Train yourself to defeat the Bullwhip Effect in a virtual Supply Chain simulation
Every year, the bullwhip effect causes companies around the world to lose millions of dollars because of excess inventory and lost sales opportunities. The Beer Game helps you learn how to defeat the bullwhip effect in the safe environment of a virtual simulation. The game educates players in preventing excess inventory and losing sales when they encounter the bullwhip effect in real life!
How to play The Beer Game
Our Beer Game is a virtual simulation that closely mimics the original Beer distribution game developed by MIT Professor Jay Forrester in the 1960s. This original game was created to illustrate the dynamics of Supply Chains. Like the original, the game has four players – the beer retailer, the wholesaler, the distributor, and the manufacturer. The game lasts up to an hour and simulates a maximum of 52 consecutive weeks in the life of the beer distribution supply chain.
The game is available in single-player and multiplayer formats. In the single-player format, you play the role of the distributor, with the other three roles played by AI bots. In the multi-player format, between one and four players can play. If there are less than four human players, the remaining slots are taken up by AI bots.
Each week, the retailer places an order to wholesaler and receives previously ordered beer from the wholesaler. The wholesaler does the same with the distributor and the distributor with the manufacturer. Regardless of which role you play, your goal is to avoid running out of beer stock, while keeping inventory costs down. You must also try to bring the supply chain to equilibrium as quickly as possible. Equilibrium is achieved when each player reaches the target stock level and is ordering the same amount of beer each week, for four consecutive weeks.
The Bullwhip Effect
Although the beer game was developed in the 1960s, the terms ‘Bullwhip effect’ was first coined by Procter & Gamble in 1990, to describe the phenomenon we observe in the beer game. Procter & Gamble noticed that the orders for diapers they received from distributors and wholesalers fluctuate a lot, even when the demand for diapers from babies hardly changed at all. When you play the Beer Game, you are likely to experience something very similar!