Www.csupom.org PUBLICATIONS 2008-08-6

8/11/2019 Www.csupom.org PUBLICATIONS 2008-08-6

1/8

Volume 6, Number 1, pp 41-48California Journal of Operations Management 2008 CSU-POM

Learning Supply Chain Management with Fun:

An Online Simulation Game Approach

Keli FengSt. Cloud State University, St. Cloud, MN

Guohua MaSouth Carolina State University, Orangeburg, SC

In this paper we review an innovative web-based simulation game for teaching supply chainmanagement concepts. Different from many existing turn-based simulation games, this gamesimulates a real-world 24/7 environment where students can make supply chain decisions and applyknowledge learned in class. We also discuss how to integrate this educational game into an

undergraduate supply chain management class. The game was evaluated in an undergraduate supplychain management class at an AACSB school. The student evaluations indicate that most of thestudents enjoyed playing the game and preferred this simulation game approach to traditionalteaching methods.

I. INTRODUCTION

As more and more companies and schoolsrecognize the strategic importance of supplychains, supply chain management courses havebecome popular in many business schools and

some engineering programs. Designing abalanced curriculum is crucial for teaching thesubject effectively; the curriculum used by manytop graduate business schools is dominated bycase discussion and supplemented with lecturesand guest industry speakers (Johnson and Pyke,2000). These traditional teaching methods canhelp students understand supply chainmanagement concepts, but they cannot replicatethe dynamic 24/7 environment supply chainmanagers must face.

Online simulation games are alternativeeducational and training method, which cansimulate a real-world 24/7 environment and keepa balance between theory and practice. With theadvent of internet technology, online simulationgame has recently become a more and morepopular teaching tool for students to be activelyinvolved in the educational and training process.

In this paper we introduce an online simulationgame, Supply Chain Game, developed andhosted by Responsive Technologies(www.responsive.net). In this game, studentscan actively manage a supply chain on acontinuous basis, develop a set of supply chain

related managerial skills, and apply theories topractice.

The objective of this paper is to describeand review the online Supply Chain Game andillustrate how the game approach helps studentslearn supply chain management conceptsactively and effectively. The paper describes theimportant aspects of the game and explains howprofessors may effectively integrate this gameinto their teaching curriculums.

The remainder of this paper is organized as

follows. Section 2 briefly reviews the relatedliterature on supply chain managementsimulation games. Section 3 introduces theSupply Chain Game and students reactions.Next, we discuss on the link between supplychain management concepts and the simulationgame in Section 4. Section 5 presents tips onteaching and grading. The students evaluations


2/8

Feng and Ma

Learning Supply Chain Management with Fun: An Online Simulation Game Approach

California Journal of Operations Management, Volume 6, Number 1, February 2008

42

and instructors work load will be discussed inSections 6 and 7, respectively. The paperconcludes with a summary of the game.

II. LITERATURE REVIEW

Few simulation games are available for teachingsupply chain management. The most well-known game, beer game, was developed at MITin the 1960s to demonstrate the bullwhip effectin an inefficient supply chain. The early versionof beer game is a board game, which can beplayed in class but consumes a significantamount of class time. The most recent versionsare played with computers through the internetand include a computer game developed by

Simchi-Levi et al. (1998), an internet version byJacobs (2000), a beer game with stationarydemand by Chen and Samroengraja (2000), anear beer game (2003), and a modified beergame by Sparling (2002). Despite thee updates,the limitations of the beer game are twofold.First, the game only focuses on a specificprinciple of supply chain: the bullwhip effectand its causal factors. Second, the game is aturn-based game, which means that during thegame participants make a decision, submit that

decision, and then later receive response on theirperformance and the consequences of theirdecisions. This method fails to replicate thecontinuous nature of the real world.

Another turn-based game was recentlydeveloped by the Harvard Business School. Thisinteractive online simulation game allowsstudents to manage the complexities of a globalsupply chain in a mobile phone company(Harvard Business School, 2004). However,students still gain limited experience in dealingwith a 24/7 global supply chain environment.Other simulation games illustrate supply chainprinciples, but have some limitations. Jackson(1995) designed a distribution simulation gamein a two level distribution supply chain.However, the game is turn based and cannot beplayed online. Anderson and Morrice (2000)proposed a simulation game to teach service

oriented supply chain management principles,but their homegrown game is not commerciallyavailable. Trading Agent Competition SupplyChain Management game (TAC/SCM, 2002)was well-known among researchers, but it is not

suitable for teaching purpose.More recently, Corsi et al. (2006)developed a Distributor Game, which focuseson the distribution process in a global real-timesupply chain. Different from other turn basedsimulation games, this game replicates a realworld experience on a 24/7 basis. The game isstill in the testing phase and is not commerciallyavailable for interested supply chain instructors.After reviewing the existing supply-chaingames, we realized that the Supply Chain Game

developed by Responsive Technologies does nothave the limitations of other games. The game iscompletely web-based and played in real time(not turn-based). The game is also commerciallyavailable and affordable by students.

