Managing the supply chain (starting from the acquisition of raw materials, designing the optimal manufacturing process, and ensuring quality and timely delivery to the users) is the backbone of any business. Think of a logistic manager who takes care of the operation of supply chain management. His job is to balance production with market demand. There are many challenges faced by logistics managers in a variety of businesses. They need to make the right decisions like, how many units to produce, and how the production may get hampered when vendors delay the delivery of raw materials, etc. When enough quantities are not produced on time, then backlogs of orders grow. 

To understand production-distribution systems, The Beer Game was developed at MIT’s Sloan School of Management. This game has been played all over the world by thousands of people ranging from students to chief executive officers and government officials. Of course, there is no beer in the beer game. Students are more excited about producing beer than widgets or toasters. What this game teaches us is that short-sighted actions create a problem in a complete system. We start blaming our customers for ordering erratically, and our suppliers for delivering late.[i]

A leading automobile company was facing a contradiction in sales volume, and potentially, a fall in revenue. A big transformation was needed. The company looked at several cost reduction initiatives, organizational restructuring, laying off people, etc. They were working with various vendors who were causing problems in scaling efficiency. In an integrated supply chain from production to distribution, the company launched an innovative game to generate ideas on a new process required to bring efficiency in a fictitious company. 

Creating a digital model of your own supply chain and allowing people to play different roles in it can help in analysing the development of business strategies and the impact of those strategies on optimizing the supply chain and improving the performance.

[i] http://web.mit.edu/jsterman/www/SDG/beergame.html