The Beer Game

All week I had been mulling over various ideas about what to write this blog post on but nothing seemed to stick. I kept my eyes peeled for any interesting news articles related to class concepts in my various information feeds but the universe wasn’t providing me with any easy solutions. Finally as I sat down on Thursday evening and rolled up my sleeves hoping a wave of inspiration would strike me I was again left empty handed. As I was having a staring contest with my blank screen I decided to let it win this round as I grabbed a beer. This wasn’t just any beer this was a homebrewed beer that I had been waiting weeks for it to finally be ready. Hearing that satisfying hiss as a popped the top and took the first refreshing swig…it hit me! I love brewing so why don’t I write about that!

Having dabbled in the craft brewing industry and having friends in the industry I knew I could relate it to class. The craft brewing industry is often a very close knit network of local brewers who often establish their breweries all within close proximity to each other. Obviously there is a social/professional/beer enthusiast network that connects both microbreweries with larger companies as brew masters move between businesses. Even though this personnel/geographical location network was the first thing that came to my mind I couldn’t find any real analysis of it so I moved on.

Next, and somewhat related to my first thought, was my consideration of the supply network of grains and hops. Not only does this network exist between suppliers and brewers but between brewers themselves in addition to brewers and the local community (i.e local agriculture). These interactions of purchasing, exchanging, and disposing of brewing products could provide for some very interesting network analysis as two industries are connected. Some interesting interactions that I have observed between breweries and agriculture include: Dairy farmers purchasing malt to feed to their cows, pig farmers purchasing the malt for feed, and most interesting is brewing (as well as spirits) companies disposing old or bad alcohol at an anaerobic digester on a dairy farm.  Although I couldn’t find anything specifically related to these sorts of interactions it is where I hit the jackpot.

Unbeknownst to me as an MS&E major and having taken operations classes but the beer industry is used as a classic example of supply chain coordination games. The beer game is used in operations classes to teach and exemplify the fundamentals of supply chain coordination. If you are curious you can even download the app on iTunes. In the game students encounter “typical coordination problems of (traditional) supply chains, in which information sharing and collaboration does not exist”. From this original game there has been a beer auction created as well. With the auction version students are acting in a B2B auction environment where “individual parties are not allowed to exchange their information due to antitrust principles and only communicate via bidding prices”. This allows for the fundamentals of auction theory to play a role in how students both buy and sell goods. All in all it’s a win for the brewing industry to have made such a “vital” contribution to academia.

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