Bullwhip Effect in Production Control a Comparison Between Traditional Methods and LPS

Pedro Pereira1, Nuno Cachadinha2, Omar Zegarra3 & Luis Alarcón4

1MSc., Nova University of Lisbon, Portugal. E-mail: pgp15770@campus.fct.unl.pt
2Asst. Professor, Nova University of Lisbon, Portugal presently at Technion-Israel Institute of Technology. E-mail: nmpc@.fct.unl.pt
3Candidate and Graduate Researcher at Centro de Excelencia en Gestión de Producción (GEPUC), Pontificia Universidad Católica de Chile. E-mail:ozegarra@uc.cl
4Head and Professor, Department of Construction Engineering and Management, Pontificia Universidade Católica de Chile. E-mail: lalarcon@ing.puc.cl

Abstract

Last Planner System (LPS) has produced good results in reducing production time of construction projects, increasing productivity and mitigating the variability that is inherent to construction management. However, the Percent Plan Complete (PPC) rates usually obtained are still far from the ideal value of 100%. This study evaluates the hypothesis that the Bullwhip Effect (BWE) – the cumulative distortion of variability - exists in traditional control methods, which don’t have explicit and systematized mechanisms for variability reduction in production control, but also in LPS. To verify this hypothesis a method was formulated to extend the scope of the detection and quantification of the BWE in projects using LPS to traditional production control system (TPCS) methods. It was concluded that the BWE exists in both production control systems – Traditional and LPS’s – and that the BWE is not necessarily bigger in the traditional -system, even though the variability associated is much higher. The use of a BWE index is proposed as a tool for monitoring and controlling variability of production control in construction projects, as well as the utilization of this index as a Key Performance Indicator (KPI) that provides the stakeholders with a deeper control of the variability in both production systems.

Keywords

Bullwhip Effect, Production Control, Last Planner System, Variability, Planning Management

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Reference

Pereira, P. , Cachadinha, N. , Zegarra, O. & Alarcón, L. 2013, 'Bullwhip Effect in Production Control a Comparison Between Traditional Methods and LPS' In:, Formoso, C.T. & Tzortzopoulos, P., 21th Annual Conference of the International Group for Lean Construction. Fortaleza, Brazil, 31-2 Aug 2013. pp 619-628

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