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Dairy Supply Chain Simulation
The simulation story: In the southern Indian state - Kerala, a dairy farm co-operative society operates through a supply chain distribution model. There are four echelons in the dairy supply chain - [1] The dairy processing plant that produces milk-based products by sourcing raw material (milk) from farmers, [2] The distribution hubs that are located in regional zones (districts) who procures products from the dairy plant and distributes to wholesalers based on demand, [3] The wholesalers who purchase products from distributors and supply to local community retailers and, [4] The retailers, at the downstream end of the supply chain who source products from wholesalers and sell to consumers in their locality. Each echelon has stores and logistical infrastructure for ordering, and storing products and incurs associated costs. Each player will be representing an echelon in the supply chain. Four players will team up to form a supply chain with 4-echlelons. The objectives of the participating players are: [1] Minimize the overall supply chain costs. This is the total cost incurred by the 4 member team over a time horizon, and [2] Minimize the supply chain cost at the individual echelon level.
Supply
Demand
Plant
Distributor
Wholesaler
Retailer
Consumer
Instructions to the Teacher / Facilitator:
1. The teacher is the main facilitator of the simulation, and is entrusted with the controls of the simulation game. The simulation cannot be run without the teacher, who reins the controls for the simulation setup, and the simulation run.
2. The first task for the teacher to enable students play the simulation, is to provide them the simulation code. Each student simulation code is unique and restricted to a limited number of licensed student users during purchase. Please ensure that the simulation code is shared only with your class. Once a student submits the simulation code along with his / her name and registered email ID, one user license for simulation play is uniquely attributed to the student. The student can access the simulation play from only one device at a time.
3. The second task for the teacher is to setup the simulation. This can be done from the "SETUP SIM" tab on this page. The controls available to the teacher for the simulation setup are: [1] Open or Close the Simulation for Play, [2] Setting the number of SKUs, [3] Setting the cost (inventory holding cost, stock out costs, obsolescence costs) and lead time for each SKU. Once this is done, the simulation is ready for play. While the students will be able to access the costs and lead times on their screens, it is suggested to communicate to these details to the students during the initial briefing. The initial briefing may include the simulation story (context), objectives to be achieved (at an individual echelon level and team i.e. supply chain level), and the associated variables such as costs and lead times.
4. The third task for the teacher is to run and control the simulation game. For this, the teacher has to: [1] Enter the weekly customer demand value. Note that the teacher also takes the role of the end-consumer in the supply chain, and hence this value entered is the weekly demand for the retailer, [2] The teacher, after all players have made the weekly orders, has to click the button to proceed from one week to another. If a player has not entered an order before the teacher moves to the next week, the player's default order will be taken as zero. The suggested runs for the simulation is for a time period of 25 weeks, but the teacher can close the simulation after 20 weeks, if the weekly runs take more time than expected. While you can expect an initial learning curve, 25 runs (with 3 min/ avg. run time) is suggested for a 90 minute class.
5. While the teacher enters the customer order, it is advisable to follow a realistic demand pattern (eg. a more or less uniform demand pattern in the initial weeks for cheese, which then builds up to a sinusoidal increase during festival season, which then tapers back to normal).
6. Please note that the teacher can change the complexity of the game mid-way, from the setup tab. For instance change the number of SKUs, or the lead time. The lead time at each echelon is set at 1 week (default value) for all SKUs . This means that if a player orders something from the upstream echelon, it will be delivered in the next week provided it is available. This lead time can be varied by the teacher (eg. 1 week, 2 week etc.) to reflect changes in the business environment, such as supply shocks. It is recommended to notify the students of any such changes in a certain week during the course of the simulation.
7. Apart from the dashboard controls, the teacher is also expected to control the class room environment. Students are not supposed to communicate to other players using any other means during the course of the simulation. If this happens, it can amount to collusion, and the instructor may enforce penalty costs to the individual echelon or/ and supply chain in such cases.
8. The teacher may switch between the tabs (briefing, setup sim, and results) during the course of the simulation to refer to the briefing guidelines, change the setup values, and/ or to see echelon level or total supply chain results (costs) for any week that has been played, or to keep track of the cumulative costs.
9. The simulation ends with a debrief by the facilitator on [1] The Mechanics of the Supply Chain, [2] Bullwhip effect and ways to mitigate it, [3] Comparing performance of different teams, and analyzing what went right or wrong during the decision making process.
