1. Enterprise Systems Collaboration EGN 5621 Enterprise Systems Collaboration Fall, 2011

2. Course Objectives  To learn how the ERP system supports business strategies.  To develop technical skills of making decisions using an enterprise software  To acquire a hands-on understanding of the concepts underlying enterprise systems operation  To appreciate first hand, the tangible benefits of enterprise integration

3. The Operations Scenario You (your team) will operate a company in a simulated business environment to compete with several other competitors (i.e., other teams). You (each team) will decide on business strategies and make business decisions toward maximum operation profit for your company, using an enterprise information system. 3

4. Corporate Roles Designation CEO (Team Leader) ◦Watch financial statement ◦Price market report ◦Check summary sales report ◦Check sales and market data ◦Check inventory Report Marketing Manager ◦Marketing Expense Planning ◦Price market report ◦Check sales and market data Sales Manager ◦Change price ◦Check summary sales report ◦Check sales and market data MM Manager ◦Forecast – create planned indep. Req. ◦MRP run ◦Automatic generation of POs ◦Purchase Order Tracking ◦Check inventory Report 4

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

6. Automated Business Processes The Integrated ERP Environment

7. Sales Automated Planning Automated Procurement Automated The Simulated ERP Environment Watch this video clip for more information about ERPsim: http://www.youtube.com/watch?v=qzqiRsuY4gg

8. Three Case Studies

9. The Distribution Case  Covers the following processes and operations:  Planning and Purchasing  Sales and Marketing

10. The Manufacturing Case  Covers the following processes and operations:  Planning and Purchasing  Production  Sales and Marketing  Master Data (BOM)  Advanced Options  Automatic asset depreciation posting*  Interest, Bank Loans, Credit Rating Management*  Allows for the reversal of the business cycle *deactivated by default

11. The Manufacturing Case Extended  Covers the following processes and operations:  Planning and Purchasing  Production  Sales and Marketing  Master Data (BOM)  Advanced Options  Warehousing Costs  Production improvement  Automatic asset depreciation posting  Interest, Bank Loans, and Credit Rating Management

12. The Logistics Case  The focus is set on data analysis  Overstock, out of stocks and wrong allocations of products can be costly to the team  Students must analyse data to understand the market and make better decisions  Covers the following processes and operations:  Planning and Purchasing  Transfers and logistics  Sales

13. Operate a Distribution Company (Operations & Pilot Run) EGN 5621 Enterprise Systems Collaboration Fall, 2011

14. Teams Each time should have 4 participants at most. Each team operates a bottle distribution company. Participants make business decisions to ensure the profitability of their operation, using standard reports.

15. The (German) Market North 45 retailers South 38 retailers West 40 retailers 6 products (boxes of 12x1L and 24x500mL) 3 areas with distinct marketing accounts One distribution channel: 14 Market size of about € 6,000 per company per step

16. The 6 Products Product CodeProduct DescriptionUnits in boxCost of boxes $$-F011L ClearPure12 bottles 11.99 $$-F021L Spritz12 bottles 14.99 $$-F031L Lemon Spritz12 bottles 16.99 $$-F04500mL ClearPure24 bottles 16.99 $$-F05500mL Spritz24 bottles 19.99 $$-F06500mL Lemon Spritz24 bottles 22.99

17. The Game Layout Design 20 steps 25 min 20 steps 25 min 20 steps 25 min

18. Rules of the game  Each round will be of 20 steps (a bit more than 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

19. ABC of the Enterprise system  An enterprise system is built around an integrated database  A system such as SAP contains tens of thousands of data tables  When a user creates, changes or views data in the system, he or she performs a transaction  Data changed or created by one user can be exploited by all other users (ex. reporting, tracking, execution of orders, etc.)  All transactions are traceable, transactions with financial impacts can be reversed, never erased

20. User interface  Users interact with the enterprise system through transactions.  A large number of pre-programmed transactions exist in SAP  Each transaction has a transaction code – one can call a transaction if one knows the transaction code  The SAP menu allows to browse and find the desired transaction  One can create a user menu or a list of favorites with the commonly used transactions

21. SAP Menu & Navigation Extras / Settings / Display Technical Names

22. Reports and queries  Reports and queries are transactions that allow users to view existing data  A typical query is performed as follows:  In the first page of the transaction, you must enter the selection criteria for the query (ex. Company code, product code, etc.)  Then, click on to execute the query  A table containing the requested data will appear  The display and layout can sometimes be modified

23. Entering new data Some transactions are designed to change or create new data (change forecast, release purchasing orders, change sale price, etc.) The interface varies according to data required by the system The system will not allow you to save information if all the compulsory fields have not been filled You must save/release/confirm before exiting the transaction

24. Other useful buttons Use the navigation buttons to go back or get out of a transaction You can open up to 6 sessions. Click on to open a new session Delete, search, select all, view, enter.

