The cause of bullwhip effect in pharmaceutical supply chain

The bullwhip effect is the phenomenon of increasing demand variability in the supply chain as one moves from the downstream (the retailer) to the upstream (manufacturer) that will cause the higher cost impact on each of the supply chain pipeline from supplier to distributor and lead to the higher price of the pharmaceutical products. Having the analysis from the four cause of Bullwhip effect will help to reduce the bullwhip effect on the pharmaceutical supply chain. There is a possibility to reduce the bullwhip effect by using modern ERP systems which implement Material Requirement Planning system in the production of finished goods. However, the bullwhip effect still occurred that came from demand and forecast updating as well as rationing and shortage gaming by the distributor. Additionally the higher forecast deviation will cause the higher cost impact in the production of finished goods.