In another, they had full information about inventory quantities at every level in the channel. In one simulation, students had little knowledge of inventory levels other than those for the company they were managing. Fluctuating demand at the retail level would generate exaggerated fluctuations-a “whipsaw” effect-in expected demand and inventory planning at the back end, or manufacturing level, in an effort to meet possible future demand.
In my approach, my Ohio State students managed inventory at various levels in a distribution channel. One thing that may have helped generate the HBS offer was an experiment I performed using my own crude version of what would become known as the “beer game.”
One of my interests: The value of improved inventory information in a distribution channel on overall inventory levels and costs. "The result, of course, was what came to be known as 'just-in-time' inventory management, as championed by firms such as Toyota." In those days, there was fascination with air freight and the trade-off of inventory and transportation costs-as in spending more for air transport in order to spend less on owning inventory, thereby optimizing what we called the “total cost curve.” (I can still draw those curves in my sleep.) A plentiful supply of “safety stock” was the order of the day for those using slower forms of transportation. I was invited to join the HBS faculty not to teach marketing, service management, or general management, among my later teaching assignments, but to help breathe life into efforts to teach logistics. It’s a throwback to the days when railroad management was all the rage in the original Harvard Business School curriculum among those interested in studying business in 1908. Logistics issues have taken on unexpected and possibly unwanted “glamour” among those who study business and economics, thanks to the COVID-19 pandemic and its global aftermath.
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