Operate a Manufacturing Company (Case Study 2) (Rounds 2 and 4) Part 2 EGN 5621 Enterprise Systems Collaboration Fall, 2011

New product development

New product development

Review of the major rules 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.

Elements of a winning strategy Use the ERP system efficiently Do not run out of stock Do lose your production capacity Setup right prices for different products at different distribution channels Team organization is more important

DC10 Hypermarkets 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

DC12 Grocery chains 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

DC14 Independent grocers 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

Production improvements

Warehousing cost automatically charged 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

Risk premium on credit ratings

Production planning decision

Lot size decision (MM02) 13

Procurement decision

Production execution decision

Production improvement decision

Pricing decision

Marketing decision

Tasks for the Manufacturing Case Study (Rounds 2 and 4) No Roles Functions Transaction Code 1 CEO Financial statement F.01 Price market report ZMarket Summary sales report ZVC2 Sales & Marketing Sales order report ZVA05 Marketing expense ZADS Change price VK32 3 Production & Planning Forecast – create planned independent Requirements MD61 MRP run MD01 Release production orders CO41 Modify BOM ZCS02 Monitor production schedule ZCOOIS Product cost analysis ZCK11 Check RM cost per Prod. order ZKSB1 4 Procurement Management Automatic generate of POs ME59 Track PO report ZME2N MRP results display MD07 Warehouse Management Check stock level MD04 Inventory report ZMB52 2

Raw material cost per PO 20

Check Production Cost (ZCK11)