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Antoine Tzavaras XBEER GAME

Antoine Tzavaras
Monday 18 March
Section 5
Supply Chain Simulation & Case Studies
The bullwhip effect you experienced in the two rounds
The differences between the traditional supply chain (round1) and the
collaborative supply chain (round2)?
The impact of information sharing on both individual and group performance?
First of all, let’s expose my understanding of the bullwhip effect. The bullwhip effect
begins when there is an increase in demand for a product coming from the consumers.
Then the retailer makes an order to its supplier, which is actually more important than
the real demand of the consumers, in order to have a safety stock, or to benefit from
discounts on the volume of purchase.
As we move up in the supply chain, the demand continues to increase because at each
level of the chain additional units of safety stocks will be added. Moreover, the demand
will also increase because of the larger order volumes to be able to benefit from better
In order to save transports costs suppliers will wait and delays will occur. This
phenomenon will create the tendency to request more security stock and backorders
will occur. The manufacturer will perceive a huge increase in demand artificially
amplified and which could lead to increase production in response to a much larger
demand than the demand real.
At the first round my role was retailer and I was directly linked to the demand of the end
consumer. I have tried to prepare a safety stock in case of a strong increase in demand
for both beers. Since the beginning the distributor and the wholesaler have had some
problems to satisfy my orders. Indeed, I had ordered too much at the beginning: It is
much more interesting to order 3 times 3000 units rather than 9000 units because of
the delays of delivery. Without communicating with the other actors of the supply chain
it was very difficult to manage my inventory and had backorders all the time.
During round 2, my role was wholesaler. As I had already performed as a retailer I could
definitely better understand how to manage the distribution of the wholesaler.
Moreover, we had access to the demand of the end users. Unfortunately this last factor
was one who tricked our team. Indeed, the retailers had wrongly forecasted the demand
for the Igloo beer. This is why we produced and distributed a huge amount of Igloo,
which was much higher than the actual demand. This phenomenon has had huge
consequences in the inventory costs at each stage of the supply chain. However, thanks
to communication and a good forecast of demand for the Calore beer we had very few
Communication between the different actors of the supply chain has had tremendous
consequences on our project. Indeed, thanks to communication we could order in way
that satisfied each of our suppliers. On the other hand, we could better manage our
transport costs by sending full trucks rather than half filled trucks. Unfortunately we had
this little misunderstanding with the retailer regarding the demand of igloo, we could
have managed a positive end result.
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