Impacts of SCM order strategies evaluated by simulation-based 'Beer Game' approach: the model, concept, and initial experiences

Collaboration in supply chain networks has been one of the major fields of work in global logistics since the late 1990s. The concept of Supply Chain Management is thus emerging as the main focus of research and education at universities as well as in industry. However, the crucial hurdle when starting a logistics partnership with several partners is creation of the necessary common understanding of the inter-company relations and interdependencies in logistics systems, whether for mere single customer order fulfilment or even integrated collaborative planning processes. The 'Beer Game,' a training exercise developed at MIT in the early 1960s, offers an easy-to-use tool for creating a common awareness of the fundamental issues in a supply chain. One of the great benefits as well as one of the pitfalls of the original Beer Game is its very simplicity. Mostly only the 'Bullwhip Effect' can be demonstrated, while the effects of supply chain optimization strategies and the possible impacts of new strategies cannot be shown. For this reason, the idea of simultaneously playing the game using simulation software was conceived. Various supply chain scenarios, modelled and applied in simulation software, will be presented. In summary, the paper gives an overview of the model, the approach, and experience gained in using the simulation model in training sessions.