Case Study 2: Operate a Logistics Company

1. Case Study 2:Operate a Logistics Company EGN 5621 Enterprise Systems Collaboration Summer B, 2014

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

3. 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. Logistics Game

4. DairyProducts

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

6. Products Details

7. Eachregion has unique preferencesrelated to productsitwishes to purchasefromyourcompany. Yet, preferences change everygame. The Market’sPreferences

8. You may set up a price for each of yourproducts. The price for eachproductwillapply to all 3 regions. One Price List in Distribution Channel 16

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

10. You must select a logistics strategy to make your products available for sales through your regional storage locations. OR LogisticsStrategy

11. A Push strategy specifies the quantity of each product to be delivered to each area and the number of days between deliveries. A Push LogisticsStrategy

12. Simulator will deliver the chosen quantity to your three storage locations every time in the defined number of 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 Push

13. A Pull strategy specifies the target quantities for each product in each area and the number of days between deliveries. A Pull LogisticsStrategy

14. The system 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. Pull

15. Each round will last 10 days • Each PO costs €1,000 and eachtransferfrom the main warehouse to a regional location costs €100 • There is an interest charge • There is no initial inventory for each product. • No initial 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 the regional storage location. • You are competing against other teams. • The objective is to maximize the profit. Rules of the Game

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

17. 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 product (VK32) • Check reports • Purchase order report (ZME2N) • Inventory report (ZMB52) • Summary sales report (ZVC2) • Sales report (ZVA05) • Financial statement (F.01) Activities in Each Company

18. Make sure each regional warehouse has the required stock needed to meet demand while reducing the delivery, the number of purchase orders, and warehousing cost. • In order to compete, each company has a good operations strategy. Manager must coordinate their efforts timely, respond to market requirement/changes quickly, and use the ERP system effectively. Activities in Each Company

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

20. Job Aids (1/2)

21. Job Aids (2/2)

22. Client: 495 Login: $# Where $ is your team letter And # is your number For Pilot run: $ =I, J, K, L For Real run: $ = M, N, O, P Password: ERPSIM You will have to change your password the first time you enter Login information

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

24. Logistics Game: Round 1

25. Participant’s job aid & Menu

26. First Screen Second Screen Forecasting

27. Execute MRP

28. Convert purchase requisitions into purchase orders

29. Track purchase orders

30. Logistics Transfer Planning

31. Stock in material overview

32. 16 Maintain Prices for DC 16

33. Check sales summary report

34. Check financial statement

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

36. Debriefing:Round 1

37. What were your first impressions? • How did your operations strategy work? • How was the communication during Round 1? • What information was exchanged among teammates? • Who made decisions in your team? • Were you satisfied with the team organisation of your group? Questions?

38. Logistics Game: Round 2

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

40. Debriefing:Round 2

41. How was the communications during Round 2? • How did your operations strategy work? • What information was exchanged among teammates? • Who made decisions in your team? • Were you satisfied with the team organization of your group? Questions?

42. Logistics Game: Round 3

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

44. Debriefing:Round 3 - 6

45. How was the communication during Rounds 3 - 6? • How did your operations strategy work? • What information was exchanged among team mates? • Who made the decisions in your team? • Were you satisfied with the team organisation of your group? Questions?

46. Did your role and relevance within your team changed from Round 3 to Round 6? • How was a decision made? • Based on your experience, what is an Entreprise system? • How can an enterprise system tranform an organization? Questions?

47. 1. Presentation of performance analysis for case 2: Run a Logistics company (a hard copy and an electronic file in MS Power point) 2. A written report for Case 2 (a hard copy and an electronic file in MS Word)) Team Homework: (Due date -7/14/2014)