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Case Study 2: Operate a Logistics Company

Case Study 2: Operate a Logistics Company. EGN 5621 Enterprise Systems Collaboration Summer B, 2013. Understanding the importance of process management as a source of organization competitiveness. To show how the ERP system supports business strategies

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Case Study 2: Operate a Logistics Company

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  1. Case Study 2:Operate a Logistics Company EGN 5621 Enterprise Systems Collaboration Summer B, 2013

  2. Understanding the importance of process management as a source of organization competitiveness. • To show how the ERP system supports business strategies • To develop a hands-on understanding of the concepts underlying enterprise systems • To experience the tangible benefits of enterprise integration firsthand • To develop technical skills at taking decision using an enterprise software Logistics Game : Pedagogical Objectives

  3. In groups of at most 4 participants, each team has to operate a company selling dairy products. • Using standard reports, participants must make business decisions in order to ensure the profitability of their operations. Logistics Game

  4. DairyProducts

  5. Your company owns a main warehouse which receives and stores products you have purchased from a dairy cooperative. Logistics Game Design

  6. Products Details

  7. Eachregion has unique preferencesrelated to the productsitwishes to purchasefromyourcompany. Preferences change everygame. The Market’sPreferences

  8. You willneed to set-upprices for yourproducts. The price for eachproductwillbeapplied in all 3 regions. One Price List in Distribution Channel 16

  9. You will have to manage transportation fees carefully in order to maximize your company’s profits. Cost : 1000 € per PO Transportation Fees Cost : 100 € per regionaltranfer

  10. You must determine a logistics strategy in order to make your products available for sales through your regional storage location. OR LogisticsStrategy

  11. A Push strategy specified the quantity to be delivered of each product to each area and the number of days between deliveries. A Push LogisticsStrategy

  12. Simulator will deliver the chosen quantity to your three storage locations every time in the defined number of days. • If more stock in the main warehouse than required by the transfer, excess material remains at the main warehouse. If less material available in the main warehouse than required by the transfer, the generated stock transfers divided available stock, so that regions with higher stock transfer amounts receive more stock Push

  13. A Pull strategy specified the target quantities for each product in each area and the number of days between deliveries. A Pull LogisticsStrategy

  14. Simulator will deliver the balance between the target quantity and current stock quantity for each local storage every time according to your selected scheduling days. • If there is enough stock in the local storage, then no transfers will be generated for the local storage and the exceeding quantity will remain in the main warehouse. In case there are less products available in the main warehouse, the generated stock transfers divide available stock so that the local storages with large gaps between current and target stock are prioritised. Pull

  15. Each round will last 10 days • There are costs €1,000 per PO and €100 for eachtransferfrom main warehouse to a regional location • There is charge for interest • No initial inventory for each product. • No marketing expense • End-of-round inventory is carried over to the next round. • You may sell a product only if the stock is available through your regional storage location. • You are competing against other teams. • The objective is to maximize profits. Rules of the Game

  16. There are warehousing costs whenever the company’s total inventory (inventory in both the main warehouse and three local storages) exceeds 4,000 boxes. The cost is 100 € per day for eachadditional 100 boxes exceeding 4,000. • Market size: About € 6,000 per company per day. • Lead time fromsuppliers: 1 – 3 days • Lead time to customers: 1 – 3 days Rules of the Game

  17. Create planned independent requirement for each finished product (MD61) • Run MRP (MD01) • Covert purchase requisitions to purchase orders (ME59N) • Stock transfer (ZMb1B) • Maintain prices for each products (VK32) • Check reports • Purchase order report (ZME2N) • Inventory report (ZMB52) • Summary sales report (ZVC2) • Sales report (ZVA05) • Financial statement (F.01) Activities in Each Company

  18. Must make sure that the regional warehouses have the required stock needed to meet demand while reducing the delivery, the number of purchase orders, and warehouse cost. In order to succeed, each company have a good strategy, each department must coordinate their efforts correctly, response to market requirement/changes quickly, and use the ERP system effectively. Activities in Each Company

  19. 10 min 10 min 10 min 10 days 10 days 10 days Round … Round 6 Round 1 Game layout

  20. Job Aids (1/2)

  21. Job Aids (2/2)

  22. Client: 205 Login: $# Where $ is your team letter And # is your number Password: ERPSIM You will have to change your password the first time you enter Login information

  23. Top Menu: Extras / Settings / Display technical names SAP Menu & Navigation

  24. Logistics Game: Round 1

  25. Participant’s job aid & Menu

  26. First Screen Second Screen Forecasting

  27. Execute MRP

  28. Convert purchase requisitions into purchase orders

  29. Track purchase orders

  30. Logistics Transfer Planning

  31. Stock in material overview

  32. 16 Maintain Prices for DC 16

  33. Check sales summary report

  34. Check financial statement

  35. We start the simulator for 10 days The Logistics Game:Round 1 (10 days)

  36. Debriefing:Round 1

  37. What are your first impressions? • How was the communication during Round 1? • What information was exchanged among teammates? • Who took the decision in your team? • Were you satisfied with the team organisation in your group? Questions?

  38. Logistics Game: Round 2

  39. We start the simulator for 10 days The Logistics Game:Round 2 (10 days)

  40. Debriefing:Round 2

  41. How was the communication during Round 2? • What information was exchanged among teammates? • Who made decisions in your team? • Were you satisfied with the team organisation in your group? Questions?

  42. Logistics Game: Round 3

  43. We start the simulator for the last 10 days The Logistics Game:Round 3 (10 days)

  44. Debriefing:Round 3 - 6

  45. How was the communication during Rounds 3 - 6? • What information was exchanged among team mates? • Who made the decisions in your team? • Were you satisfied with the team organisation in your group? Questions?

  46. Did your role and relevance within your team changed from Round 3 to Round 6? • How were the decisions made? • Based on your experience, what is an Entreprise system? • How can an Enterprise system tranform an organization? Questions?

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