The importance of trust and collaboration between companies to mitigate the bullwhip effect in supply chain management

Abstract

The aim of the paper is to develop a theoretical construct about the mitigation of the bullwhip effect, considering trust and collaboration in managing the supply chain. The study presents a qualitative research based on the systematic literature review, which is tested through field research, involving companies in the medical and hospital area belonging to the same supply chain. The bullwhip effect has been observed throughout the industry for many years. Several academic studies have assigned to operating causes the reason for its occurrence. Few studies have focused behavioral causes. Through this study, it appears that affective trust (honesty, mutual understanding, credibility, respect and compliance) and trust in the competence (knowledge/technique, commitment in the relationship) are both necessary for keeping the relationship, but without affective trust, the relationship does not develop. Moreover, an organizational culture based on trust and collaboration exchange, and knowledge related to processes and technology among businesses, contributing to the joint planning and collaboration in the information sharing occurs. Thus, aspects of behavior toward partners of supply chain companies can mitigate the operational causes of the bullwhip effect by improving information and knowledge sharing, demand forecasting, replenishment policy, and reducing the risk coordination among the chain participants.