Case Study 3: Operate a Manufacturing Company

1. Case Study 3:Operate a Manufacturing Company EGN 5621 Enterprise Systems Collaboration (Professional MSEM)Fall, 2011

2. The objective of the Manufacturing introductory ERPsim is to provide a quick hands-on experience of an integrated business process through an ERP manufacturing ERPsim, which combines basic operation functions, such as planning, sales, production, procurement, marketing, investment, and financial accounting for learning how to make business strategy and business decisions. Objective

3. Corporate Roles Designation • CEO (Team Leader) • Watch financial statement • Check Price market report • Check summary sales report • Check sales and market data • Check inventory Report • Marketing & Sales Manager • Maintain selling prices • Make marketing expense planning • Check sales report • Check summary sales report • Check Price market report 3

4. Corporate Roles Designation • Production & Planning Manager • Create planned independent Requirements • Run MRP • Convert planned order to production orders • Check production schedule • MM Manager • Generate Purchase orders from purchase requisitions • Track purchase orders • Check MRP results • Check individual stock level • Check inventory Report 4

5. Operations in the cash-to-cash cycle

6. The Virtual Business Environment Simulation of a market Automation of administrative tasks Simulation of the passing of time

7. Organizational elements

8. Organizational elements

9. Organizational elements

10. Organizational elements

11. Data model of the main master data used in the simulation game

12. Definition of master data (1/2)

13. Definition of master data (2/2)

14. List of master data to create for the simulation

15. Wheat Oats Nuts Raisins Blueberries Strawberries Muesli Cereals

16. 40% wheat 40% oat 20% nut 1 box 1 bag 40% wheat 40% oat 20% raisin 1 box 1 bag 40% wheat 40% oat 20% blueberry 1 box 1 bag 50% wheat 50% oat 1 box 1 bag 35% wheat 35% oat 10% raisin 10% nut 5% strawberry 5% blueberry 1 box 1 bag 40% wheat 40% oat 20% strawberry 1 box 1 bag Your 6 products

17. Data model of product Y$$-F06

18. North DC10: 2 retailers DC12: 19 retailers West DC10: 3 retailers DC12: 17 retailers South DC10: 7 retailers DC12: 23 retailers German market

19. Muesli Manufacturing Association Label Regulation

20. Input Costat low seasonal price

21. Number of stores by geographical area

22. Buy only large boxes (1 kg) • Payment delay of 20 steps • More sensitive to price • Less sensitive to advertising • Will have a stronger preference for 3 particular products during the simulation DC10Hypermarkets

23. Buy small boxes (0.5 kg) and large boxes (1 kg) • Payment delay of 10 to 15 steps • Will have a stronger preference for 4 particular products during the simulation DC12Grocery chains

24. Only buy small boxes (0.5 kg) • Less price sensitive • Sensitive to advertising • Payment delay of 5 to 15 steps • Will have a stronger preference for 3 particular products during the simulation DC14 Independent grocers(will be used in Extension ERPsim)

25. Number of retailers per Locations

26. Risk premium on credit ratings

27. Production improvements(will be used in extension ERPsim)

28. You don’t change the recipe of a product in the mfg introduction game • Customers preferences do not change throughout the game, hence you may learn from their past behavior • The company displaying the highest shareholder’s equity at the end of the simulation wins the game • You must behave ethically at all times • The end of game inventory will be value at cost price in the final balance sheet. Therefore, you shouldn’t sell under cost at any time during the game. Review of the major rules

29. Use the ERP system efficiently • Do not run out of stock • Delays and production capacity constraints are important elements of the game • Team organization is more important than you think Elements of a winning strategy

30. 30 min 30 min 30 min 30 steps 30 steps 30 steps Game layout

31. Each round will be of 30 steps (approx 1 min per step) • End-of-round inventory is carried over to the next round • You can sell a product only if you have it in stock • You compete against the other teams and importers • Your objective is to maximize profit Rules of the game

32. Participant’s job aid

33. Create your team : • Max 4 persons : User 1 to User 4 • Up to 26 company : A to Z • Log in using user name and passwords giving by your teacher Let’s get started!

34. Client 265 Login : intro_$# $ = Team, # = User 1 to User 4 Password: ERPSIM Login information

35. SAP Menu & Navigation

36. Introductory Game: Round 1 30 min 30 steps

37. Cost, inventory & initial pricing

38. You have initial inventory for each finished product (100,000 for each) • You only can sell your products in Q1. • You can’t buy any raw materials in Q1. • You can’t make plan and produce any finished goods in Q1. • You need to maintain the price of your 6 products and invest in marketing. • You need to know how to : • Maintain price list and make plan for marketing investment • Watch available stock • Monitor sales orders • Monitor your profit ! The Introductory game:Round 1 (30 steps- days)

39. Participant’s job aid & Menu

40. Check product costing

41. Maintain Prices for DC 10 & 12

42. Marketing expense

43. Stock in material overview

44. Check sales summary report

45. Check sales order report

46. Check market report

47. Check Financial Statements

48. We start the simulator for 30 steps The Introductory game:Round 1 (30 steps – 30 days)

49. Introductory game: Round 2 30 min 30 steps

50. You finished goods will be carried over to the round 2 if your still have inventory in the end of the round 1. • You have two planned orders in total 100,000 for each product. • You have initial raw materials which are enough to make 100,000 of your each product. • You need to decide the sequence for conversion of your planned orders to production orders. • You can’t buy any raw materials in Q2. • You can produce your products in Q2 by converting planned orders to production orders. • You continue to maintain your prices and make investment in market. The Introductory game:Round 2 (30 steps- days)