© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Manufacturing game Part 1 - Chapter 1 Introduction

What’s an ERP?

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Each team of 4 to 5 players… © SAP 2009 / Page 3

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Running a make-to-stock company… © SAP 2009 / Page 4

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Before ERP systems © SAP 2009 / Page 5

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 With an integrated enterprise system © SAP 2009 / Page 6

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Collaborating using the end-to- end power of SAP ! © SAP 2009 / Page 7

Description of your new company

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Welcome to your new job !

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Location of the 26 companies

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Muesli Cereals

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Product size 0.5 KG 1.0 KG

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Your 6 products 40% wheat 40% oat 20% nut 1 box 1 bag 35% wheat 35% oat 10% raisin 10% nut 5% strawberry 5% blueberry 1 box 1 bag 50% wheat 50% oat 1 box 1 bag 40% wheat 40% oat 20% raisin 1 box 1 bag 40% wheat 40% oat 20% strawberry 1 box 1 bag 40% wheat 40% oat 20% blueberry 1 box 1 bag

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Muesli Manufacturing Association Label Regulation

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Operations in the cash-to- cash cycle

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Input Cost at low seasonal price

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Number of stores by geographical area

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 DC10 Hypermarkets Buy only large boxes (1 kg) Payment delay of 30 days More sensitive to price Less sensistive to advertising No partial orders - Must be able to obtain the full order in order to buy from a particular plant. Buy about 3 different products © HEC Montréal 2009 / Page 18

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 DC12 Grocery chains Buy small boxes (0.5 kg) and large boxes (1 kg) Variable payment delay between 15 to 20 days Buy about 4 different products – seek to buy those from a unique vendor © HEC Montréal 2009 / Page 19

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 DC14 Independent grocers Only buy small boxes (0.5 kg) Less price sensitive Sensitive to advertising Variable payment delay between 5 to 30 days Buy about 2 different products © HEC Montréal 2009 / Page 20

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Number of retailers per Länders

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Risk premium on credit ratings

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Production improvements

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 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 € 200/day (less than € 0.01 per box per day) 100,000 kg (or part € 350/day (more expensive because it's raw food product) 100,000 boxes AND/OR bags (or part € 50 day © HEC Montréal 2009 / Page 24

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Fixed costs per week

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Review of the major rules You may not change the recipe of a product if you are still carrying inventory Interest payment and loan renegotiation Customers do not change throughout the game, hence you may learn from their past behaviour The company displaying the highest shareholder’s equity at the end of the simulation wins the game You must behave ethically at all times At the end of the game, raw material and finished goods inventory will be sold out at a reduced price (optional)

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Elements of a winning strategy 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 Have fun!

© Léger et al ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and Western Michigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.ca Version : August 2009 Pre-register now !