1. Lab 7 MERP 4/14/2010 BC Kwon kwonb@purdue.edu

2. Lab 7 You are appointed as a CEO of a manufacturing company for a year Your mission is to generate profit while maintaining good reputation In MERP 2

3. What is MERP? An ERP simulation tool Simulates the realities of managing a complex manufacturing company Manage a company by controlling policies and procedures of business operation dynamically 3

4. Your goals in Lab 7 Make a lot of money! (simulated money) Maintain the reputation level Understand your actions (change your policy, place an order of materials, and etc) and how they can impact upon key performance index (K.P.I.) Test, think, retest, and rethink 4

5. Functional Areas in MERP Marketing and Sales ◦ Linkage between the company and customers Production ◦ Transforming raw materials into finished goods

6. Functional Areas in MERP (cont.) Purchasing ◦ Raw material control Finance ◦ Every month you get a profit and loss statement Management ◦ Real-time graphical summary of the simulation

7. Functional Areas in MERP (cont.) Each function provides its own “view” Each function also has its own menu options, which can be found in: ◦ Information ◦ Actions ◦ Policies

8. Demonstration 8

9. Registration and Installation MERP is a Web-enabled technology ◦ Registration with the provided user key at  http://www1.mbe- sim.com/registrated_users/groupusers/login.php3? group=Purdue http://www1.mbe- sim.com/registrated_users/groupusers/login.php3? group=Purdue  Your user key is available in the grade book ◦ Install the client software to your computer connected to the Internet  Download the client from http://www1.mbe- sim.com/download.php?id=38http://www1.mbe- sim.com/download.php?id=38 ◦ Follow the instructions posted on BBV  Registration/installation instructions  MERP learning platform description

10. Marketing A1: Product ID WIP: Number of products that are currently in production On-Time: The percentage of units that have been delivered on time in the current month Reputation: The due-date performance (as rated by the customers, this is updated monthly) Firm Orders: The amount of orders that need to be shipped within the Quoted Lead Time (QLT) FG: The amount of finished goods

11. Production (Operation) Each frame represents one work center The Header ◦ Name of work center (GT, M1, etc) ◦ Dispatch Policy  Save setups, FIFO, Schedule, EDD (Earliest Due Date) ◦ Setup Time between two operations Status: Setup, Prod, Break, Idle Product-Step: Product (A1) & production-step Id (J4) WO: The work order ID of the order that the work center is currently working Left: Number of units left to complete the current WO

12. Purchasing Each box represents a raw material Z1: Material ID On Order: Amount of each raw material that has been ordered but not yet received from supplier(s) On hand: Current inventory on each raw material

13. Finance Monthly profit and loss statement Observe the level of sales, costs, profit Compare different simulation runs, see in which simulation had the largest sales and which had the largest profit

14. Management A real-time graphical summary of KPI Have the management view window open while the simulation is running, to see how sales, profit, service level etc. are changing every day If any drastic changes in the graphs, stop the simulation and review the parameters to see what caused the unwanted effects Some important parameters ◦ Reputation: decreasing means too low production level to keep up with customer orders or too low lead times ◦ Profit; Sales; Cash ◦ Operating Expenses: if too high, lower profit levels ◦ Inventory: should be in a zigzag pattern; if it keep increasing, change purchasing parameter ◦ Production throughput: to evaluate production levels