The Supply Chain Game “Beer Game” questions & solutions — Role of Retailer, Wholesaler, Distributor or Manufacturer in Beer Game, How to reduce Bullwhip effect in Supply Chain Beer Game
Please find the game link below:
https://beergame.opexanalytics.com/#/
The Supply Chain Game Questions
- Are there certain actions or behaviors during the game that you did particularly well or badly? And why?
- In the supply chain game which role (Role of Retailer, Wholesaler, Distributor or Manufacturer) do you consider was most difficult to manage inventory? Explain why ?
- In what ways do you think you could improve your own practice in relation to gathering information and intelligence that will help to reduce the bullwhip effect?
Solution to Supply Chain Game “Beer Game”
Initially I was not able to place orders accurately due to which stock out cost was getting increased every time I place an order due to which I lost game many times and contributed to bullwhip effect by big values above than 4. Later on I started noting my orders on notepad along with replenishment period to get exact number of units to be arrived at my place in every week which helped me to overcome challenges related to stock out cost but this time, I was overburdened with holding cost due to which I lost the game again. Next time, I kept on placing orders keeping in view my ending inventory levels and replenishment period. Since incoming order was unknown and difficult to predict, however playing many times, I got little bit idea of incoming order and started placing bigger orders in first two week period , then up to 8 to 10 week period one or two units greater than incoming order and then placed orders equal to incoming orders from week 11 to week 16, then increased orders by one or two units of incoming order in next 3 to 4 weeks and then placed less orders from week 20 to 26 than incoming order and then placed orders equal to incoming orders till week 30 and in last 6 week orders I placed orders keeping in view my ending inventory and incoming orders. Repeating this process a bit up and down multiple times, I was able to reduce bullwhip effect finally and won the game too.
Role of manufacturer was most difficult while handling inventory at its level. Since it was unpredictable when how many incoming orders will come every week, issue of holding extra inventory came into force every time I played as manufacturer in the game. Sometimes incoming order was very low and even zero and sometimes incoming order tends to reach upto 20 orders creating a dilemma in placing orders from my side. Since manufacturer is last participant in supply chain system and even switching on visibility mode and getting to know exact number of units ordered by customers, it was difficult to make adequate forecast on number of units to be ordered every week in order to reduce holding cost. When I reduced number of units ordered playing again, I was burdened with stock out cost. So managing an adequate inventory at manufacturer level to reduce holding and stock out cost was very difficult to achieve. Hence from my point of view, it was manufacturer where managing inventory was toughest task. I played multiple times as manufacturer applying all my logics and reasoning to win but lost every time. I adopted multiple strategies such as less units ordered in beginning weeks, more units in middle weeks, units equal to incoming orders in later weeks and mingled this strategy here and there but still not able to win the game and contributed to bullwhip effect.
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Getting real time information on actual demand from customers is utmost important to plan and forecast demand of products to counter bullwhip effect and reduce holding as well as stock out cost. All Participants of supply chain system should be integrated on a common platform using ERP system to have adequate information of stocks available with each participant and actual demand coming from customer side so as to build safety stock in order to cope up with contingencies and bullwhip effect as arisen during Covid 19 pandemic situation. Information on Replenishment period is utmost important in countering bullwhip impact. So it is very necessary to know exact location and geographies of participants of supply chain system so as to avoid delays in shipment and transportation. A good and healthy relation and effective communication among all participants on sharing real time information on demand forecasting, inventory and shipment information will help to carve out bullwhip effect in supply chain system. Implementation of Collaborative forecasting system in supply chain will help to supervise stock Keeping units and sales status on real time basis and predict demand more adequately and with more visibility. Supply chain performance can be improved by sharing forecasting information such as sales and inventory data, planned orders and promotion information by all participants of supply chain system. Overall, real time information on actual flow of demand from customers for which retailers play an important role, replenishment period, collaboration of participants’ data on inventory planning and demand forecasting, building up of safety stock, implementation of ERP system to gather real time information related to inventory available with participants and collaborative forecasting system are major tools in relation to gathering information and intelligence that will help not only to reduce bullwhip effect but also fulfill customers’ needs and increase profitability.
