The Coin Game

SUPPLY CHAIN BASICS Key Learning Points: The dynamics of a supply chain The benefits to be gained from Supply Chain Visibility Demand/Supply Integration Key Learning Points: The dynamics of a supply chain The benefits to be gained from Supply Chain Visibility Demand/Supply Integration

SUPPLY CHAIN BASICS Key Learning Points: The dynamics of a supply chain. The benefits to be gained from Supply Chain Visibility Demand/Supply Integration Key Learning Points: The dynamics of a supply chain. The benefits to be gained from Supply Chain Visibility Demand/Supply Integration The Model: One Market One Plant Two distribution centres Transport points between each stage Measured against inventory holding and backorders The Model: One Market One Plant Two distribution centres Transport points between each stage Measured against inventory holding and backorders

THE COIN GAME Starting Point: The Game board is drawn up as shown below The Supply Chain is primed with : 16 pieces of inventory at each stock holding point 4 pieces of inventory at each transport point Purchase order for 4 at each supplier of inventory Each stock holding point has : Purchase orders Accounting grid Starting Point: The Game board is drawn up as shown below The Supply Chain is primed with : 16 pieces of inventory at each stock holding point 4 pieces of inventory at each transport point Purchase order for 4 at each supplier of inventory Each stock holding point has : Purchase orders Accounting grid Market Region Distn Centre Secondary Site Primary Plant T4T4 T1T1 T2T2 T3T3 Cust P1P1 P2P2 P3P3 P4P4

THE COIN GAME - GAME RULES Game Rules: In the first round communication or visibility is not allowed The accounting grid must be complete by the end of each round Inventory is costed at £1 Backorders are costed at £5 Capacity limits maximum order quantity to 25 pieces Game Rules: In the first round communication or visibility is not allowed The accounting grid must be complete by the end of each round Inventory is costed at £1 Backorders are costed at £5 Capacity limits maximum order quantity to 25 pieces

Objectives: Maximise Customer Service Minimise Costs Objectives: Maximise Customer Service Minimise Costs Measures: Backorders Inventory Measures: Backorders Inventory THE COIN GAME - GAME RULES

The Game steps are: Place Purchase Orders Customer places order on Market Satisfy Customer Receive Product from Transit Move Product into Transit RETURN TO TOP Performance Measure The Game steps are: Place Purchase Orders Customer places order on Market Satisfy Customer Receive Product from Transit Move Product into Transit RETURN TO TOP Performance Measure THE COIN GAME - GAME RULES

THE COIN GAME - IMPROVEMENTS FORECAST DEMAND Visibility of a demand forecast - note this is not 100% accurate. Available to Market only PRODUCT IMPROVEMENT Cost of Inventory reduced to £0.80 per round CAPACITY Increase maximum order to 50 SUPPLY CHAIN VISIBILITY Upstream and downstream customer position and information sharing REDUCE INVENTORY SAFETY STOCK Initial inventory reduced to 12 pieces FORECAST DEMAND Visibility of a demand forecast - note this is not 100% accurate. Available to Market only PRODUCT IMPROVEMENT Cost of Inventory reduced to £0.80 per round CAPACITY Increase maximum order to 50 SUPPLY CHAIN VISIBILITY Upstream and downstream customer position and information sharing REDUCE INVENTORY SAFETY STOCK Initial inventory reduced to 12 pieces

SUPPLY CHAIN BASICS PRODUCT INFORMATION Market Region Distn Centre Secondary Site Primary Plant T4T4 T1T1 T2T2 T3T3 Cust P1P1 P2P2 P3P3 P4P4

SUPPLY CHAIN BASICS DDDDSSSS Market Region Distn Centre Secondary Site Primary Plant T4T4 T1T1 T2T2 T3T3 Cust P1P1 P2P2 P3P3 P4P4 FORECAST MPS/MRP DRP