Beer Distribution Game

You will be playing the role of a retailer within a supply chain that delivers beer from a brewery via a distributor, a wholesaler, and retailer to the end customer. You will play the game two times and compare your results.

Beer Distribution Game

You will be playing the role of a retailer within a supply chain that delivers beer from a brewery via a distributor, a wholesaler, and retailer to the end customer.

Introduction

Supply Chain Management is an integrated discipline that covers the strategy, execution and management of all the resources and processes involved in the manufacture and distribution of products / services to the end customer. In a supply chain job, you could be involved in everything from the acquisition raw materials, to designing the optimal manufacturing process, ensuring quality and timely delivery to the users.

The Challenge

You will imagine you have a job as a retail Manager. As the newly recruited Retail Manager, you are taking over the operations of an existing supply chain. You will need to ensure that you are balancing the production with the market demand. If you do well in the 6 month probation period, you get a permanent job and a pay increase

Understand how your virtual Supply Chain works

To understand the challenge of managing a supply chain, let's take a more detailed look at its structure - the supply chain leads from the brewery, via a distributor and wholesaler to the reseller, who sells beer to their customers, the end consumers. The objective of the game is to ensure that the consumers' demand for beer can be met directly or at least with as small a delay as possible while keeping each player's inventory as small as possible.

Initially, customer demand for beer is stable at 100 units per week and the entire supply chain is in a steady state. Each member of the supply chain has an inventory of 400 units.

Rules

The rules of the game are simple - in every round each player performs the following four steps:

1. Check deliveries. Check how many units of beer are being delivered to him from his supplier in the supply chain
2. Check incoming orders. Check how many units of beer his client in the supply chain has ordered.
3. Deliver beer. Deliver as much beer as he can to satisfy the customers' demand (Note: in our implementation of the game above, this step is performed for you automatically).
4. Place outgoing order. The difficult step is to decide how many units of beer the player needs from his supplier to keep his inventory stocked up and to ensure he has enough beer to meet future demands.

Objectives

• There are a maximum of 24 attempts (each attempt representing 1 week) to achieve equilibrium i.e. the chain is capable of running in an auto-pilot mode.
• Keep you inventory steady: You need to keep your inventory steady to ensure you can deal with fluctuations in demand. Try to reach an inventory target of 250 by the end of the game.
• Keep your cost down. Both excess inventory and back orders increase your cost. Keep your total cost below $8,300.00.
• Keep you overall cost down: Excessive order behavior on your part will lead to shock in the supply chain, which increase overall supply chain cost. Ensure that the total cost of the supply chain remains below $29, 300.

Some Pitfalls to be Aware of

There are three pitfalls in the beer game that you need to be aware of:

• Delays. Because of the nature of supply chains, the players' demands for beer may not be fulfilled immediately -their supplier may also not have enough inventory and will then have to pass is own order up the supply chain. There is a delay of at least one week in each direction, i.e. a changed order will not be delivered for at least two weeks, even if there is enough stock in the suppliers' inventory.
• Inventory Costs. If you order too many units of beer, your inventory costs will rise, because you will need more people to handle the beer and more storage space. Each unit of beer has an associated inventory cost of $0.5 per week. Because you cannot downsize your storage space to zero, the minimum inventory cost is always $200, even if your inventory goes down to zero. Hence the target level of beer units in your inventory is 400 units, you should try to reach 250 units by the end of the game.
• Backorder Costs. If you order too few units of beer, you may not be able to meet your customer demand for beer. Backorders are also penalized, each unit of beer on backorder cost $1 per week. Hence the target is to keep the backorder at 0.

General objectives of the game

• There are a maximum of 24 attempts (each attempt representing 1 week) to achieve equilibrium i.e. the chain is capable of running in an auto-pilot mode.
• Each week the manager will have to make one decision. How many units to produce?
• While moving through the supply chain, there's a time delay of 1 week e.g. it takes 1 week for your vendors to deliver the raw material (procurement), another week for the brewing process (work in progress), and another one to move the finished goods to the retailers (inventory).
• If there is enough quantity in the inventory, the relevant number of units are shipped out to the customers. If not, the backlog of orders keeps piling up and needs to be satiated in the subsequent weeks.
• If any of this isn't entirely clear, don't worry. Start the online game and you'll soon get the hang of what's happening.

Step by step directions to follow:

1. Go to https://beergame.transentis.com/

2. On the main website, click on Start Playing and then Single Player

3. The webpage will flip and you will begin submitting your orders in the box at the bottom of the page. Make sure you click the order button to submit your orders.

Once finished the 'Performance Appraisal' will open with statistics of the decisions taken and how that affected the demand fulfillment, customer orders, backlog, inventory and production.

Steps:

• Step 1: Review the Status- Check out the total demand (calculated as New Customer Orders + Backlog) and see if there's enough quantity in the inventory to satisfy the demand. Also, check the status of the goods in transit.
• Step 2: Enter production quantity- Based on the previous step, decide on how much you need to produce. Type the quantity you decide in the 'Produce' box. Keep in mind the delays that'll happen before the products can reach the inventory.
• Step 3: Submit the decision- Click 'Display Results' at the bottom of the page to submit your produce request. The supply chain logic works behind the scenes to process your request and display the updated status for the next week.
• Repeat the process 26 times. Eventually you will achieve equilibrium (Success!) or your probation period will end (Failure!).
• Step 4: View Results- The final screen will show you an analysis of how you performed. You'll also learn the basic theory at work, so you can pull up your socks and try to do a better job in the next attempt. The objective is to reach an equilibrium between the Demand and the Inventory
• Step 5: Screenshot "Your Performance Appraisal "and paste into the attached Activity Sheet under Attempt 1. You will have 4 screenshots-Order Behavior, Your Surplus, Your Cost, and Total Cost.
• Step 6: Answer question 1-3 on the Activity Sheet
• Step 7: Play the game a second time.
• Step 8:Screenshot "Your Performance Appraisal "and paste into the attached Activity Sheet under Attempt 2. You will have 4 screenshots-Order Behavior, Your Surplus, Your Cost, and Total Cost.
• Step 10: Answer question 2 on the Activity Sheet.