Beer, Bullwhips, and Board games: Fancy Some Supply Chain Education?

 

 

Have you ever played the Beer Game?

It’s been around for years but is still one of the best ways to teach people about Supply chain, forecasting and the need for cross-functional communication.

 

The Beer Game: Stimulation by Simulation

At Logistics Bureau we use the Beer Game as a training tool to teach people about Sales & Operations Planning. (S&OP) It’s great fun and really accelerates the learning process as team members try to outdo each other.

 

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The most important single principle demonstrated by the beer game is called “the bullwhip effect,” which is the process by which demand gets distorted as it’s communicated through the supply chain.

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Impacts of the bullwhip effect include:

• Inventory excess or shortage
• Inability of suppliers to fulfill customer orders
• Tense relationships between customers and suppliers (all the way up the supply chain)
• Increased transportation costs as customers order more frequently and in smaller quantities

The bullwhip effect is notoriously difficult to alleviate, but there are ways to minimise the amount of distortion that occurs.

 

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One approach is to implement a program of sales and operations planning (S&OP), which if managed effectively, can help to increase the accuracy of forecasts and demand estimates.

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However, as a solution, S&OP is almost as notoriously difficult to implement as the bullwhip effect is to mitigate. Like anything though, there’s a right and wrong way to go about S&OP. The companies that get it right are often those prepared to enlist some help from external specialists.

 

You Bring the Players, We’ll Bring the Beer Game

In the final analysis, it’s evident that supply chain management is a game of collaboration, and that functional divides are the enemy of effectiveness.

The good news is that thanks to the creative genius of computing pioneer Jay Forrester (who invented the Beer Game back in the 1950s), there’s a stimulating but realistic way to learn about the need for collaboration throughout the supply chain.

At Logistics Bureau, we love to witness the “aha!” moments unfold when we facilitate beer game sessions for our clients. It’s a great way to break ice between disparate functional teams and get them into the groove of collaborative problem solving, which in turn, is a valuable first step towards effective S&OP.

 

Break Out the Beer Game

To learn more about the Beer Game and how we can help your supply chain team collaborate successfully, just jump onto this link: Beer Game – Supply Chain Simulation.

Of course, your company may be beyond the introductory stage and ready to think about implementing S&OP. If so, why not take a look at our sales and operations planning services? Our team is ready and waiting to help you make it happen.

 

Editor’s Note: This post was originally published in June 2012, under the title “The Beer Game.” It has now been revamped and updated with more comprehensive information.