The Only College Beer Game That Matters

A decades-old business school simulation exercise illuminates how human error can snag up supply chains

- Brendan Murray and Enda Curran with Cindy Wang

Prospects that the world’s snarled supply chains may become less tangled were dealt a setback last month when a couple of MIT students bought 10,000 cases of beer.

The purchase order wasn’t real. It was part of a role-playing exercise called the Beer Game that’s something of a rite of passage for first-year MBA students at the prestigious Sloan School of Management. Created in the 1960s, it models the supply-and-demand dynamics among a brewery, distributor, wholesaler, and retailer. At the Sept. 24 game, held at a Marriott in Cambridge, Mass., Team Bemba got nervous, made the big buy, and amassed $213,000 in make-believe carrying costs.

The real-life takeaway: The urge to hoard, which has fueled panic buying of everything from flour to microchips, was alive and well in this crop of budding corporate managers. “The pandemic revealed flaws that were latent all along our globalized supply chains,” said management professor John Sterman, addressing the 125 assembled students before the game got under way. “It’s urgent that we figure out how to improve them so we are prepared for the next shocks, whether another pandemic, civil unrest, climate change —or all of the above.”

When the game wrapped after three hours, all 15 of the MIT teams had logged higher-than-average costs. So Sterman shifted the discussion to understanding how such a select group could “all do so badly. And not just badly, but really badly.”