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
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.