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

2. Corporate Roles Designation
CEO
Check Financial Statement
Make investment for production
Check summary sales report
Check price market report
Sales & Market Manager
Check sales order report
Check price market report
Maintain and change market expense
Change selling prices for finished goods 2 2

3. Corporate Roles Designation
Production and Planning Manager
Create planned independent requirement
MRP run
Release production orders
Modify BOM
Monitor production schedule
Check product costs
Check raw materials cost per production order
MM Manager
Convert purchase requisitions to purchase orders
Track PO report
MRP results display
Check stock level
Check inventory report 3 3

4. Tasks for the Manufacturing Case StudyNo
Roles
Functions
Transaction Code 1
CEO
Check financial statement
F.01
Create GL Post (Investment)
FB50
Check Price market report
ZMarket
Check Summary sales report
ZVC2
Sales & Marketing Manager
Check Sales order report
ZVA05
Maintain marketing expense
ZADS
Change selling price for FG
VK32 3
Production & Planning Manager
Create planned independent Requirements
MD61
Run MRP
MD01
Release production orders
CO41
Modify BOM
ZCS02
Monitor production schedule
ZCOOIS
Check finished product cost
ZCK11
Check RM cost per Prod. order
ZKSB1 4
MM Manager
Automatically generate POs
ME59N
Track PO report
ZME2N
Display MRP results
MD07
Warehouse Management
Check stock level
MD04
Check Inventory report
ZMB52 2

5. What’s New with Mfg Extension?
Company can design own products based on specified rules
Distribution channel 14 is available
Company can make investment to improve production capacity
Reduce set-up time
Increase production capacity
No starting inventory. Each company should do planning, run MRP, and convert purchase requisitions to Pos before starting game.

6. What’s New with Mfg Extension?
Depreciation of fixed assets is counted
Fixed overheads are counted
Inventory storage cost for excess stock is counted

7. 1. Develop New Products
At beginning of the game, each company has six finished products with a preset recipe for each product.
You can change the recipe of a product during the simulation by changing its bill of material with T- code ZCS02. During simulation, your company always has six BOMs of finished products.
If your company still has inventory of the finished product, the system doesn’t allow you to change its BOM.
Your new product must meet the guideline for recipes.
When the system accepts your changes in BOM, it will change the description in the material master to match the new content and weight. 7 7

8. Muesli Manufacturing Association Label Regulation

9. List of Master Data to Create for the Simulation
Alphanumeric codes
6 Finished products
$$-F01
$$-F02
$$-F03
$$-F04
$$-F05
$$-F06
6 Raw materials
$$-R01
$$-R02
$$-R03
$$-R04
$$-R05
$$-R06
4 Packaging materials
$$-P01
$$-P02
$$-P03
$$-P04
2 Vendors
V01
V02
6 Bill of materials
1 Work center $$
6 Routings
3 x 6 price lists (DC 10, 12, and 14)
6 info-records and 6 source lists for raw materials
V01-$$-R01
V01-$$-R02
V01-$$-R03
V01-$$-R04
V01-$$-R05
V01-$$-R06
4 info-records and 4 source lists for packaging materials
V02-$$-P01
V02-$$-P02
V02-$$-P03
V04-$$-P04
1 profit center
1 coster center

10. Change BOM for New Product10 10

11. Change BOM for New Product11 11

12. 2. Distribution 14 Available
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 12 12

13. 3. Investment for Improvement of Production Capacity
Reduce set-up time
The default set-up time is 12 hours for changing product in your production line. If you want to keep product variety and wish to run small production batches, you can make investment to reduce the set-up time.
The following table shows the set-up time as a function of your investment. If your investment is zero, the set-up time is 12 hours. If you invest 44,117.75, then the set-up time reduces to 10.5 hours. 13 13

14. Investment for Reducing Set-up Time14 14

15. Investment for Reducing Set-up Time in the First Quater
In the first quarter, every company must invest 5,000 euros to reduce set-up time. After the first investment, it’s your company decision if to make more investment. 15 15

