The forest products industry is one that includes all the mills that produce and transform wood and wood products. In this industry, the value creation cycle from the forest to the end customer is long and complex. Each enterprise in the value creation network is an independent decision making unit and this can result in a lack of synchronization of operations. However, information is an important tool when managing the value creation network. Incomplete and incorrect information causes delivery problems (the right products available at the right place and at the right time) and customer satisfaction.
The Wood Supply Game simulates the operations in the forest product supply chain in order to demonstrate the dynamics at work in the value creation network and show the importance of information sharing between enterprises.
Each game is played with a maximum of 7 people, each responsible for the management of one enterprise in the network. Each round in the game represents one week. Each game is between 25 and 50 weeks long. The supply chain is represented by different downstream business units of the end customer. These units are: the forest, the sawmill, the paper mill, the distributors and the retailers. The divergent nature of the forest products industry supply chain is simulated by dividing the material produced at the sawmill into chips and lumber.
In this workshop, players must try to minimize inventory and backorder costs. Each business unit has a “warehouse” and each item in that inventory has a carrying cost. Each week managers of every enterprise must decide the amount of items to order from their supplier, in order to have a good level of customer service and minimize inventory costs.
Customer service levels are measured by the availability of products in the right place and at the right time. If products are not available when the client’s order is received, a lost opportunity cost is calculated.