Lean Game and Bullwhip Game

Lean Game

Introduction

The lean manufacturing process is generally defined as the business performance strategy that regulates the manufacturing stage by reducing the manufacturing wastes and improving the manufacturing process. The key problems and risks that are considered in this game are over-production, waiting time, transportation, processing, inventory, motion and scrap. This helps to improve the overall quality, as well as decrease the production time. The constant process analysis is regarded as the key tool for lean manufacturing, therefore, the pull production and mistake proofing. (Autry and Griffis, 2008)

The “lean manufacturing” simulation game is regarded as one of the most effective Just-in-Time games for training the necessary sense of manufacturing process regulation. (Autry and Griffis, 2008) The group was divided into teams 7 participants each, and each was engaged in manufacturing colour widgets. The entire process was intended to simulate customer–manufacturer relations starting from customers’ order and demand, and finishing with the arrangement of an effective supply chain. (Chakravarty, 2001)

Setting Up

The game was played in three stages-rounds. The first two stages were played by our team (Red Hat) without any reconsideration of a strategy. The third round was played after thorough reconsideration of the process efficiency, as well as the effectiveness of the output. (Mentzer, Dewitt, et.al., 2001)

The overall results of the game were defined by the effectiveness of the supply chain structure. Since the actual importance of the communication is explained by the necessity to regulate the manufacturing process during the game. Regardless of the fact that the overall effectiveness of the teams was low, the structures were subjected to essential restructurings and evolution. Therefore, the optimal supply chain has been found, however, it can not be regarded as the best alternative. (Helyt, 2004)

Analysis

The overall process was intended to replicate the push manufacturing system that involves three key stages: Expected demand, production (including custom manufacturing), and economic performance of the manufacturing company.

The flow was not perfect due to the poor communication process, and isolation of the assembly stage during the first two stages. The bottlenecks were mainly associated with the low effectiveness of the overall structure, and improper allocation of the manufacturing load. The response of the customers helped to find the optimal solution for the entire structure.

The changes that were made are the moving of people, purchasing of new equipment for reducing wastes, and manufacturing time. Inventory control was needed for the Round three-stage only, while there were no problems found. Therefore, being agile, the company needs to consider the improvement ideas from the perspective of supply chain effectiveness, and further assessment of the market demands. This should also define the reasonable quality level.

Bullwhip Game

This game is aimed at achieving personal experience in assessing and using the Bullwhip Effect. This effect is featured with the changing demand increase, and similarly changing supply chain that may be either negative or positive. (Boyson et.al., 2004)

The game was focused on the supply chain of the TV sets manufacturing, storing, and distribution.

Our team was in the role of a manufacturer of the TV sets, and the key responsibilities also involved storing and transportation of the manufactured goods. Since the team is a manufacturer only, there are no suppliers at our disposal available, however, we are responsible for the in-time delivery of the raw materials for manufacturing the TV sets in time. We also had to consider the demand rates, as well as raw materials purchase in order to avoid over-production, and shortages in supplies. (Torres and Maltz, 2010)

As is seen from the graph, the incoming orders are subjected to essential fluctuations that are significant for the entire distribution process. However, these orders are not made by the customers, while the entire chain presupposes three additional elements between the factory and the customer.

Learning

Considering the results derived from the graph, the safety stock that may be observed, the firm keeps it for preparing the necessary buffer in the case of unexpected demand from the customer audience. (Hult et.al., 2008) To keep with this demand, we had to keep the sufficient stock-in-hand, and this was not affected by insufficient demands. Nevertheless, some problems with manufacturing were identified. These caused violations in the supply chain structure. (Wang, 2004)

The transportation and delivery problems were mainly associated with the capacities of the delivery system (one truck is able to carry a restricted amount of TV sets. Therefore, the purchase of the additional truck was needed for avoiding backlogs, and delays in the delivery of the production. (Boyer, et.al., 2005)

The upstream which was observed during the 12-17 periods was difficult for the delivery system. Since 43 TV sets could not be carried by a single truck, and two could not be filled instantly, the upstream was featured with the delay in the production delivery. The logistic changes that are required are the increase of load platforms capacity and creating of reserve stock. This will help in on-time delivery to its customers and increase the level of customer satisfaction. (Kahn, et.al, 2006)

Bullwhip Effect

In the light of the results achieved, it should be emphasized that the entire bullwhip effect of the manufacturing has an essential influence on the supply chain structure. Hence, it should be minimized for improving the effectiveness of the logistics structure, as well as improving the entire managerial strategy. This minimization may be achieved by the means of informational exchange, and proper communication process between the participants of a single supply chain. Hence, the cooperation should be improved for avoiding over- and under-productions. (Sebastiao and Golicic, 2008)

If the companies manage to improve the entire communication process, the supply chain will be better coordinated, and more effective. The demands of the customers will be messaged from retailer to factory through the entire supply chain, and this will help to change the manufacturing strategy by reforming the push- or pull manufacturing system depending on the customers’ requirements. Additionally, this will decrease the costs of the production, as fewer wastes will be originated. Additionally, the new supply chain will cause a higher trust level between thee elements of the structure. (Min, et.al, 2008)

References

Autry, C. W., & Griffis, S. E. 2008. Supply Chain Capital: the Impact of Structural and Relational Linkages on Firm Execution and Innovation. Journal of Business Logistics, 29(1), 157.

Boone, T. & Ganeshan, R. (Eds.). 2002. New Directions in Supply-Chain Management: Technology, Strategy, and Implementation. New York: AMACOM.

Boyer, K. K., Frohlich, M. T., & Hult, G. T. 2005. Extending the Supply Chain: How Cutting-Edge Companies Bridge the Critical Last Mile into Customers’ Homes. New York: AMACOM.

Boyson, S., Harrington, L. H., & Corsi, T. M. 2004. In Real Time: Managing the New Supply Chain. Westport, CT: Praeger.

Chakravarty, A. K. 2001. Market Driven Enterprise: Product Development, Supply Chains, and Manufacturing. New York: Wiley.

Helyt, D. V., 2004. The Lean Game in the Management Strategy Training. New York: Oxford University Press.

Hult, G. T., Ketchen, D. J., Adams, G. L., & Mena, J. A. 2008. Supply Chain Orientation and Balanced Scorecard Performance. Journal of Managerial Issues, 20(4), 526.

Kahn, K. B., Maltz, E. N., & Mentzer, J. T. 2006. Demand Collaboration: Effects on Knowledge Creation, Relationships, and Supply Chain Performance. Journal of Business Logistics, 27(2), 191.

Mentzer, J. T., Dewitt, W., Keebler, J. S., & Min, S. 2001. Defining Supply Chain Management. Journal of Business Logistics, 22(2), 1.

Min, S., Kim, S. K., & Chen, H. 2008. Developing Social Identity and Social Capital for Supply Chain Management. Journal of Business Logistics, 29(1), 283.

Sebastiao, H. J., & Golicic, S. 2008. Supply Chain Strategy for Nascent Firms in Emerging Technology Markets. Journal of Business Logistics, 29(1), 75.

Torres, O. C., & Maltz, A. B. 2010. Understanding the Financial Consequences of the Bullwhip Effect in a Multi-echelon Supply Chain. Journal of Business Logistics, 31(1), 23.

Wang, M. Y. 2004. Accelerated Logistics: Streamlining the Army’s Supply Chain. Santa Monica, CA: Rand.