RE: Red Bead and Beer Game consolidation?

[Rip Stauffer <rstauffer@bluefirepartners.com>]

Hello, Denizens,

I'm not sure what the point might be of consolidating these; the lessons are
different. In the Red Bead, the variation is predictable and steady and
comes from the system. In the Beer Game one small but steady increase at the
supply end of the system throws the whole system into chaos--the variation
that kills the company comes from a spiraling increase in orders created by
the psychology of people in the middle misunderstanding customer demand and
tampering (rule 3? rule 4? some combination?); the resulting shock waves up
the supply chain.

Steve Prevette's suggestion of using some random generator for the orders
would make for an interesting game...astute supply chain managers might
develop a control chart to determine the predictable order quantity and
build re-order triggers from that. I would not do that in a class,
however...one of the more profound eye openers that people seem to get is
when they find out that the chaos didn't come from the customers...after
they double demand in the second week, it stays at that 4-case level every
week throughout. ALL the variation is caused by the managers trying to work
both ends against the middle without understanding the consequences of their
actions.

Best regards,

Rip

Rip Stauffer
Senior Consultant
BlueFire Partners
rstauffer@bluefirepartners.com
612-344-1027