“They just don’t realize it.”Įach team in the Beer Game consists of people at four stations, representing a beer retailer, a wholesaler, a distributor and a brewery. “Somewhere in America, in some way, shape or form, a company is essentially playing the Beer Game every day,” says John Carrier, a senior lecturer at MIT Sloan who specializes in improving manufacturing operations. And when one small part goes awry, a whole system can fail.

A factory is a system of machines and routines. A supply chain, which the Beer Game mimics, is a system of smaller businesses. But the Beer Game has been a durable teaching tool because it hammers home a core element of MIT management thinking: Every aspect of business is a system. That seems like a lot to draw from a game played on printed plastic tablecloths with supplies you could find in a drugstore.

Understood properly, Repenning tells the executives, the Beer Game shows that “operations must be managed as a system, not as a set of isolated activities.” The Beer Game is at once simple to play, difficult to master and full of lessons.Īmong other things, the game illustrates the nonlinear nature of industrial and economic changes the futility of blaming employees for problems beyond their control and our general tendency to impose preconceived ideas on complex situations. The executives are playing the Beer Game, a business simulation that is an institution at MIT, where management guru Jay Forrester invented it in the 1960s every entering class in Sloan tries it en masse at the beginning of the academic year. With that, six groups of high-achieving managers from a major multinational firm, ensconced in MIT’s Building E62, check some small slips of paper, move piles of red chips along the tables where they are seated, and scribble numbers on some rudimentary accounting forms. “Everyone, take your order slips and move the shipment to the left,” says Nelson Repenning, a professor of systems dynamics at the MIT Sloan School of Management. As the United States seeks to reinvigorate its job market and move past economic recession, MIT News examines manufacturing’s role in the country’s economic future through this series on work at the Institute around manufacturing.

Harvard supply chain simulation answers