Odd Lots
We Might Be Seeing the Other Side of the ‘Bullwhip Effect’
This article is for subscribers only.
For as long as the supply chain has been deeply stressed — which is well over a year now — we’ve been hearing a lot about the so-called bullwhip effect.
Goods become scarce. Companies fear that they will be unable to have goods to sell. They start to over-order key components, just to be sure they can keep operating. This makes goods more scarce. Eventually the cycle turns. Everyone has ordered too much. Orders get slashed. Gluts emerge. Prices fall. You know the drill.