The project described here can be used in undergraduate or graduate industrial engineering or business courses dealing with supply chains.

Simulation kits:

• Supply Chain Map
• Chips (as product or item)
• Post-it Note Pads (4 colors for each Supply Chain stage)
• Customer Order Card (Customer’s Weekly Order)

The role-play simulation demonstrates the dynamics of supply chain management. It highlights the complexities and challenges of managing supply chains and the impact of decision-making on inventory levels, order fulfillment, and overall performance.

It is a powerful educational tool for understanding supply chain dynamics, the importance of strategic decision-making, and the impact of the bullwhip effect on overall supply chain performance.

Goal: 

The main goal of the simulation is to manage inventory levels while minimizing costs related to holding inventory and backorders. Players aim to balance supply and demand effectively to avoid stockouts and excess inventory.

Roles:

The simulation involves four roles, each representing a stage in the beer supply chain (i.e., Retailer, Wholesaler, Distributor, and Factory).

Each role is responsible for managing orders and inventory at their stage of the supply chain. Players make decisions based on the orders they receive from the next stage downstream (customer demand) and the orders they place to the next stage upstream (supplier).

The Bullwhip Effect:

A key concept illustrated by the simulation is the bullwhip effect, which describes how small fluctuations in customer demand can lead to larger variations in orders and inventory levels as you move up the supply chain.

Lessons Learned:

The simulation teaches several important lessons about supply chain management:

• Importance of Communication: Sharing information across the supply chain can help mitigate the bullwhip effect.
• Demand Forecasting: Accurate demand forecasting and responsive supply chain practices can reduce inventory fluctuations.
• Coordination: Coordinated efforts among supply chain partners can lead to more stable and efficient supply chains.