The Beer Game is a supply chain simulation developed by MIT professors in the 1960s. It demonstrates key supply chain principles like the bullwhip effect, where small variations in demand are amplified further up the supply chain without information sharing. Players on teams move pieces around a board to determine production and inventory levels. The game highlights the importance of cross-functional communication and collaboration to avoid inefficiencies. One company, Chobani, used the Beer Game in a leadership training program where different departments experienced first-hand the issues faced in supply chains.

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The Beer Game
Bringing your team together

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What is the Beer Game?
The Beer Game is a supply chain simulation that lets the players experience the
pressures of playing a role in a production/distribution simulation to develop their
Supply Chain understanding.
The game is played via a large board game with teams of at least four players. Players move pieces around the board and
determine what they want to make or purchase and how much stock to hold, in a fun and competitive environment.

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The Beer Game was created by a group of
professors at MIT Sloan School of
Management in the early 1960s. It was
developed to demonstrate a number of
supply chain management key principles. It
introduces the players to the concept of the
“bullwhip effect” and how structure produces
behaviour.
The Beer Game Origins
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The bullwhip effect is a well-known symptom of coordination problems in (traditional)
supply chains. It refers to the trend of larger and larger swings in inventory in response
to changes in demand, the further back through the supply chain you go.
Even in the face of stable customer demand, small variations in demand at the retail/customer end tend to dramatically amplify
upstream in the supply chain when information sharing and collaboration does not exist.
As a consequence of the bullwhip effect, a range of inefficiencies occur throughout the supply chain:
 high (safety) stock levels
 poor customer service levels
 poor capacity utilisation
 aggravated problems with demand forecasting
 ultimately high cost and low levels of inter-firm trust
.
The Bullwhip Effect

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The Beer Game is a fun, interactive session which can help develop understanding
on why supply chain planning is complicated and build engagement around S&OP. It
highlights why structured, cross functional communication is important.
GRA’s experienced facilitators can increase your team’s knowledge and understanding and link the Beer Game’s learning
objectives to a broader program if required. The Beer Game can be used to:
What is the Beer Game?
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 Improve understanding on how end to end supply chains operate
 Create increased buy in for S&OP/IBP rollouts – this can work especially well for
developing non-supply chain department engagement such as Sales & Marketing
departments
 Expand your team’s overall Supply Chain knowledge and the part they play
 Increase awareness on why cross functional communication is important within
supply chains
 Develop the case for Customer & Supplier collaboration
 Improve culture and have some fun as a teambuilding exercise

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Case Study: Beer Game with Chobani
Chobani is the number one selling yoghurt brand in America and launched into the
Australian market in 2011. Chobani purchased Victorian dairy company Bead Foods
(makers of Gippsland Dairy) and built a new state-of-the-art manufacturing facility in
Dandenong South.
GRA ran the Beer Game for Chobani as part of their Leadership Development Programme. A range of different departments
including Sales, Planning, Procurement, Production, Quality and Logistics participated.
Sarah Hochholzer, People & Culture Manager at Chobani said: “It was a fun, interactive way for the team to get an overview
on how supply chains function and experience firsthand, some of the key issues supply chains face and how to overcome
them.”

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Sarah Hochholzer, People & Culture Manager, Chobani
It was a fun, interactive way for
the team to get an overview on
how supply chains function
and experience firsthand,
some of the key issues supply
chains face and how to
overcome them.
© GRA 2014
What our clients say about The Beer Game
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