The (Board) Gamer’s Guide to Supply Management Part II: The Settlers of Catan

I’m very excited to continue this brand new summer series that will help you whether you are just interested in finding out about this new and exciting career opportunity or ready to take your Supply Management career to the next level. Learning Supply Management doesn’t have to be as fun as watching paint dry — it can be much more fun! And when you can grasp some of the basic concepts playing a strategic board game with your friends, it’s a blast.

While Settlers of America Trails to Rails (also put out by Catan) might be a better choice to follow Ticket To Ride, that we introduced in last week’s post, The Settlers of Catan is also a great game to include in our series, and, more importantly, there is another great TableTop episode, again hosted by the one, and only, Wil Wheaton In Exile on Twitter. And since the best way to learn a new game is to see it in action until you are familiar with other board games in the same vein, we’re going to take advantage of the priceless gift that Mr. Wheaton has given us.

In TableTop Episode 2, Wil Wheaton uses Settlers of Catan, a modern day classic that has sold hundreds of millions of copies, to introduce us to the joys of trading wood for sheep. What could be better?

As with Ticket to Ride, the rules are fairly simple. As explained by Wil:

      We are settlers on the legendary island of Catan. The first person to reach 10 victory points wins the game. You get victory points by collecting and managing resources. You get resources when one of the settlements you have built is adjacent to a tile that has spawned a resource. We find out which tiles spawn resources every turn by rolling dice. No one will have enough resources on their own to build the roads, settlements, and cities they need to win the game. So we will all have to barter and trade with each other. Just like in real life, there are nasty surprises waiting for you. Whenever we roll a seven, the robber gets activated. He steals from you. We hate the robber. The robber is a dick. But if you get robbed, it’s not the end of the world. There are other ways to get victory points — having the longest road, having the largest army, or you can also trade in resources to buy [these] development cards (which may also give us victory points).

Sounds easy, right? So where is the difficulty? Some resources are more likely to be spawned than others, as each of the 18 non-desert hexes have different numbers associated with them from 2 to 12 (excluding 7), and, according to probability, hexes with sixes or eights are more likely to be rolled and spawn their resources. Plus, there are five different resource types (brick, wood, wheat, sheep, and stone), and each type of building requires multiple resource types. A road requires wood and brick; a settlement (worth one victory point) requires wood, brick, wheat, and sheep; and a city (which is built on top of a settlement and worth two victory points) requires two wheat and three stone. As such, you need to strategically position your settlements to maximize the chances of getting the resources you need, but you can’t place settlements just anywhere. They can only be at hex boundaries and there must be a road of length at least two between any pair of settlements on the board. Or, if you don’t have good placement opportunities for your settlements that would allow you to maximize your chance of getting resources (by placing the settlement on a corner between three hexes with decent roll probabilities), you can try to build on a port that gives you better than average trading opportunities. (In the game, you can always trade four resources of the same type for a resource of any other type with “the bank”*, but some ports reduce this to three for one, and some ports allow you to trade specific resources two for one. This is very useful near the end of the game when your opponents are unwilling to trade with you if they see you nearing victory.)

The only other relevant rules are that if you build the longest road (of length five or more), or amass the largest army (of three or more knights, which are mixed in with the development cards), you gain two victory points and if you are lucky enough to draw a monopoly card when you purchase a development card, you can play it down and every other player has to give you all cards of the resource type you name.** And if you roll the robber, everyone (including you) with 7 or more resource cards has to lose half, but you get to move the robber to any hex and steal a (random) resource from a player with a neighbouring settlement (or city).

So what are the parallels with Supply Management? In Supply Management:

      We are Supply Chain Professionals doing business in the global marketplace. The first of us to secure and deliver all of the products and services we need to meet all of the customer demands wins the game. We secure the products and services we need by managing suppliers and reserving limited production and distribution capacity. We find out which resources are limited by watching the market and taking note of tumultuous events. In today’s marketplace, no supplier will be able to meet all of our component or service needs on their own, so we will not only have to barter and trade with multiple suppliers, but also with our competitors and their suppliers in tight markets. And there will be nasty surprises waiting for us. A natural disaster may wipe out part of the raw material supply or Somali pirates may seize a precious shipment. We hate the pirates. They are dicks. But if our shipments get robbed, it’s not the end of the world. There are other ways to serve our customers. We can use the insurance money to buy from someone else, we can redesign our products to use alternate materials, or we can focus on a new or different substitute product or service to get us, and our customers, through the worst of times.

And just like in Catan, some resources will be more readily available than others. We will need different resources (from different suppliers) to assemble our complex product and service offerings, strategic reservation of production capacity and distribution capacity will give us a major competitive edge over our competition, and the more international trading capability we have at our disposal, the better trades we are going to be able to make (as some countries value wheat, lumber, or brick more than others, depending on whether they are short on building materials or food). The more trade lanes we have access to, the more markets the organization can serve; acquiring a monopoly on a certain product or service in a region, even for a limited time, gives us a significant edge in negotiations (as long as it’s not in violation of local laws), and keeping individual shipment value down can limit losses in the event of a robbery.

So what does The Settlers of Catan teach us?

  • if we are gamers new to the subject matter, it teaches us that successful Supply Management requires a lot of skill as we have to balance investments in (new) product development (settlements and cities) and logistics capacity (roads); we have to optimize local distribution (inner placement) hand-in-hand with global distribution (port placement); and we have to try and keep our competitors from locking up too much of available capacity in critical trade lanes (longest road) or production (largest army) and, most importantly, that we will have to do a lot of negotiating to succeed.
  • if we are new Supply Management professionals looking to improve our Supply Management game, it allows us to practice our negotiation skills and see how the negotiations change depending on the supply/demand imbalance for the raw materials and our relative strength in the marketplace (as your opponents will typically be very open to trading with you to mutual advantage if they are in the lead but very reserved if you are in the lead and the trade is perceived as advancing you [closer] to victory).
  • if we are seasoned Supply Management veterans, it helps us understand the strength and weaknesses of different Supply Management strategies. For example, if we focus on inland building to maximize the chances of resource spawning every turn, we are giving up any chance to guarantee low-cost trades later in the game (as we will not be building on ports). And if we focus on the ports, while we may be able to trade many resources cheap, we may never acquire enough resources to trade. If we focus on pure settlement and city building, an opponent may be able to sneak in and win the game with only two settlements (2 points) and one city (2 points) if they took a development strategy and secured the longest road (2 points), largest army (2 points), and two victory point development cards (2 points). It allows us to work on our strategic planning skills and notice that for every strength we achieve with a strategy, there is always a weakness that can be exploited by our competition with the right counter-strategy. And the better we understand the strengths and weaknesses of our strategies, the better we can adapt them and monitor them over time.

It’s a great game, and if you can’t wait to get started, I have great news if you own an iOS device. Catan for iOS is available in the App Store — although I must admit its a bit hard to play on the iPhone/iPod touch as you constantly have to zoom in and out. Now go forth and settle!

* which is a term you Monopoly (which we will not be including in this series) players are familiar with
** which has the opposite effect of the Mod card in Uno Mod for you Uno players