations of the research on bullwhip effect in the traditional supply chain, extends the research perspective to digital supply chain and discusses the weakening effect of digital supply chain on bullwhip effect by comparing the overall performance of the two.

Design/methodology/approach

This paper starts with the weakening mechanism of supply chain digitization on bullwhip effect, builds bullwhip effect models of traditional supply chain and digital supply chain, respectively, simulates the influence of supply chain digitization transformation on bullwhip effect by using Matlab software and analyzes the causes of bullwhip effect in supply chain led by T company and the digitization process.

Findings

Firstly, digitization can reduce bullwhip effect in multi-level supply chain by reducing information feedback deviation. Second, digital transformation is conducive to improving the overall performance of the supply chain. Third, government incentives can promote the digital transformation of supply chain and inhibit bullwhip effect.

Research limitations/implications

Although the study considers the heterogeneous subject -- the government's incentive effect on digital transformation and information sharing – it does not include the influence of the end node in the supply chain, that is the consumer. In addition, this paper only analyzes and discusses the bullwhip effect on the amplification of demand, without considering the situation that the market contraction will lead to the reduction of demand.

Practical implications

This paper considers the distortion degree and delay degree of information feedback, carries out quantitative analysis of bullwhip effect, builds the bullwhip effect model of traditional supply chain and digital supply chain, uses Matlab software to analyze the difference of the influence of supply chain digital transformation on bullwhip effect suppression and puts forward the corresponding control strategy.

Social implications

The research shows that digital transformation can reduce the bullwhip effect in multi-layer supply chain by reducing the information feedback deviation, which is conducive to improving the overall supply chain performance, and government support can accelerate the digital transformation of supply chain to a certain extent.

Originality/value

First, break through the limitations of traditional supply chain research, expand the research perspective to digital supply chain and discuss the weakening effect of digital supply chain on bullwhip effect by comparing the overall performance of the two. Second, quantify the bullwhip effect through information feedback bias and provide an analysis method for the weakening of the bullwhip effect. Third, the driving role of the government in the digital transformation of the supply chain is considered in the study, so that the model is more close to the actual situation of enterprise operation.

Citation

Gao, J., Gao, Y., Guan, T., Liu, S. and Ma, T. (2024), "Inhibitory influence of supply chain digital transformation on bullwhip effect feedback difference", Business Process Management Journal, Vol. 30 No. 1, pp. 135-157. https://doi.org/10.1108/BPMJ-01-2023-0029