|Sem 4 and Sem 2 MBA Operations 2016-18, 2017-19,|
The beer game was played by MBA students in the subject of supply chain management of Alliance School of business sem 4 and sem 2, Operations stream in March '18 at AU. This is the sixth continuous year, the game is being played in the University.
The game was played in the seminar hall by dividing the students into six teams of ten members each. The session was in full swing with all the entities extending full support. After giving time for discussion and contemplation and thinking, the students assembled the following day to discuss the nitty gritty of the game like the impact of improper or magnified information flow, the order variance amplification effect - commonly called the Bullwhip effect etc.
The game was played by analysing two important aspects, costs and orders placed.
|Cost structure in the chain|
Retailer 1 / 2
(Blue colour signals profits and red colour signals losses.)
The supply chain costs realised while playing the game by all the six teams is given here.
These SC costs are taking away from the SC profits which the SC entities would otherwise have earned had they stocked enough and played the game intelligently. But the uncertainties and the selfish objectives of stocking more to prevent shortages in future led to the stocks at the entities varying considerably, leading to excessive costs of holding, shortage and at the end of period, obsolescence costs.
supply chain as a whole.
While analysing the mean and standard deviation of orders placed by the downstream entities on the upstream entities right from the retailer to whole saler, wholesaler to distributor, distributor to manufacturer and finally manufacturer to supplier, it was found that irrespective of the supply chain, there was amplification of the orders placed and amplification of the variance of the orders placed - this is the phenomenon, most commonly referred to as Bullwhip Effect.
Observations of Mean (mhu) and Standard deviation (sigma) of orders placed by each entity on the upstream entity
Mean (mhu) and
Std dev. (sigma) of
RETAILER I / II
Green teams display Bullwhip effect in its entirety
Blue teams display Bullwhip effect partially
We discussed the many reasons for the bullwhip effect like,
- incorrect forecasts,
- batching and pricing phenomenon,
- rational thinking of behalf of the players and
- selfish behaviour of the entities to optimise their costs compromising the overall supply chain profitability
Overall the Beer Distribution Game played had great learning inputs for the students. In addition, in a practical setup, they understood how in spite of noble objectives of the entities to keep supply chain costs low, any one entity aiming local optima in the system could disrupt all the entities costs very much and topple the apple cart ..
Thanks once again to Massachusetts Institute of Technology (MIT) at Boston for providing such a great idea through the game to understand the dynamics of variation of supply chain costs ..