It has been recognized or assumed by consumers’ that the stocks have shortages or companies are out of stock, but the reality is there are no shortages in any section of the supply chain, not even in raw materials. The main intention of consumer buying more than enough good such as 100 rolls or 200 rolls of toilet paper as they overbuy them so that they do not have to buy them again for the next 6 months or more. This happens in events such as global pandemic like Coronavirus, national emergency, war, or in case of lockdowns and transport restrictions. Moreover, since there is no shortage of stock of toiler paper, when they are back in stocks, the demand for toilet paper will drop as consumers have already stocked up. As stated in the case study, the global coronavirus pandemic has made business organizations rethink about their supply chain efficiencies to meet high and aggressive customer demands for any products or service effectively (Handfield, Graham and Burns, 2020). The same situation of bullwhip effect that occurred amid the coronavirus pandemic in the events of a national strike, lockdowns, recession, and when the price of the particular product declines at a reasonable rate or discount. These events make buyers or consumers overbuy products with the perception of being safeguard from being out of stock and which in turn affects the supply chain inventory and makes a whip to the supply chain distribution channels (Cao, Xiao and Sun, 2016). Relating to the example of toilet paper, if a consumer buys 100 rolls at once, then he/she is making the stock empty and inclines towards wholesalers and manufacturers to send more goods to meet the next consumers demand effectively (Granato, 2020). It signals or makes whip to the supply chain inventory concerning the toiler paper rolls to deliver more goods and placing them to shelves so that consumer demands never gets out of stock. Also, to persist competitive within the rivalry market amid events like coronavirus pandemic and ensure supply chain management effectiveness (Granato, 2020).
To justify this prospect, the supply chain inventory of the two commodities; grocery and sanitizers will be affected due to the sky-rocketed demand of consumer during the pandemic like Covid 19. Besides that, as the stocks in shelves of supermarkets or hypermarkets will end, the wholesalers and manufacturers will be informed or signalled to supply a greater number of goods to fill up the stocks and ensure meeting consumer demands effectively. On the other hand, it is of the obvious fact that grocery items are fast consuming goods that people need daily or weekly, thus, amid transport restrictions and city lockdowns, people fear of stores being shut and stocks getting out of stock (Granato, 2020). This is the main reason why consumers overbuy in panic amid emergencies like virus pandemic, war, or declaration of national emergency within the country.
Braz, A., De Mello, A., de Vasconcelos Gomes, L. and de Souza Nascimento, P., 2018. The bullwhip effect in closed-loop supply chains: A systematic literature review. Journal of Cleaner Production, 202, pp.376-389.
Cao, B., Xiao, Z. and Sun, J., 2016. A study of the bullwhip effect in supply- and demand-driven supply chain. Journal of Industrial and Production Engineering, 34(2), pp.124-134.
Granato, R., 2020. Countering the Dreaded Supply Chain Bullwhip Effect in A COVID-19 World - Supply Chain 24/7. [online] Supplychain247.com. Available at: <https://www.supplychain247.com/article/countering_the_supply_chain_bullwhip_effect_in_a_covid_19_world>
Handfield, R., Graham, G. and Burns, L., 2020. Coronavirus, tariffs, trade wars and supply chain evolutionary design. International Journal of Operations & Production Management, 1(2).
Ivanov, D., 2020. Predicting the impacts of epidemic outbreaks on global supply chains: A simulation-based analysis on the coronavirus outbreak (COVID-19/SARS-CoV-2) case. Transportation Research Part E: Logistics and Transportation Review, 136, p.101922.
Rajasekharan, M., 2020. The COVID-19 Supply Chain Impact – Avoiding The Bullwhip Effect. [online] Supply and Demand Chain Executive. Available at: <https://www.sdcexec.com/sourcing-procurement/article/21134023/cleo-the-covid19-supply-chain-impact-avoiding-the-bullwhip-effect>
Yeung, J., 2020. Thieves Stole 600 Toilet Paper Rolls in Hong Kong Amid Fears of Coronavirus Shortages. [online] CNN. Available at: <https://edition.cnn.com/2020/02/17/asia/hong-kong-toilet-roll-robbery-intl-hnk-scli/index.html>
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