University of

Greenwich

ASSIGNMENT SUBMISSION COVER SHEET

SUBJECT CODE : BUSI 1150

SUBJECT TITLE : E-LOGISTICS & INTERNATIONAL

SUPPLY CHAIN MANAGEMENT

PROGRAMME : MBA UOG International Business

UOG ID : 000920817

PORTFOLIO : Part 1 Reflective Report

LECTURERS NAME : Mr Sugendran

LEARNING CENTRE : SEGi COLLEGE KUALA LUMPUR

SUBMISSION DATE : 14/05/2017

University of Greenwich Reflective Report BUSI 1150

Table of Contents
1 Introduction .............................................................................................................. 2
2 Playing the Beer Game ............................................................................................ 2
3 Recap of the Game .................................................................................................. 2
4 Computer Game....................................................................................................... 3
5 Recap of the Computer Game.................................................................................. 6
6 Supply Chain Management ...................................................................................... 7
7 Bullwhip Effect.......................................................................................................... 7
8 Conclusion ............................................................................................................... 9
9 References............................................................................................................. 10

Table of Figures
Figure 1 Beer Game (Bean, 2009) .................................................................................. 3
Figure 2 The Bullwhip Effect (A.T. Kearney, 2000) .......................................................... 7

Table of Graphs
Graph 1 New Customer Orders (Bean, 2009).................................................................. 4
Graph 2 Total Customer Orders (Bean, 2009) ................................................................. 4
Graph 3 Lost Orders (Bean, 2009) .................................................................................. 5
Graph 4 inventory (Bean, 2009) ...................................................................................... 5
Graph 5 Shipments (Bean, 2009) .................................................................................... 6
Graph 6 Orders (A.T. Kearney, 2000) ............................................................................. 8
Graph 7 Inventory (A.T. Kearney, 2000) .......................................................................... 8

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1 Introduction

The beer game is a logistics game and was originally invented by Jay Forrester in the
early 1960s at Massachusetts Institute of Technology (MIT) Sloan School of
Management. The initial purpose of this simulation game is to study the effectiveness
system structures and behaviours of the people (structure creates behaviour). The
demonstration of this game is beneficial with information sharing that is a great
advantage in supply chain management study. Over the decades, this beer game has
been developed in many version. Today, this simulation game has become very
common in the education industry as a teaching material for the students to have a
better understand in Supply Chain Management (Riemer, 2012).

2 Playing the Beer Game

According to the portfolio requirement, each individual were required to participate on this
game to have a greater knowledge and understanding on of supply chain. During this
period, the player will go through on every character in the supply chain such as
Manufacturer, Wholesaler, Distributor and Retailer.
The main objective of this game is to cut down the cost established by an inventory and
eliminate backlog. The cost of reduction was responsible by the individual and will be
incurred by the appointed company but not the entire supply chain. In this simulation game,
the only way to communicate is by placing raw material orders through the usage of
numbers while other methods are restricted.

3 Recap of the Game

By selecting Novice mode on the simulation game. The customer will increase their
order in the second week from 10 cases to 15 cases of beer. We have 50 weeks to
accomplish the mission to equilibrium the system. With the period of time given together
with the finite knowledge of Supply Chain Management, this will create problems to the
individual as to establish a successful approach. The game was completed with an
astonishing result due to the inconsistency of orders that was placed with the ranged
from x to x units.

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4 Computer Game

Figure 1 Beer Game (Bean, 2009)

Referring to the Figure 1 above is computer version of the beer game that was given by
the university as shown in this website http://forio.com/simulate/mbean/near-beer-
game/simulation/#p=page0l to justify the theories that had been previously developed.
The simplification of this simulation beer game will allowed the user to have a better
understanding of the supply chain as it is much foreseeable than the intelligence of human.
After completing this simulation game, the individual will have a better feasibility to
establish an action plan that would defeat the predicted challenges, for example ordering
more raw materials at the early stage of this game will reduce or eliminate the backlog
later on in this beer game.

