Supply Chain Simulation – “The Beer Game” as an Educational Tool
Here at Benchmarking Success, and in the other companies in the Logistics Bureau Group, The Beer Game has proven an invaluable tool for helping our clients’ leaders, managers, and staff to understand supply chain dynamics. The Beer game was probably the first ever example of gamification in the supply chain industry and is still one of the most commonly used.
Later on this page, we’ll discuss The Beer Game in detail, and explain how we can use it to help your company prepare for S&OP implementation or improvement.
First though, you might be wondering if simulations and other forms of gamification can really be helpful in educating professionals about supply chain management—and if so, how.
How Gamification Aids Supply Chain Learning
One of the challenges of supply-chain-management education, is to define and demonstrate the sometimes-complicated concepts involved.
It is challenging because without seeing and experiencing how these concepts apply in a real-world environment, it takes an especially sharp student to grasp and turn them to an advantage in the workplace. Many forget the knowledge learned before they can even put it into practice.
From our experience in using The Beer Game as a learning aid, it is fair to say that the subject matter tends to be more “sticky” than when it is covered using slide decks, textbooks, and trainers’ anecdotes—and that’s probably for the following three reasons:
1. Realistic Demonstrability
Supply chain simulations, in the guise of board (and more recently, computer) games, provide the opportunity to test the concepts out, visualise the effects, and get a feel for the mechanics involved.
2. Time Compression
Simulations like The Beer Game compress the time needed to understand a concept in action, enabling students, trainees, or delegates to experience supply chain phenomena such as the bullwhip effect in a matter of hours, rather than the days and weeks it would take to study in the real world.
3. Student Engagement
Some supply chain topics can be a little dry when explored in a classroom or workshop environment. Gamification can inject some fun into the learning process, especially when games or simulations pit individuals or teams against one another.
The Beer Game with Benchmarking Success
If your company is struggling to get the right results from your sales and operations planning program, a day at The Beer Game can make a significant difference for the people who make up your S&OP team.
Here are a few interesting facts about The Beer Game, and details of how we can facilitate the simulation as part of a sales and operations planning workshop, or as a standalone learning event:
- Up to 50 workshop participants can play our version of The Beer Game, an experiential learning activity that powerfully demonstrates supply chain interdependencies.
- The Beer Game was first developed at MIT in the 1960s as a means of demonstrating the advantages of taking an integrated approach to supply chain management.
- Benchmarking Success (BMS) has significantly enhanced and adapted the original to highlight the dynamic issues around a Sales & Operations Planning (S&OP) process.
- As a result, the simulation in its current format invariably provides the critical “ah-ha” experiences for participants.
- The game is a role-play simulation involving the four key roles of manufacturing, wholesalers, distributors, and retailers, although we can tailor the exact scenario to suit specific business operating environments.
- The game is run over four to six hours depending on the number of runs and level of discussion from participants. It is ideal as part of a more extensive workshop that may be of one or two days duration.
- BMS provide all materials and game boards etc. We facilitate the game plus all discussion during the conducting of the game.
Objectives & Outcomes
- The object of the game is to powerfully demonstrate, through simulation, how inter-related and inter-dependant a real supply chain is and the effect that people can have on each other when working in a typical supply chain that involves multiple connected parties.
- The simulation seeks to achieve the above with all the pressures of playing in a real world, complex, operating environment where players are at the mercy of forces outside of their direct control in the system.
- The objective through all the iterations is to minimise cost while at the same time maximising service to customers.
- Outcomes of participation in the Beer Game include:
- An appreciation of supply chain dynamics
- Understanding of communication flows required for effective supply chain management
- Understanding the effect of supply chain operation on inventories
- Development and effective implementation of Sales and Operations Planning processes
- The simulation is a powerful tool for ensuring people from different functional areas (sales, marketing, finance, manufacturing, procurement, customer service, warehouse, distribution, and others) acquire a common understanding of how much the supply chain (and business costs) can be affected by factors such as lead times, customer demand fluctuations, out of stocks, supplier behaviour and supply fluctuations.
- Four groups are created with approximately five members in each group.
- The optimum group size is 20, but we have run groups as small as five (although this is far from ideal), and more than 50 participants.
- The goal of each group for each run is to have the highest possible service performance but at the lowest possible overall cost.
- The program comprises of three separate stages. These stages are:
- First run as for traditional “Beer Game”. The groups are then sent away to plan a second run. They provide a written plan of their revised process and approach to the second run.
- The second run is modified by the independent plans developed by the teams. The goal remains the same, high service and low cost.
- The third run allows participants to situate the game in the workplace and plan how their behaviour will change. In other words, it is the ‘how it applies to our business’ phase.
- Two debriefings follow each run-through of the game. The first debriefing covers what went well and what constrained the process. In the second, we provide a detailed review of the process and discuss the outcomes.
- The participants identify the learnings they have gained from the process.
- A detailed plan for how the process may differ on return to the workplace can also be developed.
Network Design Workshop
“Definitely the best consultancy when it comes to the supply chain industry.”
Supply Chain Manager
“I would definitely recommend the Logistics Bureau Beer Game to any company that is interested in training their employees on supply chain concepts/ S&OP. The game received great thumbs-ups from my team and everyone walked away with a personal learning outcome. The fact that the game was played on a mat using tokens is multi-sensorial in approach and as a result, retention of learnings is much higher.”
Jin Kiat Koh
Director, Regional Sales Operations
Harley-Davidson Asia Pacific (Singapore)