1. Pierre-Majorique LÉGER Jacques ROBERT Gilbert BABIN Robert PELLERIN Bret WAGNER Version : August 2011 © Léger et al. 2011 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 Copyright © 2011 HEC Montréal ERP Simulation Game Manufacturing game Part 1

2. Version : August 2011 © Léger et al. 2011 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 Running a make-to-stock company…

3. Version : August 2011 © Léger et al. 2011 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 Collaborating using the end-to-end power of SAP !

4. Description of your new company

5. Version : August 2011 © Léger et al. 2011 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 Welcome to your new job ! http://www.youtube.com/watch?v=XYFJASoYGps

6. Version : August 2011 © Léger et al. 2011 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 Location of the 26 companies

7. Version : August 2011 © Léger et al. 2011 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 Muesli Cereals Raisins Oats Strawberries Wheat Blueberries Nuts

8. Version : August 2011 © Léger et al. 2011 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 Product size 0.5 KG 1.0 KG

9. Version : August 2011 © Léger et al. 2011 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 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

10. Version : August 2011 © Léger et al. 2011 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 Muesli Manufacturing Association Label Regulation

11. Version : August 2011 © Léger et al. 2011 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 Operations in the cash-to-cash cycle

12. Version : August 2011 © Léger et al. 2011 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 Input Cost at low seasonal price

13. Version : August 2011 © Léger et al. 2011 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 Number of stores by geographical area

14. Version : August 2011 © Léger et al. 2011 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 DC10 Hypermarkets Buy only large boxes (1 kg) Payment delay of 20 days More sensitive to price Less sensitive to advertising Will have a stronger preference for 3 particular products during the simulation

15. Version : August 2011 © Léger et al. 2011 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 DC12 Grocery chains Buy small boxes (0.5 kg) and large boxes (1 kg) Payment delay of 10 to 15 days Will have a stronger preference for 4 particular products during the simulation

16. Version : August 2011 © Léger et al. 2011 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 DC14 Independent grocers Only buy small boxes (0.5 kg) Less price sensitive Sensitive to advertising Payment delay of 5 to 10 days Will have a stronger preference for 2 particular products during the simulation

17. Version : August 2011 © Léger et al. 2011 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 Number of retailers per Länders

18. Version : August 2011 © Léger et al. 2011 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 Risk premium on credit ratings

19. Version : August 2011 © Léger et al. 2011 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 Production improvements

20. Version : August 2011 © Léger et al. 2011 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 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/day (less than € 0.01 per box per step) 100,000 kg (or part thereof), @ € 350/day (more expensive because it's raw food product) 100,000 boxes AND/OR bags (or part thereof), @ € 50 day

21. Version : August 2011 © Léger et al. 2011 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 Fixed costs per week

22. Version : August 2011 © Léger et al. 2011 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 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.

23. Version : August 2011 © Léger et al. 2011 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 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!

24. Introductory Game: Round 1 30 steps 30 min

25. Version : August 2011 © Léger et al. 2011 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 Cost, inventory & initial pricing Material$$-F01$$-F02$$-F03$$-F04$$-F05$$-F06 Name Nut Muesli 1.0 kg. Blueberry Muesli 1.0 kg. Strawberry Muesli 1.0 kg. Raisin Muesli 1.0 kg. Original Muesli 1.0 kg. Mixed Fruit Muesli 1.0 kg. Raw material Cost€ 1.53€ 1.97 € 1.38€ 1.36€ 1.76 Standard cost€ 2.48€ 3.09 € 2.50€ 2.65€ 2.89 Initial price 10 12 € 4.24 € 4.49 € 5.18 € 5.43 € 5.18 € 5.43 € 3.92 € 4.17 € 3.87 € 4.12 € 4.75 € 5.00 Initial stock100,000

26. Version : August 2011 © Léger et al. 2011 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 The Introductory game: Round 1 (30 steps) You need to maintain the price of your 6 products and invest in marketing. What do you need to know in order to make that decision ? You need to know how to : Maintain price list See available stock Monitor sales orders Monitor competitors Monitor your profit !

27. Version : August 2011 © Léger et al. 2011 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 Participant’s job aid & Menu

28. Version : August 2011 © Léger et al. 2011 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 Check product costing

29. Version : August 2011 © Léger et al. 2011 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 Maintain Prices for DC 10 & 12

30. Version : August 2011 © Léger et al. 2011 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 Marketing expense

31. Version : August 2011 © Léger et al. 2011 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 Stock in material overview

32. Version : August 2011 © Léger et al. 2011 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 Check sales summary report

33. Version : August 2011 © Léger et al. 2011 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 Check sales order report

34. Version : August 2011 © Léger et al. 2011 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 Check market report

35. Version : August 2011 © Léger et al. 2011 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 Check financial statements

36. Version : August 2011 © Léger et al. 2011 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 The Introductory game: Round 1 (30 steps) We start the simulator for 30 steps

37. Introductory game: Round 2 30 steps 30 min

38. Version : August 2011 © Léger et al. 2011 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 Participant’s job aid & Menu

39. Version : August 2011 © Léger et al. 2011 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 Release production order

40. Version : August 2011 © Léger et al. 2011 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 Check production schedule

41. Version : August 2011 © Léger et al. 2011 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 Parameters of the game

42. Version : August 2011 © Léger et al. 2011 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 The Introductory game: Round 2 (30 steps) We start the simulator for 30 steps

43. Introductory game: Round 3 30 steps 30 min

44. Version : August 2011 © Léger et al. 2011 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 Participant’s job aid & Menu

45. Version : August 2011 © Léger et al. 2011 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 Forecasting

46. Version : August 2011 © Léger et al. 2011 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 Execute MRP

47. Version : August 2011 © Léger et al. 2011 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 After the MRP run

48. Version : August 2011 © Léger et al. 2011 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 Convert purchase requisitions into purchase orders

49. Version : August 2011 © Léger et al. 2011 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 Track purchase orders

50. Version : August 2011 © Léger et al. 2011 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 The Introductory game: Round 3 (30 steps) We start the simulator for the last 30 steps

51. Debriefing

52. Version : August 2011 © Léger et al. 2011 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 Conclusion The next PowerPoint will present an extended version of this simulation and a more detailed description of the underlying business process and decision support tools.