The Beer Game With most aspects of life it is frequently the failures, as opposed to successes, from which we learn the most indelible lessons. With this approach in mind, The Beer Game to a large extent serves as the very antithesis of a properly functioning supply chain. In other words, the exercise demonstrates how NOT to manage a logistic operation. Hopefully, an examination of the pitfalls and shortcomings of a worst case scenario and avoiding the same types of mistakes will lend insight how to correctly manage a supply chain. What otherwise appears as a simple classroom exercise actually represents a powerful training tool with enduring lessons directly transferable to real world application. Quickly becoming apparent after only a few rounds of play was in the absence of coordinating direction the individual supply chain links immediately focused upon acting in their own best interests much more so than the organization as a whole. Whether the end use customer was satisfied became secondary to avoiding stock outages for the next link in the chain, or their specific “upstream customer”. The real world application of this example is that focus on the end use customer must be consistent and maintained throughout the process up to and including delivery. Undoubtedly internal customers, such as retailers to wholesalers and distributors to production, must be serviced along the way for the transaction to ultimately occur. However, unless an end use customer is involved no profit can be realized by anyone. Another lesson of the game materialized gradually at first, but steadily became more and more evident with each round of play. This lesson was the demonstration of the overwhelming ineffectiveness and utter futility of approaching logistics from the position of total ignorance. With no forecast or sales history to serve as a guide or predictive tool, the participating supply elements simply had nothing to base their projected order quantities upon other than pure conjecture. Operating in a vacuum relative to the other players of the supply chain was nothing less than counterproductive. Closely related was the development of a subdued, but underlying, sense of hostility within the supply chain as orders were placed that didn’t correspond with anticipated amounts. When this type of communication breakdown exists in the real world, an irritation between supply elements invariably manifests itself. Additionally, the resulting waste of time, material, storing of inventory and other resources expenses further fuel the fires of frustration and discord between supply elements.
The cooperative game theory comes in picture when more than two players in the supply chain come together and form alliances to harness maxim...
It is important to identify the customer facing processes and use the demand chain with the supply chain in order to focus on the entire value chain for both the customer and the stakeholder (Walters & Rainbird, 2007). Understanding your customers and markets can help you determine where to look in the supply chain for efficiencies and opportunities and areas where you can improve. Therefore, the focus is primarily on customer’s product demands and service, quality, price competitive, while increasing performance and adding value. Target uses EDI software to make procurement easier and requires all suppliers to use EDI for the procurement process allowing them to ensure customer satisfaction by having state of the art technology that’s fast and
Throughout the many years, college students have engaged in many activities to either entertain themselves or pass endless time. These activities have ranged from sports, either intramural or varsity, to various clubs and organizations devoted to students personal interests. While these have sparked interest and lasted a long time, none has exceeded the expectations of the wonderful game of beer pong.
Optimal supply chain performance requires the execution of a precise set of actions that are not always in the interest of the individual supply chain members, who are most often interested in only optimizing their own objectives (Cachon et al. (2003)). Optimal supply chain performance can be achieved if firms coordinate by contracting on a set of transfer payments that are design to align each firm's objective to the supply chain objective. This mechanism is termed decentralized supply chain co-ordination using contracts.
This is a game to play while doing other things at a party. To play the
Happy Chips, Inc. is faced with a serious problem, with only one mass merchandise customer called “Buy 4 Less” being unhappy with the company’s operating performance. Buy 4 Less had several problems cited, including frequent stock outs, poor customer service responsiveness, and high prices for the products being supplied. Buy 4 Less came up with solutions they think seem fit to fix the problems they found with Happy Chips, Inc. and if Happy Chips, Inc. wishes to remain a supplier to their company, they will have to incorporate these changes. The problem, however, with this scenario, is that employees of Happy Chip, Inc. are not happy with the demands Buy 4 Less has bestowed upon them, which include providing direct store delivery four times a week instead of three, installing an automated order inquiry system to increase customer service responsiveness, and decreasing product prices by 5%. Even though the easiest thing for Happy Chips, Inc. to do is to agree to the changes Buy 4 Less wants them to do, Wendell Worthmann, the manager of logistics cost analysis, doesn’t agree to the changes right away.
The Beer Game simulates the flow of supply chain management that occurs in the real world. While playing the practice round Beer Game and the two rounds with a group, the “bullwhip effect” was a clear malfunction in our supply chain. As backlog started to accumulate and an exponential amount of inventory began to pile up, it was evident we were affected by the bullwhip effect. The bullwhip effect is describes to be the increasing variation of demand going upstream the supply chain from consumers to suppliers. Coordination between the manufactures, wholesaler, distributor and retailer was key to playing a successful round. However, by not communicating with one another and not understanding the demand that exists, increase of costs and backlogs begin to spiral out of control. Each player controls their particular section in the supply chain, though, each player can influence the supply chain as a whole by not ordering enough or perhaps ordering too much. It was obvious that the decisions made by each player was impacting the performance of the other in the chain. We found that the longer the lead time, the larger the variation. This extended lead time impacts the manufacture to worry, and then causes them to increase their production in order to meet their forecasting predictions. Their forecasting predictions are then a result of assumptions that never really existed in the first place. As playing the role of the Retailer, I was unable to meet the consistent demands of consumers. The bullwhip effect was noticed as my level of inventory increased to over 111, and shooting up my costs to over $2,400. Thus, it was clear and obvious that every division in the supply chain plays a key role. It ultimately became a domino effect w...
