1. Operate a Logistics Company EGN 5621 Enterprise Systems Collaboration (Professional MSEM ) Fall, 2012

2. Logistics Game : Pedagogical Objectives Understanding the importance of process management as a source of organization competitiveness. To show how the ERP system supports business strategies To develop a hands-on understanding of the concepts underlying enterprise systems To experience the tangible benefits of enterprise integration firsthand To develop technical skills at taking decision using an enterprise software

3. Logistics Game In groups of at most 4 participants, each team has to operate a company selling dairy products. Using standard reports, participants must make business decisions in order to ensure the profitability of their operations.

4. Dairy Products

5. Logistics Game Design Your company owns a main warehouse which receives and stores products you have purchased from a dairy cooperative.

6. Products Details

7. The Market’s Preferences Each region has unique preferences related to the products it wishes to purchase from your company. Preferences change every game.

8. One Price List in Distribution Channel 16 You will need to set-up prices for your products. The price for each product will be applied in all 3 regions.

9. You will have to manage transportation fees carefully in order to maximize your company’s profits. Transportation Fees Cost : 1000 € per PO Cost : 100 € per regional tranfer

10. Logistics Strategy You must determine a logistics strategy in order to make your products available for sales through your regional storage location. OR

11. A Push Logistics Strategy A Push strategy specified the quantity to be delivered of each product to each area and the number of days between deliveries.

12. Push Simulator will deliver the chosen quantity to your three storage locations every time in the defined number days. If more stock in the main warehouse than required by the transfer, excess material remains at the main warehouse. If less material available in the main warehouse than required by the transfer, the generated stock transfers divided available stock, so that regions with higher stock transfer amounts receive more stock

13. A Pull Logistics Strategy A Pull strategy specified the target quantities for each product in each area and the number of days between deliveries.

14. Pull Simulator will deliver the balance between the target quantity and current stock quantity for each local storage every time according to your selected scheduling days. If there is enough stock in the local storage, then no transfers will be generated for the local storage and the exceeding quantity will remain in the main warehouse. In case there are less products available in the main warehouse, the generated stock transfers divide available stock so that the local storages with large gaps between current and target stock are prioritised.

15. Rules of the Game Each round will last 10 days There are costs €1,000 per PO and €100 for each transfer from main warehouse to regional locations There is charge for interest No initial inventory for each product. No marketing expense End-of-round inventory is carried over to the next round. You may sell a product only if the stock is available through your regional storage location. You are competing against other teams. Your objective is to maximize profits.

16. Rules of the Game There are warehousing costs whenever the company’s total inventory (inventory in both the main warehouse and three local storages) exceeds 4,000 boxes. The cost is 100 € per day for each additional 100 boxes exceeding 4,000. Market size: About € 6,000 per company per day. Lead time from suppliers: 1 – 3 days Lead time to customers: 1 – 3 days

17. Activities in Each Company Create planned independent requirement for each finished product (MD61) Run MRP (MD01) Covert purchase requisitions to purchase orders (ME59N) Stock transfer (ZMb1B) Maintain prices for each products (VK32) Check reports ◦Purchase order report (ZME2N) ◦Inventory report (ZMB52) ◦Summary sales report (ZVC2) ◦Sales report (ZVA05) ◦Financial statement (F.01)

18. Activities in Each Company Must make sure that the regional warehouses have the required stock needed to meet demand while reducing the delivery, purchase order numbers, warehouse cost. In order to succeed, each company have a good strategy, each department must coordinate their efforts correctly, response to market requirement/changes quickly, and use the ERP system effectively.

19. Game layout 10 days 10 min 10 days 10 min 10 days 10 min Round 1 Round … Round 6

20. Job Aids (1/2)

21. Job Aids (2/2)

22. Login information Client: 165 Login: $# Where $ is your team letter And # is your number Password: ERPSIM You will have to change your password the first time you enter

23. SAP Menu & Navigation Top Menu: Extras / Settings / Display technical names

24. Logistics Game: Round 1

25. Participant’s job aid & Menu

26. Forecasting First Screen Second Screen

27. Execute MRP

28. Convert purchase requisitions into purchase orders

29. Track purchase orders

30. Logistics Transfer Planning

31. Stock in material overview

32. Maintain Prices for DC 16 16

33. Check sales summary report

34. Check financial statement

35. The Logistics Game: Round 1 (10 days) We start the simulator for 10 days

36. Debriefing: Round 1

37. Questions? What are your first impressions? How was the communication during Round 1? What information was exchanged among teammates? Who took the decision in your team? Were you satisfied with the team organisation in your group?

38. Logistics Game: Round 2

39. The Logistics Game: Round 2 (10 days) We start the simulator for 10 days

40. Debriefing: Round 2

41. Questions? How was the communication during Round 2? What information was exchanged among teammates? Who took the decisions in your team? Were you satisfied with the team organisation in your group?

42. Logistics Game: Round 3

43. The Logistics Game: Round 3 (10 days) We start the simulator for the last 10 days

44. Debriefing: Round 3 - 6

45. Questions? How was the communication during Round 3 - 6? What information was exchanged among teammates? Who took the decisions in your team? Were you satisfied with the team organisation in your group?

46. Questions? Did your role and relevance within your team changed from Round 3 to Round 6? How were the decisions made? Based on your experience, what is an Entreprise system? How can an Enterprise system tranform an organization?