Hockey Stick Phenomenon: Supply Chain Management Challenge In Brazil

The objective of this study is to investigate a phenomenon that occurs in Brazil, specifically the spike in demand at the end of the sales period, known as the hockey stick phenomenon. This analysis will encompass the causes as well as the impacts of this phenomenon, in a way that allows alternative policies to be evaluated. Data was collected from a Brazilian branch of a large multinational in the non-durable consumer goods industry and in semi-structured interviews conducted face-to-face with executives of 26 clients. The data was used to generate a continuous simulation model based on the methods of systems dynamics. The findings showed that the phenomenon negatively impacted the manufacturer's financial performance in the long term and indicated required changes necessary to remediate the phenomenon. This is an empirical study on the hockey stick phenomenon, a problem that affects diverse companies in Brazil. 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Doctor of Philosophy

dissertationSupply chain management involves coordination and collaboration among organizations at different echelons of a supply chain. This dissertation explores two challenges to supply chain coordination: trade promotion (sales incentive offered by a manufacturer to its downstream customers, e.g., distributors or retailers) and bullwhip effect (a phenomenon of amplification of demand variability from downstream echelons to upstream echelons in the supply chain). Trade promotion represents one of the most important elements of the marketing mix and accounts for about 20% of manufacturers’ revenue. However, the management of trade promotion remains in a relatively under-researched state, especially for nongrocery products. This dissertation describes and models the effectiveness of trade promotion for healthcare products in a multiechelon pharmaceutical supply chain. Trade promotion is identified in the literature as a cause of the bullwhip effect, which has long been of interest to both researchers in academia and industrial practitioners. This dissertation develops a framework to decompose the conventional inter-echelon bullwhip measure into three intra-echelon bullwhips, namely, the shipment, manufacturing, and order bullwhips, and explores the empirical relationship between the bullwhip and the time duration over which it is measured. This dissertation also analyzes the potential bias in aggregated bullwhip measurement and examines various driving factors of the bullwhip effect. Theoretical and managerial implications of the findings are discussed