Beer Distribution Game
Encyclopedia
The Beer Distribution Game (The Beer Game) is a simulation game created by a group of professors at MIT Sloan School of Management
in early 1960s to demonstrate a number of key principles of supply chain management
. The game is played by teams of at least four players, often in heated competition, and takes from one to one and a half hours to complete. A debriefing session of roughly equivalent length typically follows to review the results of each team and discuss the lessons involved.
The purpose of the game is to meet customer demand for cases of beer
through a multi-stage supply chain
with minimal expenditure on back orders and inventory. Players can see each other's inventory but only one player sees actual customer demand. Verbal communication between players is against the rules so feelings of confusion and disappointment are common. Players look to one another within their supply chain frantically trying to figure out where things are going wrong. Most of the players feel frustrated because they are not getting the results they want. Players wonder whether someone in their team did not understand the game or assume customer demand is following a very erratic pattern as backlogs mount and/or massive inventories accumulate. During the debriefing, it is explained that these feelings are common and that reactions based on these feelings within supply chains create the bullwhip effect
.
Non computer-based kits for running Beer Game Sessions:
MIT Sloan School of Management
The MIT Sloan School of Management is the business school of the Massachusetts Institute of Technology, in Cambridge, Massachusetts....
in early 1960s to demonstrate a number of key principles of supply chain management
Supply chain management
Supply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers...
. The game is played by teams of at least four players, often in heated competition, and takes from one to one and a half hours to complete. A debriefing session of roughly equivalent length typically follows to review the results of each team and discuss the lessons involved.
The purpose of the game is to meet customer demand for cases of beer
Beer
Beer is the world's most widely consumed andprobably oldest alcoholic beverage; it is the third most popular drink overall, after water and tea. It is produced by the brewing and fermentation of sugars, mainly derived from malted cereal grains, most commonly malted barley and malted wheat...
through a multi-stage supply chain
Supply chain
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
with minimal expenditure on back orders and inventory. Players can see each other's inventory but only one player sees actual customer demand. Verbal communication between players is against the rules so feelings of confusion and disappointment are common. Players look to one another within their supply chain frantically trying to figure out where things are going wrong. Most of the players feel frustrated because they are not getting the results they want. Players wonder whether someone in their team did not understand the game or assume customer demand is following a very erratic pattern as backlogs mount and/or massive inventories accumulate. During the debriefing, it is explained that these feelings are common and that reactions based on these feelings within supply chains create the bullwhip effect
Bullwhip effect
The Bullwhip Effect is an observed phenomenon in forecast-driven distribution channels. It refers to a trend of larger and larger swings in inventory in response to changes in demand, as one looks at firms further back in the supply chain for a product...
.
External links
Computer-based tools for running Beer Game Sessions:- Online, multiplayer "root-beer" game
- The Beer Distribution Game online
- A classroom friendly online version
- Free beergame software for classroom use in higher education
- Free online, multiplayer beergame from MA-system, with the aim to maximize the supply chain net revenue
Non computer-based kits for running Beer Game Sessions: