The bullwhip effect is a large change in the supply position upstream. It refers to swings in inventory in response to changes in customer demand, as one looks to firms further back in the supply chain for a product. Essentially, demand spikes as orders flow back from retailer to distributor, to original equipment manufacturers, to tier-one suppliers, and so on. Inventory would move from being backordered to inventory surplus. This is brought about by the serial nature of communicating orders up the chain with transportation delays of moving product down the chain. The bullwhip effect can be eliminated by coordinating the supply chain.