Author: Shorthand
Date: 2005-12-18 21:18
Mark,
There is a game they make MBA's play in pretty much every intro to operations class taught. Its called the beer game. No actual beer is involved, but instead it simulates the over-long beer supply chain.
As many of you know, post prohibition, beer companies aren't allowed to distribute to retail their own products. Instead there are licensed distributors with exclusive terrorties (and much of the power). Communication up and down the supply chain is somewhat limited by law.
Demand is steady, but notches up ~20% at one point early in the game.
Inevitably, even if you have a room full of supply chain experts, you get all kinds of surges and they get worse the further up the chain you go. Its called the bullwhip effect and is pretty much inevitable if there is delay in communication/inventory anywhere in the supply chain.
The problems WWBW are having are unavoidable even with the best inventory management system. There is little surge capacity from most of the manufacturers, and because much of the stuff is international, there are enormous shipping delays, especially if you're waiting to fill a container.
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