There are 2 ways to answer the above question:
Option #1
1. The growing length of supply chains and the increased number of parties in the transaction creates the perfect recipe for a bullwhip effect: the amplification of changes in order volume as one progresses from the origin of the variation towards the ultimate source.
2. The large number of intermediaries and intermediary stocking locations create surplus inventories in some places and shortages in others.
3. The large number of actors in the journey from the source to the customer create divergences and time lags between each party’s knowledge and estimates of what product is coming and when it will be there.
4. People have to anticipate what is going to happen and plan in advance. Without good tools to do that, most estimates are wrong. Frequently, by the time products got to where they were supposed to be, they were not needed any more.
5. The global nature of the interactions added language, cultural and time-zone barriers that escalate these problems.
The result is excess inventory, shortages, over-ordering and obsolete inventory. Costs balloon and sales prices fluctuate while inventory is in transit.
Option #2
Just play the “Beer Game”
People are good. The belief in the inherent virtue of people, while analyzing any system should prohibit us to accept the answer that a person is responsible for the issue. That way it helps one to continue diving deeper till we get to a systemic issue for the problem.