16. Investment in SAP to Reduce Set-up Time
Use T-code: FB50
G/L Account: (Weizen bank)
D/C: credit
Amount: 5,000 (first investment)
G/L Account: (Lean manufacturing expense)
D/C: debit
Amount: ,000 (first investment)
Cost center: $$ 16 16

17. Investment for Reducing Set-up Time in SAP17 17

18. Investment for Increasing Production Capacity
Your company can make investment into production equipments to increase your production capacity. This may be your strategic weapon.
When you start the simulation, you have 5 million euro production equipment with a production capacity of 21,000 boxes per day. 18 18

19. Increase Production Capacity
For an investment of 100,000 euros you can increase production capacity by 400 boxes per day. In order to obtain a daily capacity of 25,000 boxes, you need to invest 1 million euros.
Formula for capacity improvement:
Total daily capacity = 21,000 + (0.004 x additional machinery investment). 19 19

20. Investment for Improving Production Capacity in SAP
Use T-code: FB50
G/L Account: (Weizen bank)
D/C: credit
Amount: Your investment
G/L Account: (Machinery & equipment)
D/C: debit
Amount: Your investment 20 20

21. Investment to Improve Production Capacity in SAP21 21

22. 4. No Starting Inventory.
Each company should plan and complete the following steps before simulation:
- Planning for finished products (T-code: MD61),
- Run MRP (T-code, MD01), and
- Convert purchase requisitions to Purchase orders (T-code:ME59N)

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

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

25. Execute MRP

26. Create Purchase Orders from Purchase Requisitions (ME59N)

27. Convert Purchase Requisitions into Purchase Orders

28. Convert Planned Orders to Production Orders
After simulation started and you received required raw and packaging materials, your planning manager needs to convert planned orders to production orders (T- code: CO41)

29. Collective Conversion of Planned Order (CO41)

30. Release Production Order

31. Release Production Orders (CO41)

32. 5. Depreciation of fixed assets
Depreciation of fixed assets is counted (ZCK11) Annual depreciation is calculated as 5% of building value and 10% of machinery value at 5 million.

33. 5. Depreciation of fixed assets
Depreciation of fixed assets is counted (ZCK11)

34. 6. Fixed Mfg Overhead
Fixed mfg overhead is counted (T-code: ZCK11)

35. 7. Inventory Storage Cost
Each team has 2 warehouse storage areas:
Finished product (02) - space for 250,000 boxes
Raw materials (88) - space for 250,000 kg of raw materials and space for 500,000 boxes and space for 500,000 bags
Additional warehouse space can be rented:
100,000 boxes of finished products (or part € 200/step (less than € 0.01 per box per step)
100,000 kg (or part € 350/step (more expensive because it's raw food product)
100,000 boxes AND/OR bags (or part € 50 step
The cost of additional storage will be automatically billed, and paid immediately.

36. User Menu for Mfg Extension

37. User Menu for Mfg Extension

38. Participant’s Job Aid & Menu for Mfg Extension

39. Participant’s Job Aid & Menu for Mfg Extension

40. Data Analysis

41. Tools to Analyse Data
Tools to analyze data range from simple to complex
Reports and graphs
Advanced statistics forecasting models
Advanced optimization models and tools
Having the right people matters
Having data modeling 41

42. A Large Quantity of Quality Data
All analytic methods feeds on data – in large quantity and good quality
Having good data can be turned into a competitive advantage
Integrated organizations have a lot of data available, they must learn to exploit it 42

43. Interpreting Data
Skills are required to create appropriate graphs, reports, and statistical analysis
Skills are required to interpret correctly graphs, reports and statistics
Skills are required to make the appropriate decisions from the analytics 43

44. Using Queries to Analyse Data
Queries contain 2 basic elements:
Key Figures, KPI
Dimensions.
Margins as a function of time
Sales by country 44

