100 second reflection for Week 5
Think for 100 seconds, and summarize the key things that you learned in the class during Week 5:
Beer Game
Lecture about Why Supply Chain Choreography is difficult (bullwhip effect)?
MIS 3537 – Spring 2017
Think for 100 seconds, and summarize the key things that you learned in the class during Week 5:
Beer Game
Lecture about Why Supply Chain Choreography is difficult (bullwhip effect)?
The key things that I learned in todays class is how drastic the bullwhip effect can really be, which was perfectly demonstrated in the Beer Game. I found it very interesting how the farther away from the customer the supply chain gets, how much a little variation in ordering can drastically increase costs of the firm. Specifically in our beer game, by myself (retailer) increasing my orders by 10,000 orders 2 weeks in a row, it messed up my inventory levels for many weeks to come due to the 4 week delay, in which it almost doubled my backlog.
Today was a good application to learn just how the bullwhip effect works. In round 1 of the beer game today, we saw that lack of communication can make it extremely difficult to predict demand in the course of a supply chain, When there isn’t much visibility from top to bottom the different departments have a much harder time being accurate and efficient. If I as the manufacturer had known exactly what the customer demand would have been our operation would have run much smoother. When a forecast is slightly off closer to the customer demand side of the chain this is amplified each time it moves down the chain further, effectively creating the bullwhip effect. It was a good exercise to illustrate how important visibility and communication are in demand planning.
This week we learned about the bullwhip effect concept and how important it is when managing any supply chain. I think this concept was clearly represented in our first round for the beer game. The bullwhip effect can be explained as distorted information from one end of the supply chain to another, creating fluctuations in how the various entities behave. The variability of this information is what causes the bullwhip effect. A small change at the beginning of the supply chain can cause larger fluctuations down the line. I experience this when at the beginning of the beer game I did not plan for larger demand fluctuations and I ended up with a big back order number. Thankfully towards the end of the game I was able to get my back orders to zero and eliminate the bullwhip effect.
The first real round of the beer game was an uncomfortable experience for many of us at first, however it provided valuable insight into some of the struggles that real supply chains face. Accurate forecasting and inventory management is crucial to avoid inventory and backlog costs. This is where the implementation of management information systems can become very useful. Additionally, the game helped to exemplify the bullwhip effect. Issues in one level of a supply chain are exacerbated the further down the supply chain the issue travels. Once the bullwhip effect has begun, it can be difficult to remedy.
For this class we went into detail what the bullwhip effect is and how it affects the supply chain. A small change from one stage of the supply chain gets larger and larger as it makes it way down the chain. We saw this effect in the beer game as we dove into the later weeks. While some groups were effected greatly by the huge fluctuation in orders. Many groups couldn’t compensate for the large shift. Our group was one of the lower total cost groups because we didn’t fluctuate our order my a large margin. We all kept out orders between 50,000 and 150,000 so we never had a large jump. This excursus helped us understand how the bullwhip effect works and how to prevent it from throwing off the supply chain.
During the fifth week, we learned how to evaluate supply and demand, as well as how to analyze the flow of inventory. The four different departments: wholesaler, distributor, retailer, and factory as have to analyze their backlog, cumulative cost, weekly cost, total inventory, and total product needed. The lack of communication made the supply chain process much more difficult, especially since the delivery of the products took two weeks. The best way to keep costs down was to keep the lowest amount of backlog while keeping the lowest amount of inventory. This beer game allowed us to have an experience with the bullwhip effect: which is caused by lack of information, poor supply chain structure, and lack of collaboration.
In class during week 5, I learned a lot about just how much the bullwhip effect can alter a supply chain in such a short amount of time. Our group really got a chance to see this first hand. We struggled to manage it once it got going and it took us many rounds to mitigate the effects. It was really eye opening and made me think about just how damaging it could be in a real life supply chain scenario!
