The bullwhip effect in closed-loop supply chains: A systematic literature review

Abstract

The bullwhip effect, or how uncertainty associated with the end customers' demand propagates through the entire supply chain, has been widely discussed in supply-chain management literature. Although there is a well-established research stream on the causes and mitigating factors for the bullwhip effect in forward supply chains, few studies have investigated how this phenomenon manifests itself in closed-loop supply chains. We argue that this phenomenon can affect the supply chain's environmental performance by increasing emissions, waste and consumption of natural resources. Aiming at filling this theoretical gap, this article compares the causes and mitigating factors of the bullwhip effect in forward supply chains and closed-loop supply chains. To this end, we employ a systematic literature review that combines bibliometric and content analyses. The studies examined in our review indicate that the causes of the bullwhip effect in closed-loop supply chains are similar to those in forward supply chains. However, most of the studies have not considered that the quality of returned products are different from the quality of their new counterparts' products, adding another variable into the complexity of a given supply chain which, in turn, could lead to higher variability, thereby causing the bullwhip effect. Regarding mitigation, we found that the primary mitigating factor is related to increasing the product return rate. Moreover, we suggest that closing a supply chain can reduce the bullwhip effect, which could lead to positive impacts in the environmental performance of supply chains.