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New Customer Orders

Graph 1 New Customer Orders (Bean, 2009)

Total Customer Orders

Graph 2 Total Customer Orders (Bean, 2009)

Blue: Total Customer Orders Red: Cumulative Unfilled Orders

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Lost Orders

Graph 3 Lost Orders (Bean, 2009)

Blue: Cancelled Unfilled Orders Red: Lost Orders

Total Inventories

Graph 4 inventory (Bean, 2009)

Blue: Work In Process Red: Finished Goods Inventory

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Shipments

Graph 5 Shipments (Bean, 2009)

Blue: Shipment Red: Total Customer Orders

5 Recap of the Computer Game

With the graph shown above, it has proven that the simulation computer beer game is
directly related to the supply chain management. The graphs generated from the
simulation beer game are described in the following sentences.
The orders from the customer will only increase once in this entire game and will
remains the orders until the end of the game.
The combination of Cumulative Unfilled Orders and New Order from Customers are the
Total Orders from Customers.
The amount of the items ordered by the supplier were shown in the inventories graph
and the size of order will affects by the inventory.
The delay of the shipment was mainly due to the supply chain. From the Shipments
Graph, it clearly shown the time differences of the numbers of orders and shipments.

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6 Supply Chain Management

Supply Chain Management is the process of managing the activities of the supply chain
to maximise the customer value and also to achieve a continuous competitive
advantage. In order for the supply chains to operate smoothly, it require a mindful effort
of a supply chai firm to manage the operation. The main activities of the supply chain is
to cover from top to bottom such as sourcing production, product development, logistics
and the uses of information systems to coordinate the activities are necessary. Bullwhip
effect is causes of insufficient information and false interpretation of the order which will
cause serious problems. With the sufficient of information, it will help the companies to
have a better plan in the overall distribution and production. The effectiveness of the
entire supply chain will enhance the company in cost saving together with a better
looking of the final product that will increase the sales of the companies to have a better
outcome (SCRC Staff, 2017).

7 Bullwhip Effect

Bullwhip Effect is a common distribution channel phenomenon effect in the supply chain
which also can be known as Whiplash Effect. It is arduous to have an excellent demand
from the customer in order to have a stable arrange in their inventory and other resource.
The company needed to forecast demand to achieve stable customer demand.
Sometimes, the company might have an error on their inventory buffer (safety stock) due
to the lack of knowledge in forecasting the political influences, ecological and statistics
data.

Figure 2 The Bullwhip Effect (A.T. Kearney, 2000)

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Graph 6 Orders (A.T. Kearney, 2000)

Graph 7 Inventory (A.T. Kearney, 2000)

When there is an increase of Bullwhip Effect from the customer to the manufacturer, this
will cause a huge impact on the inventory buffer (safety stock) in the Supply Chain of the
company. The effect of the demand in the supply chain will be affected due to the increase
or decrease of the customer demand which causes the company to raise their orders or
reduce their inventory. Referring to the above graph 6 and 7 shows the example of
inventory of the supplier were influences by the orders from the customer demand and
this created the Bullwhip Effect. This effect will make a big difference depending on the
size and orders of the Supply Chain.

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8 Conclusion

The Beer Game is a powerful tool used to provide an understanding of how Supply Chain
Management can be implemented. It provides awareness of the possible impact that may
occur such as the Bullwhip Effect.
Through good communication with the companies in the Supply Chain as well as a
thorough knowledge of the companies help to improve the management of the company
to develop successful strategies for better customer service and reduce the inventory and
dangerous backlogs. Furthermore, through the use of good Supply Chain Management
market shares can be gained.

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9 References

1. A.T. Kearney, 2000. The Beer Distribution Game. [Online]

Available at: https://www.atkearney.com/web/beer-distribution-game/home
[Accessed 30 April 2017].
2. Bean, M., 2009. The Near Beer Game. [Online]
Available at: http://forio.com/simulate/mbean/near-beer-game
[Accessed 22 April 2017].
3. Riemer, D. K., 2012. The Beergame Portal. [Online]
Available at: http://www.beergame.org/
[Accessed 10 April 2017].
4. SCRC Staff, 2017. What is Supply Chain Management (SCM)?. [Online]
Available at: https://scm.ncsu.edu/scm-articles/article/what-is-supply-chain-
management
[Accessed 29 April 2017].

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