Play the game!

The learning effects of serious service supply chain gaming.

Put five people in a room. Assign different roles and targets to each of them. Instruct them how to act, introduce incentives to everyone and introduce the playing field. If I then tell you that their respective roles are Asset Manager Airplanes, Logistics Manager, Manager repair shop, Parts supplier, and Financial Controller then you know: Chaos is complete. Airplanes down, emergency shipments of parts, high inventories, inability to supply repairables, capacity constraints at suppliers, et cetera.  

The abovementioned situation was created last week during the introduction of our in-house[1] developed service supply chain game to our new colleagues. This serious game provides a unique way to gain insight in the dynamics of service supply chains, the way key-players behave in these environments and why they do that. For the people that play the game, it also provides a starting point for optimizing their service supply chain in real life.

Playing the game in real life, however, is complex and requires hard work. Let me share some learnings from our play last week.

Learn the rules of the game

To play the game right, you first must learn the rules of the game. What does my installed base look like? What parts are critical? Who are my suppliers? How is my supply chain network organized? How does the agreement for the supply of parts look like? If you do not know the rules of the game, you are lost. So, start with getting the basics right and improve from there.

Identify the ultimate service supply chain goals

After you understand the rules of the game it is important to identify the “Why”. Why are we doing all this? What is the overall goal of our service supply chain? Is it about optimizing uptime, operational cost or working capital? In most cases the key word here is balance. Balancing uptime, operational cost and working capital. This balance can be different per environment. Understanding that these ultimate service supply chain goals should be leading in each of the service supply chain chackles is key here. How to do that? Start communicating amongst all the actors in the supply chain!

Align objectives

Communication is the first step in aligning the objectives of the service supply chain chackles with the overall service supply chain goals. Understanding how each of the chackles influences the outcome at the end of the chain enables another way of doing business with each other. It also provides a basis to optimize the chain in stead of sub-optimizing each chackle. Get rid of minimum order quantities, or long lead times if that is at the end more profitable for the complete chain. If that means we must pay more per part that is fine! If we truly understand what our aligned objectives are we can start optimizing.

Start optimizing

Real optimization can only be achieved if the complete chain is transparent. Transparent in terms of demand, costs, constraints, dependencies et cetera. During the game we discussed the following optimization topics:
• Should we increase our parts inventory?
• Should we shorten our delivery lead times?
• Should we balance the production flow?

You will probably recognize these topics from your own experience. Interesting here is that real optimization came from discussing the effect of the options throughout the chain. In that way every optimization that we mutually agreed upon proved to be a real optimization at the end of the chain.
Did that put pressure on “the rules of the game” and the objectives and targets in every part of the supply chain? Yes of course, but by understanding the real value of every optimization agreed upon we were able to truly optimize the overall chain. As a result we beat the competition by far.

Master the game

My conclusion after playing several rounds of the game is that the first thing we must do in real life is to stop sub-optimizing individual service supply chain elements. If we really want to become masters of the game in the world of asset management, we must start playing the game in the right way. A first step in that direction is to gain insight in the service supply chains you are part of. Using a serious game like the one we used, is one (fun) way to do that. Are you interested in playing our game together with the service supply chain stakeholders within your organization and beyond? Give us a call. We will be more than happy to help you play the game.

[1] together with Jos Thalen (Invocate) and Joost Florie (Florie Logistiek Advies)

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Ramón de Rooy
Managing Consultant