How the Coffee Trade Simulation Builds Real-World Supply Chain Skills

Developed by Arizona State University in partnership with Forio, the Coffee Trade simulation brings supply chain management to life through experiential learning. In this interactive exercise, students and professionals step into the roles of buyers and suppliers, negotiating contracts, managing relationships, and navigating the complexities of an industry reliant upon global trade. The result is a realistic, data-driven environment that bridges theory and practice, helping university and corporate students develop the critical thinking, communication, and decision-making skills essential in today’s supply chain and business management fields.

What makes the Coffee Trade Simulation especially challenging (and especially powerful) is its breadth. It functions simultaneously as a team building exercise, a negotiation simulation, a supply chain simulation, a contract simulation, and a communication simulation. Participants are not solving a single, isolated problem; they are navigating an interconnected system in which decisions about pricing, quality, relationships, and communication ripple across multiple rounds.

As a result, no two runs of the simulation unfold the same way, and outcomes vary significantly depending on how players collaborate, negotiate, and adapt to changing conditions.

The Purpose: Building Real-World Negotiation Skills for Supply Chain Students

The idea for Coffee Trade emerged from necessity. I was selected to teach a research and negotiations class for senior supply chain students. As with all of my courses, I considered how to create an interactive component for the class. I realized that our business students lacked real-world negotiation experience, yet, many would be asked to negotiate for their soon-to-be employers upon graduation. As well, our industrial advisor board stated that new recruits lacked an understanding of contracts, a cornerstone of many buyer-supplier relationships.

All of this inspired me to create a simulation where agreements would be made student-to-student, rather than student-to-computer. That was more realistic, but also challenging because many of the student negotiations were to occur outside of class. The simulation, therefore, required a communication tool as well as a contracting tool.

Relationships were also key to emphasize, so the simulation had to run multiple rounds, keep track of results, and allow everyone to experience both buyer and supplier roles. A simple thing had become complicated.

The Prototype: Building and Testing the First Coffee Trade Simulation

I developed the first iteration of the simulation with my doctoral student at the time, Sining Song – now an Assistant Professor of Supply Chain Management at the Robert H. Smith School of Business – in which students bought and sold “alphas,” “betas,” and “gammas.” At the time, a mish-mash of complementary platforms were brought together to serve different purposes:

• Blackboard^© enabled the communication
• Digital Purchase Order^© created the contracts
• Microsoft Excel^© crunched the numbers
• Microsoft Word^© mail merged the results.

It was cumbersome, time consuming, fraught with errors, and then surprisingly…it worked!

The students enjoyed it, but the work wasn’t done. The prototype still needed refining to create a smoother experience for students and make the simulation scalable.

Why Coffee? Exploring Its Role as the Ideal Supply Chain Scenario

While explaining the game to my then fiancée, she kept wondering what was actually being sold.

What is an “alpha”?

My weak, abstract explanation led to a conversation that eventually allowed the idea of the coffee bean industry to emerge as an ideal model for the simulation.

• It has multiple stages that require multiple player roles, like harvesting, roasting, and blending.
  
• Coffee has a great variety of types and grades to give complexity.
  
• It is something that dreary-eyed supply chain students know well.
  
• It accommodated multiple story lines about moldy beans and unhappy baristas.
  
• Contracts needed quality warranties and remedies had to be made.

With the help of more grad students, the second iteration was complete! But it was still too much work.

Partnering with Forio to Build an Online Supply Chain Negotiation Simulation

We gained support from our department chair, John Fowler, and our advisory board to hire a programmer for an online, self-contained simulation. This launched a discovery process to find the right partner, which proved to be Forio. With a proven track record for developing business training simulations on its Epicenter platform for Harvard, Stanford, and other world-renowned institutions, Forio was the right fit to develop and host the Coffee Trade Supply Chain Management simulation.

With time pressures mounting and budget squeezing, the team at Forio worked with me to alleviate wrinkles and focus all of my convoluted ideas to finish the simulation. The launch in 2015 was a great success with even more enthusiasm from students. Of course, refinements have been needed. As a result, we are now on Coffee Trade version two.

What’s Next for the Coffee Supply Chain Simulation: From Classroom Pilot to Real-World Learning Tool

To date, thousands have played Coffee Trade. Other universities outside ASU rely on the simulation in their supply chain management classes, including Michigan State, Penn State, and Georgia Southern University.

The newest version highlights multi-party negotiations, dispute resolution techniques, relationship management practices, and other core business communication and collaboration skills.

The coffee business is good for the education business. Without the help of the dynamic team that brought this together, the Coffee Trade Simulation from ASU would not be a reliably fun, interactive, and educational tool.

Preview This Simulation