Learning hub
Why supply chains ripple
Five short ideas behind the game. Each takes about two minutes to read.
01
The bullwhip effect
Small changes in end-customer demand become ever larger swings in orders the further you move up the supply chain. In the classic game, demand changes once — from 4 to 8 — yet factory orders often jump to 30 or more, then collapse to zero.
It is not caused by bad luck or bad people. It is caused by the structure: delays, local information and the way humans react to shortages. Everyone makes sensible local decisions, and the system still oscillates.
Play the classic game02
Lead time and the supply line
Between placing an order and receiving the goods, time passes: the order travels to your supplier, they ship, the truck drives. Everything already ordered but not yet received is your supply line (pipeline).
The longer the lead time, the more units sit in the pipeline — and the easier it is to forget them. Sterman (1989) showed that players systematically underweight the supply line: they keep ordering while shortages last, and are then flooded when all those orders arrive.
03
Inventory position
Inventory position = on hand − backlog + supply line. It answers the question: "If nothing else changed, how much would I end up with?"
Base your orders on inventory position, not on on-hand stock. A stock-out today is already being fixed by the orders in your pipeline; ordering more on top of that is the classic over-reaction.
04
Order-up-to (base-stock) policies
A simple, robust rule: choose a target S for your inventory position, then each week order enough to bring it back up to S. A common target is S = expected demand × (lead time + 1) + safety stock.
Ripple's debrief benchmark re-plays your game's demand with every stage following such a policy. It is not perfect, but it shows how much of your cost came from the ordering behaviour rather than from demand itself.
Play with hints on05
Information sharing and VMI
Much of the bullwhip comes from each stage forecasting from the orders of the stage below — a distorted, delayed signal. Sharing point-of-sale (POS) data lets everyone forecast from real demand.
Vendor-managed inventory (VMI) goes further: the supplier sees the customer's stock and decides the replenishment. Play the POS scenario after the classic one and compare your bullwhip ratio.
Play with POS sharing