From week 5 class, I realized that how important collaboration is and how a little fluctuation in one part can cause a huge difference at the end. So my role as a wholesaler actually ended up with too many inventory on hand because the retailer suddenly ordered a lot and i dont have enough inventory to fulfill the order. Then the fluctuation and blacklog scared me and I started to order so many to lower my backlog. But at the end I still have so many inventory in stock which increased the total cost. In terms of collaboration and communication, I want to share my several online purchasing experiences that I placed an order on Wayfair, then i changed my mind and cancelled my order. I received an email said my order has been cancelled and it wont be charged. But a few day later I received that order in front of my door. So i guess there is a lack of communication between customer service and shipping departments, or the information system is not update simultaneously and accurate enough.
In week 5, we began the class with getting the first-hand experience of bullwhip effect through playing the beer game. Most of the teams were not prepare for the big jump in customer demand and the sudden increased in demand caused the bullwhip effect along the supply chain. The retailer in my team placed a single large order during week 11 and as a distributor, I was able to deliver the required quantity with my inventory first, but soon I ran out of inventory and all the orders went to backlog. This led to a significant in the cumulative cost. When the demand went down again, my inventory filled up so much (since I ordered A LOT during the demand surge) to a point that my weekly cost was getting out of control. After the game, we learned what caused the bullwhip effect and what are some ways to prevent it. Since raw data do not always available to all parties in the SC, each of the party has to make forecast based on other’s forecast. That’s why the further you’re form the end user, the higher is the oscillations. One of the ways to counter is to order in small batches to allow other parties have time to accommodate the new demand.
During this weeks class, we learned about the bullwhip effect in greater detail by playing the beer game simulation. Through running the simulation, it quickly became clear how hard it is to work effectively when unable to communicate. As the retailer, it was frustrating to me that I was placing orders based on the customers’ demand but was unable to receive the quantity requested due to shortages. It was also problematic that I wasn’t aware that this was due to shortages because no communication existed. The beer game simulation is really eye opening to how a lack of communication is detrimental to the efficiency of a supply chain and it is clear how this concept applies to real life scenarios.
This week we learned about the bullwhip effect concept and how important it is when managing any supply chain. I think this concept was clearly represented in our first round for the beer game. The bullwhip effect can be explained as distorted information from one end of the supply chain to another, creating fluctuations in how the various entities behave. The variability of this information is what causes the bullwhip effect. A small change at the beginning of the supply chain can cause larger fluctuations down the line. I experience this when at the beginning of the beer game I did not plan for larger demand fluctuations and I ended up with a big back order number. Thankfully towards the end of the game I was able to get my back orders to zero and eliminate the bullwhip effect.
This week, we did the beer game for the first half and then learned about the bullwhip effect in the second half. In the first half of the game, we all struggled with the fact that we could not communicate with the rest of our team. Our team consisted of the Factory, Wholesaler, Retailer, and Distributor. We all learned that communication is key, especially in supply chain. If we do not know what the other wants, we will not be successful in placing an order. During the second half of class, we learned about the bullwhip effect which directly related to our struggles in the beer game. We learned that when one part of the supply chain places an order, the next step will order more, then the next step will order more, etc etc. This leads to an exaggerated order quantity that is way more than ever expected. To decrease the bullwhip effect, it is necessary for each step of the supply chain to be in constant communication.
Week 5 has given me a better understanding of the bullwhip effect. I did not realize that it occurs through the forecasting using other peoples forecasts. The error in the forecast of the person using demand is increased when the next person use that forecast to create their own forecast, and so on. Mitigating the bullwhip effect relies on creating estimates or forecasts based on hard data that it being catered to. As long as all parties rely on the same data then the bullwhip effect will be mitigated. But if even one party forecasts based on a demand that is not consumer demand, all parties up the supply chain will be effected because they will not be prepared to fill the order if it is too large or will waste product if there is not enough down the chain.
This week in class we got into our groups to continue the second week of the root beer game. The simulation showed what the bullwhip effect can look like and the effect that it can have on inventory management of an entire supply chain. The game caused a lot of anxiety, as I found myself constantly wondering how much my group mates were ordering to constantly keep balance with my current inventory and costs. After a while it became impossible to know what was going to happen to my inventory levels without being able to forecast any of the sources. There needs to be consistent communication all throughout the supply chain from the sourcing of raw materials all the way down to the consumer to avoid unmanageable demand down the line.
