Whiplash effect a link in the supply chain of packaging for soft drinks: demand forecast oscillation during the 2014 world cup

Abstract

This article analyzes the behavior of a link in the supply chain of PET (polyethylene terephthalate) bottles for soft drinks, from the standpoint of the packaging manufacturer, aiming to understand the so called whiplash effect (WE). The manufacturer is concerned about the impact on stocks caused by an unexpected variability on the demand during a forthcoming period. Such oscillations are likely to occur during the Soccer World Cup 2014 in Brazil, when demand levels will be significantly increased. Having this in mind, it is showed a calculation to dimension the WE applied to two levels of the studied chain, using demand data from January to December 2010. The result shows an intensity factor of 4.60 for the PET bottles demand. This parameter could be considered a warning for the next periods. In order to minimize the variability of demand caused by this effect, some management actions were proposed, all of them suggesting improving the dissemination of information in the chain. Better connection among the chain members and the integration of companies were proposed, from suppliers of raw materials to the final customer, on the assumption that the dissemination of information in the chain may reduce the WE.