Abstract
Addressing the root causes of schedule instability, particularly the unreliability of suppliers’ production processes in a supply network, can help to curtail short-term demand variations and increase the overall supply chain efficiency. Hence, we introduce a stylized automotive supply chain with two suppliers and a single original equipment manufacturer (OEM). This supply chain can be disrupted by a shortage occurring at one of the suppliers due to random machine breakdowns, what consequently creates dependent requirements variations (DRV) affecting both the OEM and the other supplier. Using a System Dynamics (SD) simulation which contains the said mechanism causing schedule instability, comparative simulation scenarios were carried out to gain theoretical insights with regard to the nature of DRV. As a result, the simulation study shows that the Bullwhip Effect is not just detectable on a vertical supply chain level under demand uncertainties, but also on a horizontal supply chain level when production risks are present.
Published Version
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