New business sim: 'Root Beer Game' Supply Chain Management Simulation

Our fifth Harvard Business Publishing business simulation is the Root Beer Game Supply Chain Management simulation (see earlier posts for descriptions of our Pricing, Leadership, Operations Management , and Strategic Innovation simulations).  Based on the classic "Beer Game" production-distribution board game simulation developed at MIT in the 1960s, this team-based simulation illustrates how oscillations develop in a supply chain and how variability increases as one travels up the chain--a dynamic known as the "bullwhip effect." The simulation portrays a typical supply chain and each team consists of 4 links in the chain: retailer, wholesaler, distributor, and factory.

To quickly recap the product design of these web-based simulations, they are meant to be topical in nature within a single discipline so that faculty might use them to focus learning on some key objectives.  They are also designed to be extremely usable from both the user and administrator perspectives.  They are designed to be played and debriefed all within 2-3 hours, depending on the complexity of the configuration chosen by the administrator. More information on our our thoughts about simulation design and effectiveness can be found elsewhere on this blog -- click on the "simulations and games" category on the home page.

Development Model & Simulation Authors

The development model includes a three-pronged approach:

• Our Harvard Business Publishing product development team serves as the product authority and contributes project management and product line design.
• Our simulation partners at Forio Business Simulations provide their Broadcast simulation platform (a feature-rich, web-based platform) as well as system dynamics modeling and business consulting experience.
• Harvard Business Publishing selects faculty authors to serve as subject matter experts and content authorities.

In this instance we did not need to contract a specific faculty author.  Will Glass-Husain and Michael Bean from Forio both hail from MIT and the simulation engine they have developed (and on which we build our simulations) is based on System Dynamics principles originally developed at MIT's Sloan School of Management.  The System Dynamics program was created by MIT Professor Jay Forrester who also invented the original Beer Game.  So Will was our subject matter expert and project lead. The core design and development team also included Heide Abelli and Nicole Harris of Harvard Business Publishing.

Many online versions of the game exist, even several free versions, but most have some severe limitations.  Many are single-player versions only which limits the true power of the game.  Others require user installations or are otherwise difficult to play.  Many have poor graphics and little support material.  And most are not available for use by others in way that is supported and scalable. Our goal was to create the most fully-featured, flexible, and powerful web-based version of the game.

Simulation Synopsis

From the Facilitator's Guide:

Modeled after the classic Beer Game developed at MIT in the 1960s, the Root Beer Game provides students with a first-hand account of the inherent challenges in supply chain management.  Students play one of four roles in a root beer supply chain: Factory, Distributor, Wholesaler, or Retailer; each week they need to place their root beer orders from their direct supplier based on their current inventory level and their (estimated) demand from the next node on the chain.   All players have a common goal: minimizing costs tied up in carrying unnecessary inventory—which could put you out of business— yet avoiding the costs of inventory shortages, which could put you out of business as well, if customers decide to go elsewhere. Limited communication and visibility along the chain, combined with shipping delays, cascade quickly into severe shortages or overstocks, despite customer demand remaining virtually steady throughout the game. 

Learning Objectives

A comprehensive Teaching Note covers how to use the simulation to realize the main learning objectives:

1.    llustrates the main factors which contribute to the bullwhip effect in a supply chain:
•    Demand forecasting and standard forecast smoothing techniques
•    Lead time impact on supply chain
•    Impact of batch ordering on the wholesaler
•    Magnifying effects of inflated orders on the bullwhip phenomenon
•    How  centralized information mitigates the bullwhip effect

2.    Explores  techniques for controlling the bullwhip effect
•    Reducing uncertainty—providing centralized information about demand
•    Reducing variability – i.e., by discouraging price promotions
•    Reducing lead time  
•    Establishing strategic partnerships—particularly those involving information-sharing

3.    Covers the elements of effective forecasting
Although not explored in detail in our simulation's Teaching Note, the Root Beer Game is also an excellent introduction to the principles of Systems Thinking and System Dynamics.  An important conclusion from this field is that the long-term functioning of a system depends as much on the behavior of people (how their decision-making affects processes) as the system’s physical or virtual infrastructure (standard time lags between processes). 

For more information on the Beer Game:

• "Teaching Takes Off: Flight Simulators for Management Education" -- PDF of 1992 article by MIT's John Sterman. 
• The Fifth Discipline: The Art & Practice of the Learning Organization -- there is a chapter in this seminal book by Peter Senge that explores how the game effectively reveals the influence of system structures on behavior.
• The board version of the game is still available from the System Dynamics Society.  Harvard Business School Professor Jan Hammond also has produced a note on using the board version.
• John Sterman's online bibliography of the use and research aspects of the game.

Simulation Design

This simulation is designed to provide an engaging, experiential learning environment for students.  The basic architecture includes:

•  a Prepare section which is used once and optionally referred to later by players (and players can be restricted to this section only until an administrator ‘opens’ the full simulation to students);
•  an Analyze section that provides users with current information that they must peruse in order to make effective decisions and advance the simulation.

Sample screenshots:

The Prepare Tab: Your Role screen.  The Prepare section gives students all the information they need to prepare for the simulation.  Faculty can choose to restrict players to this section if they want to assign the preparation as homework but not have students start to actually play the sim.

The Analyze Tab: Main Dashboard - top.  The visual layout at the top of the screen shows players the current status.  They can optionally enable an animation that shows that week's order processing as it flows in and out from their upstream and downstream supply chain nodes.

 
The Analyze Tab: Main Dashboard - bottom.  Here users can see a tabular view of historical data and export it to Excel.

The Analyze Tab: Sample detail screen.

Simulation Sampling

Educators can sample the simulation as detailed below.  Some access is only provided to qualified educators and trainers who contact HBP Customer Service as noted.  The full Facilitator's Guide with Teaching Note is available to qualified educators and trainers.

Video overview

• This 11.5 minute overview video explains the simulation from the student’s perspective as well as the administrator's. It uses voice-over and animated screenshots to step users through the simulation.

Student Experience Login

• http://forio.com/simulation/harvard-root-beer-game-demo/
• username/password: you can choose to login as any of the 4 roles.  Role titles serve as both username and password -- retailer/retailer, wholesaler/wholesaler, distributor/distributor, factory/factory
• This will place you into a sample simulation where you can navigate the Prepare and Analyze tabs.  You will not, however, be allowed to enter decisions or advance the simulation.

Administrator Login

• To experience the simulation as an administrator, contact HBP Customer Service:  1-800-545-7685 (outside the U.S. and Canada, 1-617-783-7600) to purchase or request educator access to the simulation:  'Root Beer Game' Supply Chain Management simulation #3101

Comments

[Denis]

See write-up by a customer of the sim here: http://gotboondoggle.blogspot.com/2009/04/root-beer-game.html