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There is little consensus on the term ‘simulation’ in the literature. Many

authorities tend to place role playing and gaming within the context of simulation.

The following summarises the three simulation terms which are used frequently

in supply chain management: computer simulation, role playing and games.

3.1.1.1 Computer simulation

Physical simulation has many cost-related and technical limitations when

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Xin Wang Page 43 Many industry solutions such as MRP and ERP, which provide many benefits in

supply chain management, can be an ideal solution to simulate a supply chain;

however, it is too expensive to use them in supply chain simulations. A computer

simulation is an ideal method to simulate a supply chain, due to its flexibility in

dealing with the complicated variables suggest a number of experts (Jia and Zuo,

2010).

Computer simulations can model supply chain processes, especially information

flows, financial flows, and material flows, to evaluate and predict supply chain

performance prior to system implementation. They can also support decision-

making by implementing a ‘what-if’ analysis to compare various alternatives

without interrupting a current system (Thierry et al., 2010). The simulation is usually designed as an interactive tool to support decision-making in supply

chain management. However, it is very difficult to simulate human factors in a

computer simulation. It is hard to ignore the human motivations and actions in a

real supply chain. Since these human factors can totally dominate supply chain

operations often role playing simulations are used to simulate this behaviour.

3.1.1.2 Role playing

Role playing involves participants immersing themselves in a simulated business

environment by playing the role of a business or process owner (Feinstein et al., 2002). It requires the participant to follow a set of rules that define the current

situation, and to make decisions after interacting with others. In this way, the

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Xin Wang Page 44 a supply chain. However, the results from these simulations could be very

subjective since each decision relies on the interactions of other participants who

often exhibit learning curves and learning effects well as many other types of

human interaction behaviour. In addition, a lack of control during the simulation,

and high cost are often major limitations to implementing a role playing

simulation.

3.1.1.3 Games

The Beer Game is the most famous simulation game in supply chain

management. It was created in the 1960s by the Massachusetts Institute of

Technology (MIT) to show students some key principles of supply chain

operation (Goodwin and Franklin, 1994). It has been employed in many areas in

supply chain management, and has proved to be a very effective and powerful

tool to help supply chain managers to understand supply chain interdependencies.

According to Feinstein et al. (2002), most management games are round-based or turn-based. In these games, the participant is required to form strategies based

on the current situation in the first round; in a new round, the strategies are

normally modified, based on the changed variables. The games normally repeat

for a number of times to generate a result. The reward generally is given to the

most profitable participants.

It is very difficult to simulate a dynamic business environment in these types of

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Xin Wang Page 45 based on the result of the last round, not on the situation in the current round. It is

difficult for the participants to appreciate how their decisions have interacted

with the others until a new round. Furthermore, it can be too complicated to

create a “what-if” analyse in the game simulation (Feinstein et al., 2002).

In order to better evaluate the effect of visibility on supply chain LeAgility, tight control on variables and “what-if” capability are required to test many different

scenarios. None of these three types of simulation are fully effective in this case.

Therefore, a hybrid simulation model, which combined the advantages of role

playing games and computer simulation, was designed to replicate the business

environment and incorporate the human factors that appear in real supply chains.

The hybrid simulation model was partly used to help the participant to learn to

manage real time data in order to optimise their decision making. It was possible to include “what-if” analyses to test different scenarios in a shorter period with a

lower error level using this approach. In addition, the ‘learning effect’, which can

be recognised both as a weakness and an asset of a role playing simulation, may

be controlled by switching or not switching user roles.

The debate about using the hybrid simulation or computer simulation is ever-

present in this research. Good computer simulations require clear hypotheses

with simulators being designed accordingly. It is necessary to design and control

each variable in order to output valid results. Since the output of the simulation

in this research is stochastic, an experimental design is required firstly to test all

the hypotheses that are developed. In this way, the result will show the impact of

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Xin Wang Page 46 real supply chains are controlled by humans, and human decision making

activities cannot be realistically simulated by any computer. This is a major

reason for choosing a hybrid simulation.