The Dice Game: Learning About Business with a Simple Roll

 

The Dice Game: Learning About Business with a Simple Roll

Have you ever wondered why things don't always go smoothly in a factory or any process where one step depends on another? A simple game using dice, known as Goldratt's Dice Game, brilliantly shows the challenges that businesses face due to these dependencies and the natural ups and downs of any operation. This article explains how to play, what surprising results you might see, the valuable lessons it teaches, and how these lessons apply to the real world of business.

How to Play the Dice Game

Imagine a small production line with several workstations, represented by players sitting in a row. The basic game involves five players, but you can have more or fewer. Here's how to play:

1. Each player gets a die: Each person receives a standard six-sided die. This die represents the potential output of their workstation in a given time period (a 'round'). The number rolled is how many units they could process.
2. Start with 'inventory' (for everyone except the first): Everyone except the first player should have a bowl. These bowls represent the work-in-process inventory – items waiting to be worked on. The first player (let's call them Andy) has an unlimited supply of items (like matches in the original game).
3. Play in rounds: The game proceeds in rounds, and players take turns in order.
   • Andy starts: Andy rolls their die and moves that many items into the bowl of the next player (Ben).
   • Subsequent players: Ben then rolls their die. They look at the number they rolled and the number of items in their bowl. Ben can only move on to the next player (Chuck) the smaller of these two numbers. For example, if Ben rolls a 5 but only has 3 items in their bowl, they can only process and pass on 3 items. Their potential to produce 5 was limited by the lack of work.
   • This continues down the line: Each player in turn rolls their die and moves the minimum of their die roll and the items in their bowl to the next player's bowl.
   • The last player: The final player (Evan) also rolls their die. They then move the smaller of their roll and the items in their bowl out of the system.
4. Measure the 'throughput': The number of items that leave the final station (Evan) in a round is the throughput of the entire production line for that round. It represents the number of completed products.
5. Play multiple rounds: To really see the effects, the game needs to be played over many rounds. You keep track of the throughput in each round to calculate the average over time.

Expected vs. Unexpected Results

You might expect that if each player can potentially produce an average of 3.5 units per round (the average of a six-sided die), then the whole line should also produce around 3.5 units per round. However, this is often not the case.

• The 'degradation' of throughput: What you'll likely observe is that the actual throughput of the system is often lower than the theoretical potential. This 'degradation' happens because of the combination of two things:
  • Dependent events: Each workstation relies on the one before it to provide work. If one station has a slow round, the next might run out of things to do.
  • Statistical fluctuations: The random nature of the dice rolls means that output at each station varies from round to round. Sometimes a station produces a lot, sometimes very little, creating imbalances in the flow.
• Larger capacity isn't always better: Surprisingly, just giving players bigger dice (representing higher potential capacity) doesn't automatically lead to the best results. While a larger die could mean more output, it also introduces more variability (a wider range of possible outcomes). This increased variance can actually worsen the degradation and lead to lower overall throughput and profit if the costs of the larger capacity outweigh the actual throughput increase.
• The power of reduced variability: Interestingly, a capacity option with lower variance (even if the average potential is the same) can lead to higher throughput. For example, using a coin flip that results in an output of 3 or 4 consistently can be better than a six-sided die with an average of 3.5 but more erratic results.

Learning from the Dice Game

Playing the Dice Game provides several key insights relevant to managing any process:

• Dependencies amplify problems: The game clearly shows how the interconnectedness of steps in a process means that problems or slowdowns at one point can have a ripple effect throughout the entire system.
• Variability is the enemy of flow: The random nature of the dice highlights how unpredictability in any part of a process can disrupt the smooth flow of work and reduce overall output.
• Inventory as a buffer: The bowls of inventory act as buffers between workstations. Having some work waiting can help a station keep working even if the previous station has a slow round. However, the game also shows that adding too much inventory comes with costs and the benefits eventually diminish.
• The bottleneck dictates the pace: The station with the lowest effective capacity at any given time acts as the bottleneck, limiting the output of the entire system. Improving the bottleneck is the most effective way to increase overall throughput.
• Location of the bottleneck matters: The game suggests that if you have a bottleneck, it's generally better to have it at the beginning of the line. This allows subsequent stations to potentially work at their full capacity when the initial bottleneck does produce, and inventory can build up after it. A bottleneck at the end can easily starve the entire system before it.

Practical Lessons for Businessmen

The seemingly simple Dice Game offers powerful lessons for anyone running a business or managing a process:

• Understand your dependencies: Identify how different parts of your operation rely on each other. Weak links or unreliable steps can significantly impact overall performance.
• Manage variability: Look for sources of variability in your processes (e.g., unreliable suppliers, machine downtime, inconsistent demand). Implementing measures to reduce this variability can lead to more predictable and efficient operations.
• Strategic use of buffers: Consider where holding some 'inventory' (which could be physical goods, information, or even available staff time) can help insulate your process from the negative effects of variability and dependencies. However, be mindful of the costs associated with holding too much buffer.
• Identify and focus on your bottlenecks: Determine the constraint that is limiting your overall output. Efforts to improve this bottleneck will have the biggest impact on your system's performance.
• Don't just chase higher capacity: Investing in more resources or higher potential output might not be the best solution if variability isn't managed. Sometimes, focusing on consistency and reducing disruptions can yield better results.
• Simulate and test: Before making significant changes to your processes, consider using simulation techniques (like the Excel-based version of the Dice Game) to understand the potential impact of your proposed improvements in a safe and cost-effective way.

In conclusion, Goldratt's Dice Game is more than just a bit of fun with dice. It's a powerful tool for understanding the fundamental principles that govern the flow of work in any system. By experiencing the impact of dependencies and statistical fluctuations firsthand, players gain valuable insights into how to manage real-world business operations more effectively, focusing on flow, managing variability, and strategically addressing constraints.