1. Case Study 3: Operate a Manufacturing Company EGN 5621 Enterprise Systems Collaboration (Professional MSEM) Fall, 2011

2. Objective The objective of the Manufacturing introductory ERPsim is to provide a quick hands-on experience of an integrated business process through an ERP manufacturing ERPsim, which combines basic operation functions, such as planning, sales, production, procurement, marketing, investment, and financial accounting for learning how to make business strategy and business decisions.

3. Corporate Roles Designation CEO (Team Leader) ◦Watch financial statement ◦Check Price market report ◦Check summary sales report ◦Check sales and market data ◦Check inventory Report Marketing & Sales Manager ◦Maintain selling prices ◦Make marketing expense planning ◦Check sales report ◦Check summary sales report ◦Check Price market report 3

4. Corporate Roles Designation Production & Planning Manager ◦Create planned independent Requirements ◦Run MRP ◦Convert planned order to production orders ◦Check production schedule MM Manager ◦Generate Purchase orders from purchase requisitions ◦Track purchase orders ◦Check MRP results ◦Check individual stock level ◦Check inventory Report 4

5. Operations in the cash-to-cash cycle

6. The Virtual Business Environment Simulation of a market Automation of administrative tasks Simulation of the passing of time

7. Organizational elements

11. Data model of the main master data used in the simulation game

12. Definition of master data (1/2)

13. Definition of master data (2/2)

14. List of master data to create for the simulation

15. Muesli Cereals Raisins Oats Strawberries Wheat Blueberries Nuts

16. 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

17. Data model of product Y$$-F06

18. German market North DC10: 2 retailers DC12: 19 retailers South DC10: 7 retailers DC12: 23 retailers West DC10: 3 retailers DC12: 17 retailers

19. Muesli Manufacturing Association Label Regulation

20. Input Cost at low seasonal price

21. Number of stores by geographical area

22. 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

23. 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

24. DC14 Independent grocers (will be used in Extension ERPsim) 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

25. Number of retailers per Locations

26. Risk premium on credit ratings

27. Production improvements (will be used in extension ERPsim)

28. Review of the major rules You don’t change the recipe of a product in the mfg introduction game 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.

29. Elements of a winning strategy Use the ERP system efficiently Do not run out of stock Delays and production capacity constraints are important elements of the game Team organization is more important than you think

30. Game layout 30 steps 30 min 30 steps 30 min 30 steps 30 min

31. Rules of the game Each round will be of 30 steps (approx 1 min per step) End-of-round inventory is carried over to the next round You can sell a product only if you have it in stock You compete against the other teams and importers Your objective is to maximize profit

32. Participant’s job aid

33. Let’s get started! Create your team : Max 4 persons : User 1 to User 4 Up to 26 company : A to Z Log in using user name and passwords giving by your teacher

34. Login information Client 265 Login : intro_$ # $ = Team, # = User 1 to User 4 Password: ERPSIM

35. SAP Menu & Navigation

36. Introductory Game: Round 1 30 steps 30 min

37. 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

38. The Introductory game: Round 1 (30 steps- days) You have initial inventory for each finished product (100,000 for each) You only can sell your products in Q1. You can’t buy any raw materials in Q1. You can’t make plan and produce any finished goods in Q1. You need to maintain the price of your 6 products and invest in marketing. You need to know how to : Maintain price list and make plan for marketing investment Watch available stock Monitor sales orders Monitor your profit !

39. Participant’s job aid & Menu

40. Check product costing

41. Maintain Prices for DC 10 & 12

42. Marketing expense

43. Stock in material overview

44. Check sales summary report

45. Check sales order report

46. Check market report

47. Check Financial Statements

48. The Introductory game: Round 1 (30 steps – 30 days) We start the simulator for 30 steps

49. Introductory game: Round 2 30 steps 30 min

50. The Introductory game: Round 2 (30 steps- days) You finished goods will be carried over to the round 2 if your still have inventory in the end of the round 1. You have two planned orders in total 100,000 for each product. You have initial raw materials which are enough to make 100,000 of your each product. You need to decide the sequence for conversion of your planned orders to production orders. You can’t buy any raw materials in Q2. You can produce your products in Q2 by converting planned orders to production orders. You continue to maintain your prices and make investment in market.

51. Parameters of the game

52. Participant’s job aid & Menu

53. Release production order

54. Release Production Orders (CO41)

55. Check Production Schedule

56. The Introductory game: Round 2 (30 steps - days) We start the simulator for 30 steps

57. Introductory game: Round 3 30 steps 30 min

58. The Introductory game: Round 3 (30 steps- days) You finished goods and raw materials will be carried over to the round 2 if your still have inventory in the end of the round 2. You can buy any raw materials in Q3. You can produce your products in Q3. You need to create independent requirement plan for your products, run MRP to create purchase requisitions and planned orders, convert purchase requisitions to production orders, and release planned orders to production orders. You continue to maintain your prices and make investment in market.

59. Participant’s job aid & Menu

60. Create Planned Independent Requirement for 6 Finished Products (MD61)

61. Forecasting sales

62. Execute MRP

63. After the MRP run

64. Automatic Creation of Purchase Orders from Requirement (ME59)

65. Convert purchase requisitions into purchase orders

66. Track purchase orders

67. Purchase Order Tracking(ZME2N)

68. Raw material cost per PO

69. Collective Conversion of Planned Order (CO41)

70. Release production order

71. Release Production Orders (CO41)

72. Check Production Schedule

73. The Introductory game: Round 3 (30 steps – 30 days) We start the simulator for the last 30 steps