Beer Game helps students test knowledge of a supply chain
UW-Superior students from Supply Chain Management Class (TRSP-300) recently joined professionals in 30 rounds of the Beer Game. The game was held as part of the Lake Superior Chapter of the Institute of Supply Management’s monthly meeting. This game in an interactive and compelling manner displays and quantifies the effects of poor system understanding and inadequate communication for a simple supply chain. The UW-Superior students, who had previously played the game in class, volunteered to be both teachers and participants.
The Beer Distribution game (also known as the Beer Game) is an experiential business simulation game created by professors at MIT’s Sloan School of Management in the early 1960s. The object of the game is to meet customer demand for cases of beer through the distribution side of a supply chain, which includes a retailer, distributor, warehouse and brewery. The game is played by teams of at least four players, often in heated competition, taking at least one hour to complete. In the board game version, players cannot see anything other than what is communicated to them through pieces of paper with numbers signifying orders or product fulfillment requirements. The retailer draws from a deck of cards for what the customer demands, and then orders are placed through the supply chain with built-in production and transportation lead times.
However, verbal communication between players is against the rules and players are guessing what the demand is along the supply chain. It is common for players to look to one another within their supply chain frantically trying to figure out where things are going wrong. As the confusion mounts, stockouts and oversupply start to happen.
At the end of the 30 rounds, the team graphs the orders placed and the inventory for each of the four components of the supply chain and calculates the cost of inventory. The players can see from the analysis the class bullwhip effect and the cost of a poorly managed supply chain.
Dr. Richard Stewart, Professor, Transportation and Logistics Management and Director of the Transportation and Logistics Research Center led a debriefing session following the end of the game. The results of each team were shared, to significant mirth, with a discussion of the lessons learned.
UW-Superior’s Transportation and Logistics Management and Supply Chain Management programs have, since their inception, had significant and ongoing involvement with professional societies along with industry leaders, and the Beer Game is one example of this community outreach.
“Students interacting with professionals enriches both parties and creates bonds that may extend long after the game is over,” said Dr. Stewart.
In addition to playing the Beer Game, the TRSP-300 Supply Chain Management class does complex computer-based supply chain simulation. Supply Chain Management and Transportation and Logistics Management majors also participate and frequently in intercollegiate competitions in their respective disciplines.