The furniture company Somerset needs to retain its customer service record and remedy any of its global supply chain issues before it has an adverse effect on the brand and start losing customers. With a frequent change in the product catalog, keeping an excessive inventory will cut its profit and some of the product may become obsolete even before the furniture hits the retail outlet stores. In order to achieve profit and success, business employee many strategies and the supply chain strategy are one of the operational management techniques that use analytical decision making process to achieve the company goals and provide tools to effectively compete in the market (Taylor and Russell, 2014).
It is simple to see logistic and supply chain networks in action such as warehouses storing, shipment transporting products and customers consuming those products and services. This is determined by how the management of the company plans its upcoming activities and transforms their inputs into outputs efficiently to the global market. Therefore, this is no exception for a high-end automotive component, industrial products and automotive manufacturer like BOSCH, Canada. This report will outline the supply chain flow and purchase in BOSCH Canada. However, there are several challenges such as failing to manage inventory well and the inaccuracy of demand forecast faced by the company. Therefore, several recommendations are discussed within this report in order to expand the business widely.
Kersten, W., & Bemeleit, B. (2006). Managing risks in supply chains: How to build reliable collaboration in logistics. Berlin: Erich Schmidt.
...re replacement or substitute goods from other sources. Furthermore, Toyota does permit failures or delay in delivery that occur that are beyond the suppliers control such as floods, fires, explosions, riots, windstorms, or terrorism acts (Marksberry, 2012). However, suppliers are not exempt from the commitments if their employees participate in slow down, lockouts, or go on strike. Ultimately, the delivery requirements set out by Toyota may seem severe, the JIT inventory system requires a clear understanding and close coordination of each other’s intertwining networks. As such, based on this report, it can be concluded that the bargaining power of suppliers in the supply chain is weak. This is because due to the large number of suppliers, materials are widely accessible and therefore suppliers do not pose any great threat of forward integration (Marksberry, 2012).
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
OPERATION AND OPERATIONS MANAGEMENT All organizations have operations.” A manufacturing company may conduct operations in a foundry, mill, or factory. Our interest is in the management of operations, or operations management (OM), including the usual management cycle of planning, implementing, and monitoring/controlling. The driving force for OM must be an overriding goal of continually improving service to customers, where customer means the next process as well as the final, external user. § Since there is an operation element in every function of the enterprise, all people in all jobs in every department of the organization should team up for improvement of there own operations management elements. Teaming Up with Customers What happens when suppliers and customer are disconnected? Consider design work, for example. Whether we speak of goods or services, time- and distance separation in the supplier-customer connection invites trouble. Question: “What’s your Job?” Question: “But isn’t your job to serve the customer?” In grocery stores, where the supplier-relationship is immediate, the operations manager system is hard pressed to maintain a customer focus. The customer is the next process, or where the work goes next. A buyer’s customer is the associate in the department to whom the purchased item goes; a cost accountant’s customer is the manager who uses the accounting operations-where the design will be produced or the service provided. It is also clear that throughout the organization, people not only have customers, they are customers. Let’s turn our attention to what customers want. A Short List of Basic Customer Wants The requirement is a recipient’s or customer’s view of a good or service. A close partnership with the customer’s actual requirements. A close partnership with the customer helps create good specifications, increasing the supplier’s ability to fulfill the customer’s needs. What else do customers want? Customers have six requirements of their providers: High levels of quality. High levels of service. Low costs. OPERATIONS STRATEGY An organizational commitment with wide ranging effects, such as continuing improvement in meeting customer needs, is called a strategy. Strategy itself is necessary because of competition, and successful strategy ensures that company strengths match customer requirements. Integrated Business Strategy To accomplish its aims, the business team must plan strategy in all four-line functions. A comprehensive strategic business plan deals with issues affecting the whole organization: employees, markets, location, line of products and services, customers, capital and financing, profitability, competition, public image and so forth.
19. Sodhi, Sunil Chopra and ManMohan S. Managing Risk to Avoid Supply Chain Breakdown. MITSloan Management Review. [Online] October 15, 2004. [Cited: February 25, 2010.] http://sloanreview.mit.edu/the-magazine/articles/2004/fall/46109/managing-risk-to-avoid-supplychain-breakdown/.
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.