III. DESCRIPTION OF THE SUPPLY

CHAIN GAME

The Supply Chain Game is an internet basedsupply network simulator, which was developed

by Professors Sunil Chopra and Philipp Afecheat the Kellogg School of Management atNorthwestern University and adopted by schoolsin 2005. During the simulation game, teams ofthree to five students control a virtual company,Jacobs Industry, which produces an industrialchemical that can be mixed with air to formfoam. Student teams expand and manage thecompanys supply network on the fictionalcontinent of Pangea and an adjacent island ofFardo (See Figure 1). Each student team hasidentical demand and supply information andmakes decisions on demand forecasting,production and inventory control, supplynetwork design, and transportation options.

The supply chain game consists of twoassignments: one region game and networkgame, each of which lasts for one week. Foreach assignment, the student teams objective is


3/8


4/8

Feng and Ma



44

which is more complicated and involves moresupply chain decisions.

2. Network Game

In the network game, Jacobs Industry wants to

expand into all five regions of fictional continent(see Figure 1). Students begin the game with twoyears history of demand in Calopedia, which isidentical to demand in the first game, and a 90day history of demand in the other four regions.Except for the linear demand in Sorange, theexpected long-run demand pattern in other threeregions is non-seasonal, neither upward nordownward.

Facing the new markets demand, studentteams need to decide when and where to build

new warehouses and factories to balance supplyand demand. Students are told that it takes 90days to either construct a new factory or to addcapacity to an existing factory and it takes 60days to build a warehouse. Before students makeany expansion decisions, they should considerthe construction time. Most students alsorecognize that the factory and warehouse in theCalopedia cannot effectively satisfy the demandfrom all regions. Some student teams adopt await and see strategy and simply react to

demand. Better student teams use break-evenanalysis to estimate the break-even orderquantity for a new factory/ warehouse. Theythen compare the estimates to regional demandto decide if they should add a factory/warehousein each region.

Like in the one region game, thecontinuous review inventory model is used tocontrol production and inventory in factories.Student teams decide how to scheduleproduction in each factory and how to manageinventory in the supply chain. The shippingoptions are the same as in the first game, butshipping rates and lead times are different fordifferent regions. Most student teams figure outprioritizing shipping in each warehouse so theycan first meet the more profitable local demandand then meet demand outside of the region.Better student teams use transportation methods

covered in class to decide which warehousesshould serve each target market and how tominimize transportation costs from factories towarehouses.

FIGURE 2: SAMPLE NETWORK GAMESOLUTION

As in the first game, new technology willreplace the current one and demand for thecurrent technology will reach zero at the end ofthe simulation. In the first game most studentteams ramp down production and reduceinventory to prevent obsolescent costs at the endof the game. Figure 2 shows a student teams

solution, with a final cash position of$23,421,019.87, at the end of the network game.

IV. LINKAGE BETWEEN SUPPLY CHAIN

CONCEPTS AND THE GAME

The Supply Chain Game offers a greatopportunity to link different real-life scenarios toa variety of concepts and techniques that arecritical to managing supply chains in the realworld. These concepts and methods include

demand forecasting, inventory control,production planning and scheduling, networkdesign, and logistics. Traditionally, theseconcepts are taught in a certain order accordingto a textbook, but the simulation game helpsstudents dynamically link them together as anintegrated skill set. Table 1 summarizes the


5/8

Feng and Ma


California Journal of Operations Management, Volume 5, Number. 1, February 2007

45

linkage between supply chain managementconcepts and the game.

To integrate the game into anundergraduate supply chain management course,instructors should cover forecasting and

inventory control concepts before students playthe one region game. Typically, capacitymanagement and break-even analysis havealready been covered in an introductoryoperations management; however, instructorsmay review these concepts before the first game.Likewise, the concepts for the network gameshould also be covered in class before the gamestarts.

