Bullwhip Effect
Etymology
The term was coined at Procter & Gamble in the early 1990s after they noticed erratic factory orders for steadily selling diapers; it was popularized by Hau Lee and colleagues in 1997. The same dynamic was earlier described by Jay Forrester (1961) and is sometimes called the “Forrester effect.” The name evokes how a flick of the wrist sends a growing wave down a whip.
noun phrase · /BOOL-hwip ih-FEKT/
The way small swings in customer demand get amplified into ever-larger swings in orders as you move up a supply chain.
What it names
A handle for why suppliers lurch between shortage and glut — a slight wobble at the store becomes a violent whipcrack at the factory, explaining much pandemic-era chaos.
Example
A brief run on webcams triggered a bullwhip effect that left factories overbuilding long after demand had cooled.
Related idea
It is a supply-chain instance of a feedback loop gone wrong: lagged information and safety-stock reactions compound at each link, magnifying rather than dampening the original signal.