The Forrester Effect Map is a business

Business

A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...

 technique used to analyse the disturbance on the supply chain

Supply chain

A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...

 of reorder activity.

The tool is one of the seven Value Stream Mapping

Value Stream Mapping

Value stream mapping is a lean manufacturing technique used to analyze and design the flow of materials and information required to bring a product or service to a consumer. At Toyota, where the technique originated, it is known as "material and information flow mapping"...

 tools as defined by Hines and Rich.

Forrester's research, (Industrial dynamics, MIT Press 1961) showed that demand

Demand (economics)

In economics, demand is the desire to own anything, the ability to pay for it, and the willingness to pay . The term demand signifies the ability or the willingness to buy a particular commodity at a given point of time....

 could be erratic with peaks and troughs commonplace within most organizations. These variations in requirements and supply

Supply (economics)

In economics, supply is the amount of some product producers are willing and able to sell at a given price all other factors being held constant. Usually, supply is plotted as a supply curve showing the relationship of price to the amount of product businesses are willing to sell.In economics the...

 are amplified within the supply chain when re-orders are made.

Process

The map is portrayed as a graph with a line showing elements such as customer forecasts, shipments to customers, orders for raw materials over a period of time shown on the x axis.

Results

Distortion between inventory

Inventory

Inventory means a list compiled for some formal purpose, such as the details of an estate going to probate, or the contents of a house let furnished. This remains the prime meaning in British English...

 levels is shown as a result of poor communication and an inability to schedule

Schedule (workplace)

A schedule, often called a rota, is a list of employees who are working on any given day, week, or month in a workplace. A schedule is necessary for the day-to-day operation of any retail store or manufacturing facility. The process of creating a schedule is called scheduling...

accurately. The flatter the lines displayed the leaner the system and more accurate the forecast.

External links

• http://www.qdc.fi/article/PP_1999.pdf - "Demand Amplification in Supply Chain in Mills ...."