V. LINKAGE BETWEEN SUPPLY CHAIN

CONCEPTS AND THE GAME

The Supply Chain Game requires less lecturetime for instructors. Several days before thegame starts, a 30 minutes in-class introductionshould establish the basic setting of the gameand the instructors expectations. If possible, acomputer lab session is very helpful to allowstudent teams to explore the game and askquestions about it. Also students should haveaccess to a history of the game before the gameactually starts, so they can develop strategies inadvance. After each game, a follow-up in-class

discussion summarizes the important learningpoints for each simulation game.

We assess the students learning usingthree aspects of performance: the write-upreport, the simulation performance, and the team

presentation. The grading distribution is 60%report, 20% performance, and 20% presentation.The report should describe the student teamsactions and analyze whether other choices wouldhave allowed the teams to do even better. Thereport is graded based on the effectiveness ofstudents explanation and application ofknowledge learned in class. The performanceportion is based on student teams final cashbalance and is designed to give student teamsincentive to obtain better cash positions. The

presentation component is graded on studentsability to effectively present their analysis. Inaddition, the total weight of the simulation gameaccounts for 15 to 20 percent of students finalcourse grade.

V. TEACHING AND GRADING

The Supply Chain Game requires less lecturetime for instructors. Several days before thegame starts, a 30 minutes in-class introductionshould establish the basic setting of the game

TABLE 1: LINKAGE BETWEEN SUPPLY CHAIN GAME AND SUPPLY CHAIN

MANAGEMENT CONCEPTS

Game Game Attribute Supply Chain Management Concepts and Methods

One regiongame

Seasonal demand Winters model, Box Jenkins technique.

Factory capacityplanning

Different capacity management strategy: Proactive,reactive, and straddle strategy.

Factory inventoryplanning

Continuous review inventory model with reorder pointand order quantity

Transportation planning Financial analysis and break-even analysis

Networkgame

Supply chain strategy Fishers supply chain management strategy matrix,efficient or responsive supply chain

Demand in differentregions

Regression analysis, moving average, simpleexponential smoothing, Holts model, Winters model

New warehouses andfactories decisions

Break-even analysis, cost benefit analysis, risk pooling,network design

Transportation networkand planning

Cost benefit analysis, transportation mode selection,transportation method of linear programming


6/8

Feng and Ma



46

and the instructors expectations. If possible, acomputer lab session is very helpful to allowstudent teams to explore the game and askquestions about it. Also students should haveaccess to a history of the game before the game

actually starts, so they can develop strategies inadvance. After each game, a follow-up in-classdiscussion summarizes the important learningpoints for each simulation game.

We assess the students learning usingthree aspects of performance: the write-upreport, the simulation performance, and the teampresentation. The grading distribution is 60%report, 20% performance, and 20% presentation.The report should describe the student teamsactions and analyze whether other choices would

have allowed the teams to do even better. Thereport is graded based on the effectiveness ofstudents explanation and application ofknowledge learned in class. The performanceportion is based on student teams final cashbalance and is designed to give student teamsincentive to obtain better cash positions. Thepresentation component is graded on studentsability to effectively present their analysis. Inaddition, the total weight of the simulation gameaccounts for 15 to 20 percent of students finalcourse grade.

VI. STUDENT EVALUATION

To assess the effectiveness of the simulationgame, we conduct a student evaluation survey inan undergraduate supply chain elective class at

an AACSB accredited school. Most of thestudents were management majors in their fourthyear of college. Most students had completed anintroductory class in operations managementbefore taking this course, but none hadexperience playing web-based simulation games.The students were between 20 and 25 years old.

Based on the research of Ruohomaki(1995) and the reference listed in his paper, wedesigned and outlined nine survey questions tounderstand the effects of simulation game on

three levels: effects on individuals, effects ongroup behavior, and effects on later activities.Listed in Table 2, the survey questions askedstudents to rate different aspects of theirexperience with the game on a five-point Likertscale, with 5 indicating strongly agree and 1indicating strongly disagree. The first fourquestions were designed to evaluate effects onindividuals, such as cognitive learning outcomesand impacts of the game on participantsattitudes. The fifth question focused on theeffects of the game on groups of participants.

