Supply Chain Simulation – “The Beer Game”
Supply Chain Simulation Game – known as the ‘Beer Game’ is a Supply Chain Simulation activity for between 15 and 50 participants and is an experiential learning activity that powerfully demonstrates supply chain interdependencies.
- The “Beer Game” was first developed at MIT in the 1960’s as a means of demonstrating the advantages of taking an integrated approach to supply chain management.
- Benchmarking Success (BMS) have significantly enhanced the original to additionally highlight the dynamic issues around a Sales & Operations Planning (S&OP) process.
- As a result the simulation in its current format invariably provides the important “ah ha” experiences for participants.
- The game is a role play simulation involving the four key roles of manufacturing, wholesalers, distributors and retailers, although the exact scenario can be tailored to suit specific business operating environments.
- The game is run over 4 to 6 hours depending on the number of runs and level of discussion from participants. It is ideal as a major part of a larger workshop that maybe of 1 or 2 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 the communication flows required for effective supply chain management
- Understanding the effect of supply chain operation on inventory
- The 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 etc) acquire a common understanding of how much the supply chain (and business costs) can be affected by such things as lead times, customer demand fluctuations, out of stocks, supplier behaviour and supply fluctuations etc.
- Four groups are created with approximately 5 members in each group.
- The optimum group size is 20 but we have run groups as small as 5 (although this is far from ideal) and in excess of 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 3 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.
- Second run is modified by the independent plans developed by the teams. The goal remains the same, high service and low cost.
- Third run allows participants to then situate the game in the workplace and plan how their behaviour will change as a result of the game. This is the ‘how it applies to our business’ phase.
- All runs are followed by a debrief on what went well and what constrained the process. A detailed de-brief of the process and discussion about results is also provided at each stage
- 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
Supply Chain Manager
Jin Kiat Koh
Director, Regional Sales Operations
Harley-Davidson Asia Pacific (Singapore)