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

2. New product development

3. New product development

4. 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.

5. 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

6. 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

7. 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

8. 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

9. Production improvements

10. 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/step (less than € 0.01 per box per step)
100,000 kg (or part € 350/step (more expensive because it's raw food product)
100,000 boxes AND/OR bags (or part thereof), @ € 50 step

11. Risk premium on credit ratings

12. Production planning decision

13. Lot size decision (MM02) 13

14. Procurement decision

15. Production execution decision

16. Production improvement decision

17. Pricing decision

18. Marketing decision

19. 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

20. Raw material cost per PO20

21. Check Production Cost (ZCK11)