TABLE 2: STUDENT EVALUATIONS

Number Survey questionAverage

score

1Simulation game helped in understanding basic concepts in supply chainmanagement

4.06

2The game increased my interest and knowledge about supply chainmanagement

3.94

3I frequently found myself actively thinking about the simulation game andwhat decisions I should make

4.09

4 The game improved my decision-making and problem solving skills 3.94

5I better communicate and cooperate with my group members and shareknowledge with them via the game

4.03

6 I applied the lessons learned from the game to the real-life situations 3.72

7 The game is a positive contribution to the curriculum 4.06

8 I prefer the simulation game approach to conventional teaching methods 4.13

9 I recommend the game for future operations management courses. 4.09


7/8

Feng and Ma



47

The sixth question tested the transfer of skills,the generalization of knowledge, generalprinciples, or application of skills from the gameto a variety of real-life situations. The last threequestions were designed to examine the efficacy

of the simulation game compared to otherteaching methods.Based on 32 students responses, we

tabulated the average score for each surveyquestion as shown in Table 2. The results werepositive for all effects of simulation game. Mostof students thought the simulation game helpedthem better learn supply chain management,effectively communicate and cooperate withtheir group members, and apply the knowledgeto the real world. Students clearly preferred the

game approach to other teaching methods. Thesixth question has the lowest score among thenine questions, which may be because mostundergraduate students, particularly those whoare not working, do not have opportunities toapply the lessons learned from the game to thereal-life situations.

VII. INSTRUCTORS WORK LOAD

Instructors have three types of work: technical,administrative, and grading. Based on ourteaching experience, these work loads arerelatively moderate. First, instructors shouldcheck the availability of certain software atcomputer labs. Since Java platform is the onlysoftware needed for this game, instructorsshould guarantee the availability of the softwareat campus computer labs. Instructors should alsotake responsibility for solving technicalproblems that students encounter throughout thecourse, such as game connection loss andunexpected simulator interruptions.Secondly, instructors will have someadministrative work. The company offering theSupply Chain Game has no online paymentmethod, so instructors must either collectregistration fees from students directly orcoordinate with the campus bookstore to sell theregistration codes as needed. Instructors should

ensure all students registration before the gamestarts. Instructors may help students registertheir teams during a computer lab session oroffice hour, for example.Finally, grading requires a significant amount

instructor time. If group presentations arerequired, instructors also need to evaluate them.Depending on class size, the grading time mayvary from several hours to days.

VIII. CONCLUSIONS

As an excellent complement to traditionalteaching methods, the Supply Chain Game is aneffective and appropriate pedagogical approachfor teaching supply chain management concepts.

The simulation game provides students with ahands-on opportunity to apply knowledge andconcepts in a real world 24/7 environment.Students interact with the game and immediatelysee the impacts of their decisions on a supplychain. After playing the game, students betterunderstand supply chain concepts and effects oftheir decisions on inventory, distribution, andprofit. According to student evaluations, moststudents enjoy playing the game and prefer thissimulation game approach to traditional teachingmethods.

IX. REFERENCES

Anderson, E. and D. Morrice, A SimulationGame for Teaching Service-oriented SupplyChain Management: Does InformationSharing Help Managers with ServiceCapacity Decisions? Production andOperations Management, Vol. 9(1), 2000,40-55.

Chen, F. and R. Samroengraja, "The StationaryBeer Game," Production and OperationsManagement, Vol. 9 (1), 2000, 19-30.

Corsi, T. M., Boyson, S., et al., "The Real-TimeGlobal Supply Chain Game: NewEducational Tool for Developing SupplyChain Management Professionals,"Transportation Journal, Vol. 45 (3), 2006,


8/8

Feng and Ma



48

61-73.Harvard Business School, Global Supply Chain

Management Simulation, 2004,http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?referral

=9794&id=6107Jackson, P., Cornell University, 1995,http://legacy.orie.cornell.edu/~jackson/distgame.html

Jacobs, R., "Playing the Beer Distribution Gameover the Internet," Production andOperations Management, Vol. 9 (1), 2000,31-39.

Johnson, E. M. and D. F. Pyke, "A Frameworkfor Teaching Supply Chain Management,"Production and Operations Management,

Vol.9 (1), 2000, 2-18.Near Beer Game, 2003,http://forio.com/resources/the-near-beer-game.

Porteus, E. L., Web-Based Beer Game,Stanford University Executive Seminar,August, 1998.

Ruohomaki, V., "Viewpoints on Learning andEducation with Simulation Games," in J. O.

Riis (Ed.), Simulation Games and Learningin Production Management, Chapman &Hill, London,13-23, 1995.

Simchi-Levi, D., Kaminsky, P., et al., Designingand Managing the Supply Chain, New York,Irwin/McGraw-Hill, New York, 1998.

Sparling, D., "Simulations and Supply Chains:Strategies for Teaching Supply ChainManagement, Supply Chain Management:An International Journal, Vol. 7 (5), 2002,334-342.

TAC Supply Chain Management Scenario,2002,http://www.sics.se/tac/page.php?id=13.

Documents

Www.csupom.org PUBLICATIONS 2008-08-6