System-Wide Training and Coordination, the Impact of Learning on the Bullwhip Effect : An Experimental Study

This paper investigates how training and communication affect the bullwhip effect, in supply chains - an observation that orders become more variable as one moves towards the source of production. We study the issue in the laboratory using the Beer Distribution Game, and find that the visibility of one's own supply line, (unfilled orders) helps stabilize the system, but does not eliminate the bullwhip effect. We test two different training protocols - system wide training, in which each participant experiences every supply chain role, and role-specific training, in which each participant experiences a single role only. We find that neither training protocol improves performance in our experiments, but when training is combined with communication, performance improves markedly. Our results indicate that the bullwhip effect is, at least in part, due to insufficient coordination between supply chain partners