Systems thinking and business process redesign: An application to the beer game

Abstract

Managers are regrettably ignorant of the fact that their business organisations are ‘designable’. But recently, concepts such as business re-engineering and systems thinking, coupled with advances in methods of quantifying business systems, have enabled managers to scrutinise their business systems afresh. Ann van Ackere, Erik Reimer Larsen and John Morecroft use a well-known logistical system — the ‘beer game’ — to illustrate these re-engineering concepts and tools in a multi-stage production and distribution system involving a single brand of beer. This business game raises the fundamental question of why it is so difficult to match shipments and factory production to consumer demand. The authors conclude that such re-design concepts and tools can be applied successfully to full-scale business problems. Systems thinking, modelling and continuous time simulation can provide the framework for carrying the design process from mapping all the way through to redesign. The most effective CEOs of the future will be those who are competent to create corporate design in which employees are allowed to succeed.