The Beergame app simulates the stages of selling beer from brewer to drinker, revealing a real-world problem that can entangle the supply chain.
STEVE INSKEEP, HTE:
A new online game lets you experience the tightening of the supply chain for yourself. The Beergame app simulates the stages of beer sales – from brewer to drinker.
Darian Woods and Stacey Vanek Smith of NPR’s The Indicator discovered that this revealed a real problem.
DARIAN WOODS, BYLINE: Mathias Le Scaon created the online beer game. And it’s an adaptation of a game he played when he was studying for his master’s degree in production and logistics management.
MATHIAS THE SCAON: We played the beer game. It was on paper using only coins.
WOODS: This table game with paper and poker chips was invented by a systems scientist at MIT in the 1960s. And a typical game goes like this, either in person or in the online version of Mathias. Each actor has a different role throughout the supply chain, whether it is a retailer, wholesaler, distributor or brewer. With each turn, you only do one thing: you choose how much beer you are going to order.
STACEY VANEK SMITH, BYLINE: So that sounds reasonable. But then…
THE SCAON: When you’re in the middle of the supply chain, you get bigger and bigger orders, so you do the same with your own supplier. But it usually doesn’t respond quickly enough.
VANEK SMITH: The supplier usually doesn’t respond quickly enough. And pretty quickly you have a backlog of beer orders. So you know human nature being human nature you panic and order more beer.
WOOD: Exactly. And it’s part of a pattern that happens almost every time people sit down and play The Beergame. The further away you are from the big customer, the more volatile your orders are. This model is therefore called the boost effect.
VANEK SMITH: The whip effect – so just like the shape of a whip, the part near your hand only goes up and down very little. The ends of the whip, however – the very tip of the whip goes up and down a lot. So a small change in customer demand can mean that the factory on the other end receives, say, hundreds of orders one week and no orders the following week. And, you know, it gets really overwhelming.
WOODS: And after dealing with real-life boost effects while working for a French cosmetics company, Mathias wanted to share these lessons with the world. This is where he came up with the vision for online gambling.
VANEK SMITH: Yeah. So we at The Indicator signed up to train.
VIET LE, BYLINE: I am Viet. I’m a producer on The Indicator. And I am the retailer.
VANEK SMITH: And Viet bought his beer from our wholesaler.
KATE CONCANNON, BYLINE: I’m Kate. I am the editor of The Indicator.
WOODS: Kate got her beer from me, a distributor. And I ordered my beer from you, Stacey. You were a proud brewer.
VANEK SMITH: There is no beer without me.
WOODS: So after an optimistic forecast of more beer customers, Viet ordered a few more cases of beer, which further down the chain, Stacey, didn’t particularly satisfy you.
VANEK SMITH: I felt like I was …
VANEK SMITH: … Under a lot of pressure because I was at the end of the whiplash as a brewer. And then I didn’t want to answer too much because I was afraid of having a beer on my hands that I couldn’t sell.
WOODS: Look, I mean that’s probably what you should have done.
VANEK SMITH: (Laughs).
WOODS: Matthias says the key to, for example, avoiding the boost is to stay calm and steady. But I have to say, Stacey, finally you gave in.
VANEK SMITH: Okay. Do you know what I’m gonna do? I’ll make 600 cases of beer.
VANEK SMITH: I don’t care.
VANEK SMITH: I just – I’m done.
WOODS: And listen, I tried to comfort you, I was trying to say that, listen, this is an educational tool …
VANEK SMITH: (Laughs).
WOODS: (Laughs) And that wasn’t comforting.
VANEK SMITH: It’s not comforting.
VANEK SMITH: The sting of the whip – I still feel it.
WOODS: The sting – yeah. Well, it’s true.
VANEK SMITH: Stacey Vanek Smith, NPR News.
(SOUND EXTRACT FROM THE SONG DINOSAUR JR, “ALMOST TARIF”)
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