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  • Writer's pictureestebanlizarazo

Reflections learnt from the Beer Game to our complex world

The Beer Game

The Beer Game is a simulation of a four-echelon Supply Chain: i. the Factory, ii. the Central Distribution Center, iii. the Distributor and the iv. the Retailer. The game is intended for 50 weeks of simulation in which, in each turn, the players define how much should be produced or ordered. The beer game intends to illustrate the bullwhip effect in which minor distortions in the retailer's demand create huge effects bottom-up (the Factory). Through the game, we can observe a simplistic panorama of a Supply Chain (1 product, 1-SKU, one factory, one distributor, one retailer, unlimited raw material, unlimited load capacity, no-discounts, fixed-currency, non-lead-times deviation) it is a powerful and practical academic tool to understand how difficult is to orchestrate the Supply Chain.

According to academics (Disney and Towill, 2001), the Bullwhip effect can be explained by four variables: i. Price fluctuations or the Promotion Effect, ii. Rationing and gaming or the Houlihan Effect, iii. Demand signal processing and non-zero lead times or the Forrester Effect, and iv. Order batching or the Burbidge Effect. Within the simulation, the participants at Inalde experienced the Houlihan Effect and the Forrester effect vividly in which, paraphrasing some students: "I didn't have any stock and got some back-orders, so I started to increase the orders without following any logical strategy, I just wanted to ensure as much stock as possible". In the end, the worst performances in the game were governed by the "Rule of Fear", the fear of a stock-out. The lower performance results were also enforced by selfish behaviour and an only-my-stock position. Lessons for a disruption Crisis

The beer game urges us to behave rationally in terms of consumption to dismiss a blunder consequence. We need to share more and think more as a whole; we need to have a systemic view. Maybe that is what Supply Chain can teach us all. Let us work to aid our globalized world in adopting collaborative behaviour and keep calm, reflect, be generous and act as a member of the best and greatest Supply Chain, the Human Kind. healthcare. Finally I urge you to think as a supply network, that is to collaborate for reducing inefficiencies, wastages and improve our standards of life.

By the way, I don't know what is happening to people with toilet paper, and COVID-19 is a respiratory disease, not a gastrointestinal virus. My greetings and gratitude to the MBA cohort 2022-2024 at Inalde Business School. It was a pleasure to meet you, I had a lot of fun

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