Even though our team broke the silence rule, we were trying to figure out what was creating such high backlog and inventory in the beer game. What started out as a silent success in the first few rounds quickly escalated as we realized out backlog was continuing to rise at an alarming rate. As a retailer, I would try to keep up with demand. As demand rose and the orders couldn’t be fulfilled this started an effect to my other team members. Scrambling around to find the answer, we ultimately ordered 0 for several rounds to try and level off. The biggest lesson I took away was how one small change can have drastic effects on the entire supply chain, and communication has to be key in these situations.
In week 5, while playing the beer game, I learned in practice how the bullwhip effect works. Since I was the retailer in the simulation, I made small changes in the demand which resulted in some fluctuation at the wholesale level, more fluctuation at the distributor, and much greater fluctuation in the factory. So the lesson is that when there is a lack of communication in the supply chain, it would lead to large forecasting problems and from retailer perspective I couldn’t fulfill customer demand.
During this class I was able to get a comprehensive understanding of the bullwhip effect that takes place in between companies supply chains. As seen in the beer game, the retailer is where this issue begins. Fluctuation in their demand is not easily predictable, so when it occurs retailers begin to change their order quantities to match what they think demand will be. This unexpected increase in order quantity has a similar effect to the first in line supplier, who may not have the necessary resources to meet the quality demanded from the retailer. Being said, the supplier is now forced to order larger quantities of raw materials from the 2nd in line supplier. This effect continues down the chain of suppliers until all are affected. We also see that this effect has a substantially bigger effect the lower in the supplier chain it travels.
This week’s beer game really gave us hard time in the beginning and we eventually learn how to adjust our order amount in order to minimize our inventory and backlog. The outcome of bullwhip effect was significant during the first 20 weeks. Our team had sufficient inventory in the beginning. So we try to reduce the inventory in order to reduce the costs. As customer’s order follows up, we suddenly start to have backlogs and it cost more than inventory. It is easy to have a massive or insufficient inventory because it takes a total of four weeks to delivery to the next role. When I was doing the role of the retailer, I learnt it is important to have consistency and precisions in the supply chain. If I order too little or much, my supplier will get confused and they will not fulfil my order on time.
The beer game was really fun and educational. Our team did not do well in the first round, but we understood what we did wrong and we will correct our mistakes in the second round. Also, the Bullwhip effect was one thing that surprised me most in terms of its significant impact on the end of a supply chain (Factory). Bullwhip effect occurs in a natural way meaning people are contributing to the effect unconsciously until they realize they have excessive inventory on hand. Therefore, it is crucial for everyone involving in a supply chain to understand the cause of the Bullwhip effect and necessary steps to overcome or minimize this effect.
This week was focused around the beer game and the bullwhip effect. What I learned from the beer game was how to properly manage your product to not incur costs from holding inventory or back log. It was a great experience and was also challenging. In the lecture we discussed how distorted information from one end of the supply chain to another creates a fluctuation in how the various entities behave. The resulting variability in forecasts, orders and inventory levels is called the bullwhip effect. The factors that cause the bullwhip effect include: demand forecast updating, order batching, price fluctuation, rationing and shortage gaming.
I had a lot of fun playing the beer game last week, but it was also very instructive. I realized how difficult it was for companies to manage their inventories. During the game, my teammates were getting frustrated due to the backlogs inventory. We have assisted to a variation of demand starting from the consumer, which affect the successive suppliers. The bullwhip effect was due to the lack of communication and collaboration between team members. Once we started sharing information regarding the demand, we were able to successfully complete the remaining orders and eliminate the backlogs.
In week 5 we learned about the bullwhip effect and experienced the concept with the beer game. Our team learned how crucial clear communication is when managing a supply chain. Not being able to communicate during the game really effected our performance. Having each aspect of the supply chain effectively communicate and understand the dangers of the bullwhip effect is crucial to its success.
