The bullwhip effect describes how small fluctuations in end-customer demand grow into ever-larger swings in orders as they move upstream from retailer to distributor to manufacturer to raw-material supplier. Each tier over-orders to buffer uncertainty, amplifying the signal.
Causes include batching of orders, forecast over-reaction, price promotions, and lack of shared demand data. Lean countermeasures — small lots, pull systems, and level production scheduling — directly dampen it.