Let’s investigate using game dynamics to manage a global supply chain. We’ll start by imagining a company called Fantastic Corporation. They make a fantastic home entertainment system, and Fantastic needs active cooperation from the other players in its supply chain if it is going to increase its sales and grow market share.
The folks at Fantastic organize what they call a “Massively Multiplayer Online Collaboration” to kick off their sales campaign. People attend online or in-person at Fantastic’s corporate office. There is a master of ceremonies from Fantastic who is acting as the event leader, but that mostly means facilitating a free flow of ideas and keeping people focused on the tasks at hand. If Fantastic can bring the manufacturers, distributors, and retailers it works with into a collaborative game of supply chain management then everyone in the supply chain has a chance to move a lot of product and make a lot of money.
Everyone logs onto the internet and accesses a collaboration platform called SCM Globe Enterprise. It provides a map of the world that is projected on the large screen at the front of the conference room for those present at Fantastic, and people online see it on their screens. All participants can follow along and talk to each other using voice, video and chat links. The map starts out showing the global reach of the Fantastic supply chain. Figure 1 shows a global view of Fantastic’s supply chain.
Figure 1. Global View of the Fantastic Corporation Supply Chain
The facilities of all the companies and routes between them are shown. By clicking on facilities people can see relevant information; by clicking on routes it shows the vehicles that travel on those routes and other relevant information. People use touch-screen controls to call up information. By tapping on countries or cities, they access specific market data. The map displays current sales by product category and sales trend lines over the last several years can also be shown with a further tap of the finger.
People can also make changes to the supply chain by adding or deleting products, facilities, vehicles, and delivery routes. And they can change production amounts at factories, delivery schedules for moving products between facilities, and product demand forecasts. As people make changes on their displays at Fantastic or elsewhere online, the changes are seen by everyone as they happen, and the session progresses.
Then three of the parts suppliers add in new factories their companies are building that can deliver more components for the Fantastic home entertainment system. More will be needed to support the increased manufacturing activity planned at Fantastic. Then a guy from the logistics company that supports stores on the east coast and the midwest adds in a new distribution center they are opening up and shows on the map how they could support additional store deliveries of the Fantastic product (this is illustrated in Figure 2a and 2b below).
Figure 2a. Satellite view of new Midwest Distribution Center
At that point some retailers say they are opening more stores and if they started stocking the Fantastic product then their demand forecasts would go up, so they enter higher demand numbers at a bunch of their stores. As the session progresses, this visibility and interaction makes it possible to get a good group consensus on amounts of product that can be sold and the amounts of component parts and distribution services needed to support this sales growth.
Figure 2b. New Distribution Center Supports Additional Stores
People run simulations on the supply chain configuration they have designed to see if it can handle the product volumes required to meet sales forecasts. The simulations run before everyone’s eyes and show where problems will crop up. Figure 3 shows results from one of the simulation runs. It shows inventory delivered to each of the stores, and then shows a red circle over the New York store and the Atlanta store indicating that with the existing delivery schedules and demand forecasts these stores will run out of inventory in a couple of weeks.
Figure 3. Simulation Results Showing Supply Chain Performance
As these problems come up in the simulations, people respond and make changes to the supply chain and rerun the simulations. After several iterations and some spirited discussions, a supply chain design and operating schedule is arrived at that delivers the needed performance levels at costs that are acceptable to all. Figure 4 shows some key performance indicators (KPIs) for participants.
Figure 4. Key Performance Indicators
This collaboration session harnessed several game dynamics, one of which is called “crowdsourcing”, to pool peoples’ ideas and arrive at a good supply chain design. Fantastic Company invited its supply chain partners to an open exchange of ideas and simulations to test the soundness of ideas and designs. The group arrived at a good solution and that solution also has the active support of all the relevant parties. So it is likely to be successful. Figure 5 shows a sample Profit & Loss report based on this supply chain plan.
Figure 5. Profit & Loss Report
Everyone participates in defining objectives and performance levels that need to be met, and those roles and rules for each company are set forth in their contracts with Fantastic. People at each company feel good about what they accomplished. And each party in this multiparty online game sees how they can make money, and maybe even have fun doing so.
Everything people need to continue working together is there online in the collaboration platform and information will be updated in real-time or near real-time as people start carrying out the activities they agreed to. This event would never be confused with that bane of corporate existence known as a “meeting”.
NOTE:
This event was what gamers would call a massively multiplayer online role playing game (MMORPG) – MMOG or MMO for short. They are a type of game that closely resembles business activities such as those described here. What can happen when we take game technology and its close cousin, social media, and apply these technologies to the way we do business?