The Supply Chain Management is derived from the beer game which is an education game invented by the Massachusetts Institute of Technology (MIT) to experience typical coordination problems of the supply chain process. It reflects a role-play simulation where several participants play with each other.

 

The game represents a supply chain with a non-coordinated process where problems arise due to lack of information sharing. It outlines the importance of information sharing, supply chain management and collaboration throughout a supply chain process. Due to lack of information, suppliers, manufacturers, sales people and customers often have an incomplete understanding of what the real demand of an order is. The most interesting part of the game is that each group has no control over another part of the supply chain. Each group can highly influence the entire supply chain by ordering too much or too little which can lead to a bullwhip effect. Therefore, the order taking of a group also highly depends on decisions of the other groups.

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It is proved that basic but important principles, and concepts in supply chain management can be universally applied to many areas of business. The game can test the learner’s human nature of response and what strategies will be adopted to solve problems and disputes under certain events or business problems.