1. Overview and Case Study 2: ERPsim Manufacturing (I)
EGN Enterprise Systems Collaboration 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
Price market report
Check summary sales report
Check sales and market data
Check inventory Report
Marketing Manager
Marketing Expense Planning
Sales Manager
Change price
MM Manager
Forecast – create planned indep. Req.
MRP run
Automatic generation of POs
Purchase Order Tracking 3 3

4. Operations in the cash-to-cash cycle

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

6. Organizational elements

7. Organizational elements

8. Organizational elements

9. Organizational elements

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

11. Definition of master data (1/2)

12. Definition of master data (2/2)

13. List of master data to create for the simulation

14. Muesli Cereals
Wheat
Oats
Nuts
Raisins
Blueberries
Strawberries

15. Your 6 products 40% wheat 40% oat 20% nut 1 box 1 bag 40% wheat
20% raisin
1 box
1 bag
40% wheat
40% oat
20% blueberry
1 box
1 bag
50% wheat
50% oat
1 box
1 bag
35% wheat
35% oat
10% raisin
10% nut
5% strawberry
5% blueberry
1 box
1 bag
40% wheat
40% oat
20% strawberry
1 box
1 bag

16. Data model of product Y$$-F06

17. German market North West South DC10: 2 retailers DC12: 19 retailers

18. Muesli Manufacturing Association Label Regulation

19. Input Cost at low seasonal price

20. Number of stores by geographical area

21. 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

22. 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

23. 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

24. Number of retailers per Locations

25. Risk premium on credit ratings

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

27. Warehousing cost automatically charged
Each team has 3 warehouse storage areas:
Finished product - space for 250,000 boxes
Raw materials - space for 250,000 kg
Packaging - space for 1,000,000 boxes and space for 1,000,000 bags
Additional warehouse space can be rented:
100,000 boxes (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 thereof), @ € 50 step

28. Fixed costs per week

29. Review of the major rules
You may not change the recipe of a product if you are still carrying inventory
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.

30. Elements of a winning strategy
Use the ERP system efficiently
Do not run out of stock
Delays, production capacities and liquidity constraints are important elements of the game
Exploration and exploitation
Team organization is more important than you think

31. Game layout
30 steps
30 min

32. 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

33. Participant’s job aid

34. 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

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

36. SAP Menu & Navigation
Show some navigation. Begin by changing the setting to view the transaction codes. Browse the SAP menu to illustrate the depth of the system.

37. Introductory Game: Round 1
30 min
30 steps

38. Cost, inventory & initial pricing
Material
$$-F01
$$-F02
$$-F03
$$-F04
$$-F05
$$-F06
Name
Nut Muesli
1.0 kg.
Blueberry
Muesli
Strawberry
Raisin Muesli
Original
Mixed Fruit
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
€ 3.92
€ 4.17
€ 3.87
€ 4.12
€ 4.75
€ 5.00
Initial stock
100,000

39. The Introductory game: Round 1 (30 steps- days)
You need to maintain the price of your 6 products and invest in marketing.
What do you need to know in order to make that decision ?
You need to know how to :
Maintain price list
See available stock
Monitor sales orders
Monitor competitors
Monitor your profit !

40. Participant’s job aid & Menu

41. Check product costing

42. Maintain Prices for DC 10 & 12

43. Marketing expense

44. Stock in material overview

45. Check sales summary report

46. Check sales order report

47. Check market report

48. Check financial statements

49. The Introductory game: Round 1 (30 steps – 30 days)
We start the simulator for 30 steps
Change the prices for Distribution Channel (DC) 12 and 10.
The current price are 3 euros above cost of goods.

50. Introductory game: Round 2
30 min
30 steps

51. Participant’s job aid & Menu

52. Release production order

53. Check production schedule

54. Parameters of the game Present briefly the parameters of the game.
Mention that the parameters will be different in Game 2.

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

56. Introductory game: Round 3
30 min
30 steps

57. Participant’s job aid & Menu

58. Raw material cost per PO58

59. Forecasting

60. Execute MRP

61. After the MRP run

62. Convert purchase requisitions into purchase orders

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

64. Track purchase orders

65. Profit center analysis

66. Liquidity planning