Experiencing The Beer Game at Sloan Orientation

Beer Game MITTeam Sunny Beer gets ready to play the Beer Game.

The Beer Game was one of the most impactful events I participated in during this year’s MIT Sloan orientation week.

The game, invented by MIT Sloan professors in the 1960s, is played by at least four players (eight in the case of our orientation game) and is a simulation of what it’s like to work in a multi-level supply chain. In this case, the supply chain involved the distribution of beer and four key players: Retailer, Distributor, Wholesaler, and Factory.

Beyond demonstrating the concepts of supply chain management, the game also typically throws players unknowingly into heated and emotional competition as inventories and backlogs pile up and the beer game turns into the blame game.

Professor John Sterman, who directs the MIT System Dynamics Group, has been hosting the Beer Game at MIT for 25 years now, making MIT’s Beer Game the longest running series of Beer Games in the world, and since it incorporates the entire incoming Sloan class, the largest group of simultaneously running games in the world, as well.

During the beer game, my team, Sunny Beer — so named after one of our teammates — worked diligently to create as efficient of a supply chain as possible. In the end, though, we fell into the trap of amassing larger and larger backlogs down the supply chain, which then turned into huge inventories. While we weren’t the worst team in the room, we performed worse than average (which is an operating cost of $2,000), and more than ten times worse than the optimal operating cost of $200. For the record, the best team in the room, named “Drunk,” came in with costs of $304 — they happened to be one of the tables of experienced players, though. The best inexperienced table, calling themselves “MIB” (for Massachusetts Institute of Beer), came in at an impressive $440, still more than twice worse than optimal. And the worst teams racked up more than $6,000 in costs.

Having played the beer game once before at NYU Stern undergraduate school, but having forgotten everything about it, I squeaked my way in at an inexperienced table and played the role of the retailer alongside a classmate. We made seemingly rational decisions to cover our behinds in ordering just a little more than consumer demand each time, just in case demand suddenly spiked up… The entire chain upped their orders as a result, though, and we assisted in creating what is known as the bullwhip effect, causing everyone down the chain to first experience surging backlogs and then massive inventories that were impossible to get rid of, as we had satisfied our need to “cover our rears” and turned off the ordering hose.

We sat helplessly at the head of the table, unable to talk with our teammates, who by the end of the game were under the impression that consumer demand had suddenly spiked and then gone flat, when in fact that was definitely not the case.

Professor Sterman Beer GameProfessor John Sterman shows team results for the orientation Beer Game.

Professor Sterman debriefed the room of more than 400 players at the end of the game, discussing how quickly most players had slipped into harmful behaviors of protecting themselves, while also wrecking the rest of the supply chain. Game facilitators assisted him in collecting quotes during the game, many quotes of which signaled resentment and distrust for other players — other players who will be their future classmates.

Sterman, indeed, gave a show-stopper performance in showing graph after graph of historical data from the game, including player quotes and even pictures from previous games as well. He told a dramatic story of how this type of behavior isn’t too much of a leap from the resentment, distrust and hate we see in other parts of the world, not just professional. Thoughts like, “Those wholesalers, you know how they are,” aren’t a big leap from “Those women or those blacks, you know how they are,” he told us.

During the game, I didn’t experience strong feelings of distrust in my teammates, but rather a sense of helplessness once I had realized that I had unknowingly been a source of confusion for the rest of the supply chain, that my actions had directly impacted the issues that the rest of my teammates were facing — huge backlogs and unwanted inventories.

Once my teammate and I had dug our hole as retailers, though, it was too late. We were unable to reverse the damage we had done in time for the end of the game.

I am excited for future MIT Sloan classes who get the opportunity to play the Beer Game. It’s an unexpected journey towards self-awareness, especially in a professional sense, but also from a personal perspective.

And you’ll be happy to know that real beer consumption typically takes place right after the game. So, your cravings won’t go unsatisfied, no matter how big of a backlog you accumulate in the game.

Happy playing!

Erica Swallow

Erica Swallow is a technology writer, startup entrepreneur, and status quo wrecker. She is currently an MBA candidate at the MIT Sloan School of Management and her thoughts have been published in a number of esteemed outlets, including Forbes, Entrepreneur, The Wall Street Journal, and The Huffington Post, among others.

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