Product Attribute Bullwhip in the Technology Planning Process and a Methodology to Reduce It

Abstract

This paper considers the upstream flow of product attribute forecast information often used to drive the technology planning process. It is noted that, while downstream customers are willing to pay for improvements in key product attributes, they do not always provide accurate and timely product attribute forecasts to upstream suppliers. As a result of this increasing distortion of product attribute demand as information flows upstream, upstream suppliers often either fail to develop technology that will be needed in the marketplace or develop technology that ultimately is unused. This is shown to be a strategic, technology planning analog to the tactical, order decision problem of order quantity bullwhip observed in the field of supply chain management. As such, we define the technology planning problem under consideration here as "product attribute bullwhip." Based on solutions employed to address order quantity bullwhip in supply chain management, we propose a methodology to reduce product attribute bullwhip by comparing product attribute information obtained directly from the end user with that which flows upstream through the supply chain. To illustrate this effect, we apply the proposed methodology to an example from the wireless communication industry by comparing trends in the perceived value of cellular telephone handset face area with trends in the perceived value of face area observed at the component level of the supply chain.