Bullwhip Effect: A Qualitative Study in the Automobile Sector of Pakistan

Purpose: Companies cannot survive now in the age of fierce competition without the help of other coordinating companies that actually contributes to the ultimate objective of the firm, to satisfy their customers’ needs. Firm cannot do this all alone as the specialized agencies are available in market that can help a firm to reduce its cost and manage the work in a better way. The basic aim of this study is to explore the phenomenon of bullwhip effect that arouse in supply chains and costs firms heavily due to some reasons within the automobile sector of Pakistan. Research Methodology: This study is conducted using interpretive paradigm and qualitative methods of inquiry. Semi-structured interviews are used in this study as data collection tool whereas sample was selected through convenience and snowball sampling. The sample was the practitioners of automobile industry specifically relating to supply chain management and if supply chain management is not available in company then GM operations or Manager Operations were selected to collect the data. Interviews were audio recorded and transcribed. As the interviews were conducted in Urdu language considering the convenience of the participants, and then translated to English and the translation was confirmed by the expert. Member checking technique was also applied in order to raise the trust worthiness of the study data. Findings: The idea of supply chain management is blurred among the practitioners of supply chain management in Pakistan. Along with this, concept of bullwhip effect is not known to them and they are not realizing this problem at its due importance. Moreover, factors that contribute to bullwhip effect are identified which are same as identified by Hau L Lee, V Padmanabhan, and Seungjin Whang (1997a) but shortage and rationing game is not applicable in this industry and specifically in Pakistani context. Furthermore, some other elements are found that contribute to bullwhip effect such as dealers choices and dependability of company, Sethism: a mentality of the owners and nature of target audience. A new name for bullwhip effect is also found “Artificial Boom”. Originality/value: the study will contribute in the body of knowledge as it is the pioneer study in Pakistan in the field of supply chain management specifically the bullwhip phenomenon. This study will help managers to reduce the impact of the bullwhip effect.