Overview and Case Study 2: ERPsim Manufacturing (I)

1. Overview and Case Study 2:ERPsim Manufacturing (I) EGN 5621 Enterprise Systems CollaborationFall, 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 • Price market report • Check summary sales report • Check sales and market data • Check inventory Report • Marketing Manager • Marketing Expense Planning • Price market report • Check sales and market data • Sales Manager • Change price • Check summary sales report • Check sales and market data • MM Manager • Forecast – create planned indep. Req. • MRP run • Automatic generation of POs • Purchase Order Tracking • Check inventory Report 3

4. Operations in the cash-to-cash cycle

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

6. Organizational elements

7. Organizational elements

8. Organizational elements

9. Organizational elements

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

11. Definition of master data (1/2)

12. Definition of master data (2/2)

13. List of master data to create for the simulation

14. Wheat Oats Nuts Raisins Blueberries Strawberries Muesli Cereals

15. 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

16. Data model of product Y$$-F06

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

18. Muesli Manufacturing Association Label Regulation

19. Input Costat low seasonal price

20. Number of stores by geographical area

21. 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

22. 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

23. 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)

24. Number of retailers per Locations

25. Risk premium on credit ratings

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

27. Each team has 3 warehouse storage areas: • Finished product - space for 250,000 boxes • Raw materials - space for 250,000 kg • Packaging - space for 1,000,000 boxes and space for 1,000,000 bags • Additional warehouse space can be rented: • 100,000 boxes (or part thereof), @ € 200/step (less than € 0.01 per box per step) • 100,000 kg (or part thereof), @ € 350/step (more expensive because it's raw food product) • 100,000 boxes AND/OR bags (or part thereof), @ € 50 step Warehousing costautomatically charged

28. Fixed costs per week

29. You may not change the recipe of a product if you are still carrying inventory • 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

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

31. 30 min 30 min 30 min 30 steps 30 steps 30 steps Game layout

32. 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

33. Participant’s job aid

34. 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!

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

36. SAP Menu & Navigation

37. Introductory Game: Round 1 30 min 30 steps

38. Cost, inventory & initial pricing

39. You need to maintain the price of your 6 products and invest in marketing. • What do you need to know in order to make that decision ? • You need to know how to : • Maintain price list • See available stock • Monitor sales orders • Monitor competitors • Monitor your profit ! The Introductory game:Round 1 (30 steps- days)

40. Participant’s job aid & Menu

41. Check product costing

42. Maintain Prices for DC 10 & 12

43. Marketing expense

44. Stock in material overview

45. Check sales summary report

46. Check sales order report

47. Check market report

48. Check financial statements

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

50. Introductory game: Round 2 30 min 30 steps