Compendium admissions 2023-25

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Bullwhip Effect
The Bullwhip Effect occurs as orders are relayed from retailers to distributors, wholesalers, and manufacturers, with fluctuations increasing at each step in the sequence. i.e., the variability in demand is magnified as one moves from the customer to the producer in the supply chain. According to research by BIS economists, the bullwhip effect occurs when "supply chain participants react to perceived shortages by ordering more, ordering earlier, and hoarding inputs. When examined in isolation, this type of reaction is prudent and rational. However, it can lead to aggregate effects that are ultimately self-defeating.". As a result, such behavior exacerbates shortages and raises costs. However, a closer look at individual supply-chain breakdowns demonstrates that "bottlenecks" are not just a uniform pressure down the supply chain. Instead, we have seen commodity demand swing as pressures arose at various places along the supply chain, leading to significant price swings" In other words, the bullwhip effect caused some commodity and input prices to skyrocket, only to plummet later. The BIS cites the price of iron ore, lumber, and coal and the cost of shipping containers as examples. Prices skyrocketed and then plummeted in each case as capacity grew faster than demand.

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Kaizen
Kaizen refers to business activities that continuously improve all functions and involve all employees, from the CEO to the assembly line workers. Kaizen is a term that refers to ongoing or continuous improvement. The definition of kaizen comes from two Japanese words ‘kai,’ meaning change and zen meaning good The Japanese philosophy was first introduced by Toyota in the sand has since been adopted by thousands of companies around the globe. This lean transformation encourages an improvement culture that gradually increases quality, efficiency, and profitability.

The Kaizen process can be summarized into four steps, i.e., PDCA (Plan-
Do-Check-Act). Each step entails as follows

86 Plan – define your objective and how you’ll achieve it. Do – implement the plan and make any changes required to ensure it works. Check – evaluate the results and identify opportunities for improvement. Act – adjust based on what’s found in the previous step.

The benefits of Kaizen areas follows
• Continuous Improvement of product or service leading to better customer satisfaction.
• Improving quality, productivity & efficiency leads to process improvement and hence can have a competitive advantage.
• Encourages and engages employees at all levels while discussing and finding solutions. It also improves team working skills.
• People are encouraged to share ideas and suggestions. Thus, the information doesn’t stay in silos.
• Finding solutions to problems continuously also enhances creativity.
Kanban:
Visual system for managing work as it moves through a process. Work items are represented visually on a kanban board, allowing team members to seethe state of every piece of work at anytime.
Kanban aims to identify potential bottlenecks in your process and fix them so work can flow through them cost-effectively at an optimal speed or throughput.

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