Impact of Demonetization on Supply Chain in Indian Context

Supply chain management is the flow of materials, information, and finances from one level to another. It is said to be effective if right information can be traversed in both the directions in right time. If this information is distorted at any level of supply chain it is called bullwhip effect. The bullwhip effect always remains a matter of concern in supply chain and demonetization has amplified it many fold. Not long ago, Demonetization in India had not only affected the supply chain adversely but also scarcity of cash had imposed a threat on day to day business. In this paper, an attempt has been made to establish that the demonetization can be one of the major causes of bullwhip effect. With the help of data collected from RBI reports, a complete analysis has been done in support of this very fact. Moreover, some remedies are suggested to overcome the said problem in supply chain due to demonetization.