That beer game frustrating! however, it’s a fantastic model to teach the bullwhip effect. It was obvious by week ten there wasn’t enough information flow to react to the changes in demand. Every member in the supply chain was working as a silo trying to reduce or increase inventory, it was a mess. I used the exponential smoothing method to forecast demand which did not mitigate the bullwhip affect because i was using the distributors demand not the customers. Integrated information systems that share POS data as well as ordering in small batches will diminish the bullwhip affect in this case.
Last week in class we learned about the bull whip effect and what causes it to happen. The beer game helped us learn just exactly how the bull whip effect is applied in real life scenarios. I enjoyed the beer game because it took my team a while to figure out why we were all at some point negative with our inventories. Fluctuations along the supply chain is something that SC professionals have to deal with every day. The slide on page 15 is the perfect example of what happened during the beer game with spikes all the way from the customer to the supplier. We also learned how to forecast and counteract the bull whip effect and how important it is to understand the effect.
Learning about the bullwhip affect was very interesting in Week 5 because you can see how a lot of those issues can be avoided or minimized if you just communicate properly throughout the supply chain or utilize the counter measures. Seeing the bullwhip effect in action while playing the Beer Game really helped you gauge how much it can impact every player within the chain. You understand why communication plays a key role as you see that if you were allowed to speak to your group members, it would be easy to make orders without ever having any backlogs – which cause a rise in costs.
In week 5 we played the beer game, which was interesting yet frustrating. It was interesting because it allowed us to experience an example of how the supply chain of a company works. I enjoyed this more hands-on learning technique. But the beer game was very frustrating because it allowed us to experience the bullwhip effect. This showed the effects that shipping delays and lack of communication can have on the overall cost of operations for a company, including inventory levels and forecasting. Then in the lecture portion of the class, we further discussed the bullwhip effect and demand forecast updating. Overall, it was very interesting class.
In week 5, I learned about the bullwhip effect and how it is a major problem for companies. To demonstrate this effect, we completed the Beer Game (where we weren’t able to communicate with our group members). This game was very frustrating because I didn’t how many cases to purchase each period because of the no communication rule. As a result, my backlog began to skyrocket and inventory fluctuated constantly, causing total costs to increase significantly. In the slides, we discussed some of the causes of the bullwhip effect and how to reduce the impact. I think that the next round of the Beer Game will be easier and less stressful knowing more information about the bullwhip effect.
After week 5’s class, I left with a much better understanding of the bullwhip effect. This left me wondering – How may companies suffer extreme pains from this effect? It must be a commonly occurring problem for many companies, at least one time. Bullwhip, as I learned, CAN be mitigated, but only if a company is aware of its existence and the strategies to avoid it. By completing the beer game, we got to understand the annoyance of bullwhip. It was so frustrating to not be able to have communication AND have to wait two weeks to see if decisions worked with the customer demand. I now understand, with much greater respect, why running a supply chain is not an easy task. There are so many unpredictable events, and decisions made on these events are hard to reverse.
This week we played the Beer Game in our groups. This gave us a great understanding of how to bullwhip effect impacts supply chains. Being the retailer in the group, the problems started on my end. While trying to keep up with customer demand I varied my orders each week, and similarly my other team members found it difficult to predict my orders. We started off okay, but a small hitch in the ordering process threw our orders off pretty quickly and I found it very challenging trying to maintain an appropriate level of inventory. A mild fluctuation on my end can easily lead to excessive fluctuations in orders moving up the supply chain. I enjoyed this week – through our playing of the beer game, and learning about how the bullwhip effect impacts real companies like Pampers and HP, I feel that I have a comprehensive understanding of the bull whip effect as well as knowledge of some ways to counteract it.
In week five, we covered the topic about the concept of Bullwhip effect. I was able to familiar with the knowledge of what the bullwhip effect is, what is the reason caused it, as well the way to counteract it. During the round 1 of beer game, I gained a deeply understand of “bullwhip effect”, and I realized how it really impacts on supply chain process. I was played as a factory in the first round on the beer game simulation, the lack of communication during the game did appeared the bullwhip effect in our supply chain activities. The greatest fluctuation showed on my role’s orders and inventory level over a period of time.