Case Study 3: Operate a Manufacturing Company (Introduction)

1. Case Study 3:Operate a Manufacturing Company (Introduction) EIN 6133 Logistics Engineering Summer B, 2015

2. The objective of this manufacturing case study is to provide a hands-on experience of an integrated business process in the simulated environment, which integrates basic operation functions of planning, sales, production, procurement, marketing, and financial accounting for learning how to run a manufacturing operation and make business decisions. Objective

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

4. Corporate Roles Designation • CEO (Team Leader) • Review financial statement • Coordinate operating activities • Review price market report • Review summary sales report • Monitor sales and market data • Review inventory Report • Sales & Marketing Manager • Change sales prices • Plan marketing expense • Provide advices to material manager for forecasting • Review sales and market data • Check summary sales report • Review price market report 4

5. Corporate Roles Designation • Production Planning Manager • Create planned independent requirements • Run MRP to create: 1) purchase requisitions (PRs) for raw and packing materials, and 2) planned orders for finished products. • Convert purchase requisitions to Purchase orders • Track purchase orders • Analyze product cost • Material Manager • Review planned orders for each product • Control and release production orders if required raw materials are available • Monitor production schedule • Track purchase orders • Check inventory report 5

6. Operations activities

7. Organizational elements

8. Organizational Elements

9. for Extended Mfg Organizational Elements for Extended Mfg

10. $$ - 10 - 00 $$ 00 10 $$ 12 $$ - 12 - 00 $$ $$ $$ 00 $$ 12 for Extended Mfg $$ - 14 - 00 14 Organizational Elements 00 14

11. Master Data Used in this study

12. Definition of Master Data (1/2)

13. Definition of Master Data (2/2)

14. 2 List of Master Data

15. Muesli Manufacturing Association Label Regulation

16. Wheat Oats Nuts Raisins Blueberries Strawberries Muesli Cereals

17. 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

18. Product Design and German Market

19. $$-P01 $$ $$-P02 $$-R01 $$-F06 $$-R02 $$-F06 $$-F06 $$-R03 $$-R04 Data Model of product $$-F06 $$-R05 $$-R06

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

21. Input Cost at Low Seasonal Price

22. Number of Stores by Geographical Area

23. 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 DC10: Hypermarkets

24. Buy large boxes (1 kg) and small boxes (0.5 kg, only for Mfg Extended case) • Payment delay of 10 to 15 steps • Will have a stronger preference for 4 particular products during the simulation DC12: Grocery Chains

25. Number of Retailers Per Locations

26. Risk Premium on Credit Ratings

27. You don’t change the recipe of a product in this mfg introduction game • Customers’ preferences do not change throughout the game; you may like to 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. Major Operation Rules

28. Develop your team’s operations strategy • Monitor and modify the strategy, when necessary • Use the ERP system efficiently • Do not run out of stock • Be aware of delays and production capacity constraints • Team organization and communication are important. Operations tips

29. 15 min 15 min 15 min 30 steps 30 steps 30 steps Game Layout

30. Each round will be of 30 steps (approx 0.5 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 Game Rules

31. Participant’s job Aid

32. Create your team : • 3 – 4 persons • Up to 26 company : A to Z • Develop your team’s operations strategy • Log in using user name and password given by the instructor Let’s Get Started!

33. Client 445 Login : $# $ = Team, Pilot run: A, B, C, D Real run: E, F, G, H # = User 1 to User 4 Password: ERPSIM Login Information

34. SAP Menu & Navigation

35. Introductory Game: Round 1 15 min 30 steps

36. Cost, Inventory & Initial Pricing

37. Initial Inventory in Round 1

38. Initial Financial Statement in Round 1

39. You have initial inventory for each finished product (100,000 for each finished product) • You will sell your available products in Q1. • You can’t buy any raw materials in Q1. • You can’t make plan, can’t run MRP, and can’t produce any finished goods in Q1.. • 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)

40. Participant’s Job Aid & Menu

41. Maintain Prices for DC 10 & DC 12

42. Marketing Expense

43. Check product costing

44. Stock in Material Overview

45. Check Sales Summary Report in Your Company Code

46. Check Sales Order Report in Your Company Code

47. Check Market Report for All Company Codes

48. Check Financial Statements in Your Company Code

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

50. Introductory Game: Round 2 15 min 30 steps