45. An Example
Dimensions
Dimensions
Measures
At the heart of a 45

46. Elements of a Info Cube
Key figures
Dimensions 46

47. Types of Measures
Additive : it makes sense to sum the measures across all dimensions
Quantity sold across Region, Store, Salesperson, Date, Product …
semi additive : additive only across certain dimensions
Quantity on hand is not additive over Date, but it is additive across Store and Product
non additive : cannot be summed across any dimensions
A ratio, a percentage
A measure that is non additive on one dimension may be the object of other data aggregations
Average, Min, Max of quantities on hand over time 47

48. How DW Differs from a Transactional DB
Characteristic DB DW
Operation
Real-time, transactional
Decision support, strategic analysis
Model
Entity-Relationship
Star Schema
Redundant data
Designed to avoid
Permitted
Data
Raw data, current
Aggregated, Historical data,
# of users
Many
Few
Update
Immediate
Deferred
Calculated fields
None stored
Many stored
Mental model
Tabular
Hypercube
Queries
Simple, some saved
Complex, many saved
Operations
Read / Write
Read Only
Size
Go (Gigabytes)
To(Terabytes) 48

49. Doing Business Intelligence (BI) with ERPsim Data in MS Access

50. How to use ERPsimData.accdb
Step 1:
Download the ACCESS file ERPsimData.accdb from the site provided by your instructor
Save the file ERPsimData.accdb on your hard drive
You may open it to check its content 50

51. How to use ERPsimData.accdb
Step 2:
Use Pivot Table or normal table in Excel to analyze data
Open an Excel file
In the Excel file, on the “Data” tab, click on the “From Access” button.
Look for ERPsimData.accdb on your hard drive
Select the query or table you want to analyze 51

52. How to use ERPsimData.accdb
Step 2 (cont’d):
Select Pivot or normal Table report
Select the fields you want to use in your report 52

53. Exploring Data

54. Plant A: An overview 54

55. Plant B : an Overview 55

56. Plant C an Overview 56

57. Trying to Maintain Stocks for All Products57

58. Large Variations in Sales per Step58

59. Small Production Runs 59

60. Long production runs 60

61. Manipulating Graphs

62. Key Figure or KPI Y-dimension62

63. X (Row) dimension 63

64. Multiple Series: Column Dimension64

65. Graph type: Scattered Bars65

66. Graph Type: Scattered Lines66

67. Graph Type: Lines 67

68. Graph Type: 3D Bars 68 68

69. An example 69

70. BI Questions

71. BI Question 1 Current assets include
(i) cash
(ii) receivables
(iii) raw material inventory
(iv) finished product inventory
How well have the teams performed in managing the current assets over time?
Hint: Use the financial data 71 71

72. BI Question 2
Did the winning team bring their highest margin product to market first?
Did they charge a price premium while they were first to market?
Can you see the impact of a competitor entering the market?
Hint: Use the operational data 72 72

73. BI Question 3
One objective of materials management is to make sure that raw materials are available for production when needed
Which company has managed this process well as shown by having the largest variety of products in stock?
Hint: Use inventory data by products over time 73 73

74. BI Question 4
Companies may have different strategies for production management
Some may prefer long productions to minimize setup losses, while others may prefer shorter runs to respond more quickly to market opportunities
Can you determine what strategies were used by each team?
Where there any production disruptions?
Hint: Use production data over time and products. Filter for each individual company. 74 74

75. BI Question 5 Companies want to maximize sales
If sales are too high, the price may be too low, and vice versa
Can you tell sales is affected by prices? 75 75

76. BI Question 6
Who owns the market (as measured by market share) for each product?
Hint: Use sales data filtered by product with drilldown across plant
Use a stacked area chart 76 76

77. Game Layout
30 steps
30 min

78. 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

79. Login Information Client 265 Login : ext_$# $ = Team,
# = User 1 to User 4
Password: ERPSIM