25. Participant’s job aid

26. Getting Started: Set up teams: ◦Max 4 persons: User 1 to User 4 ◦Up to 26 companies : A to Z Log in using user name and password given by the instructor.

27. Login information Client will be provided by the instructor Login: intro_$ # Where $ = Team, # = User 1 to User 4 Password: ERPSIM You will have to change your password the first time you enter

28. 25 min 20 steps Distribution Game: Round 1

29. Cost, inventory & initial pricing Material$$-F01$$-F02$$-F03$$-F04$$-F05$$-F06 Name 1L ClearPure1L Spritz 1L Lemon Spritz 500mL ClearPure 500mL Spritz 500mL Lemon Spritz Size1L 500mL Number of bottles in package 12 24 Cost €11.99 €14.99 €16.99 €19.99 €22.99 Initial price €14.99 €17.99 €19.99 €22.99 €25.99 Initial stock1,000

30. The Distribution Game: Quarter 1 (20 virtual steps) Initial Financial Status: ◦11000Fix Assets250,000 ◦70000Common Stock(500,000) ◦113300Bank Cash Account146,060 ◦792000Finished Goods103,940

31. The Distribution Case: Round 1 (20 steps) You need to maintain the price of your 6 products and invest in marketing. Need to know the following in order to make decisions: ◦Maintain price list ◦See available stock ◦Monitor sales orders ◦Monitor competitors

32. Participant’s job aid & Menu

33. Maintain Prices for DC 14

34. Marketing expenses

35. On marketing Enter your daily marketing budget for each product and for each region The impact of marketing in one region depends on your share of all marketing expenses in this region Marketing induces customers to find your product “more desirable” The daily marketing budget can be changed at any time

36. Stock in material overview

37. Check sales summary report

38. Check market report

39. Check sales order report

40. The Distribution Game: Round 1 (20 steps) Now start the simulator for 20 steps

41. 25 min 20 steps Distribution Game: Round 2

42. It’s time to replenish ! You need to replenish. Replenishment will allow you to purchase the same quantity that you have sold. Material$$-F01$$-F02$$-F03$$-F04$$-F05$$-F06 Name 1L ClearPure1L Spritz1L Lemon Spritz 500mL ClearPure 500mL Spritz 500mL Lemon Spritz Initial forecast1,000 Replenishment lead time Up to 3 steps

43. Participant’s job aid & Menu

44. Execute MRP

45. After the MRP run

46. Convert purchase requisitions into purchase orders

47. Track purchase orders

48. The Distribution Game: Round 2 (20 steps) Now start the simulator for 20 steps

49. 25 min 20 steps Distribution Game: Round 3

50. It’s time to replenish ! You need to replenish. Change your forecast to adapt the replenishment levels to your needs What do you need to know in order to make that decision ? Material$$-F01$$-F02$$-F03$$-F04$$-F05$$-F06 Name 1L ClearPure1L Spritz 1L Lemon Spritz 500mL ClearPure 500mL Spritz 500mL Lemon Spritz Initial forecast1,000 Replenishment lead time 3 steps

51. Participant’s job aid & Menu

52. Forecasting

53. The Distribution Game: Round 3 (20 steps) Now start the simulator for the last 20 steps

54. Cash management  You started with 146,060 in cash  You can reimburse your bank loan at anytime and save on interest payment  You can use all your cash to stock products, but …  If you run out of cash, your bank loan will be extended but you credit rating will go down and your interest payments will go up  Holding to much stock reduce your ability to response to customers’ preferences 54

55. Premium on credit ratings Cre dit ra tings Risk Premium AAA0.00% AA+ AA- A BBB+ BBB BBB- BB+ BB CC 10.00%

56. Check financial data 56

57. Analysis of Your Distribution Operation