erp simulation game - archive

ERP Simulation GameProf. Ramesh BehlInternational Management Institute, New Delhi

SAP UNIVERSITY ALLIANCES ACADEMIC CONFERENCEINDIA 2010

© Léger et al. 2009. ERPsim is proprietary technology developed by researchers at HEC Montréal, École Polytechnique de Montréal and WesternMichigan Univ. ERPsim is owned by Polyvalor and Valorisation Gestion and commericialized by Baton Simulations. More info at erpsim.hec.caVersion : August 2009

Manufacturing game

Introductory Game

Prof. Ramesh Behl

Objective

The objective of the introductory game is toprovide a quick hands-on experience of anintegrated business process in order to get anoverview of both the ERP simulation game andof the SAP system.

Why ERPsim?

•It’s a powerful pedagogical tool to teach ERP concepts.•Students learn the nitty-gritty of the business transactions using thesimulated environment.•A simulation program was developed to automate:

(i) the sales process,(ii) the production process to account for production capacity, and(iii) the procurement process -- for delay in delivery & payment.

•The learning objectives of the ERP Simulation Game are threefold:• to develop a hands-on understanding of the concepts underlying

enterprise systems,• to experience the benefits of enterprise integration firsthand and• to develop technical skills at using ERP software.• To develop and manage multifunctional teams and execute strategy in

real-time business environment.

Prof. Ramesh Behl

What’s an ERP?ERP is an integrated suiteof software coveringvarious organizationalsystems for companiesacross industries. Theyfollow industry standardson software andconnectivity and aredeployable easily.

Each team of 4 players…

© SAP 2009 / Page 6

Running a make-to-stock company…

© SAP 2009 / Page 7

Before ERP systems

© SAP 2009 / Page 8

With an integrated enterprise system

© SAP 2009 / Page 9

Collaborating using the end-to-endpower of SAP !

© SAP 2009 / Page 10

Description of yournew company

Location of the 26 companies

Muesli Cereals

Product size

0.5 KG 1.0 KG

Your 6 products

40% wheat40% oat20% nut

1 box1 bag

35% wheat35% oat

10% raisin10% nut

5% strawberry5% blueberry

1 box1 bag

50% wheat50% oat

1 box1 bag

40% wheat40% oat

20% raisin1 box1 bag

40% wheat40% oat

20% strawberry1 box1 bag

40% wheat40% oat

20% blueberry1 box1 bag

Operations in the cash-to-cash cycle

DC10Hypermarkets

Buy only large boxes (1 kg)

Payment delay of 30 days

More sensitive to price

Less sensitive to advertising

No partial orders - Must be able to obtain the fullorder in order to buy from a particular plant.

Buy about 3 different products

© HEC Montréal 2009 / Page 17

DC12Grocery chains

Buy small boxes (0.5 kg) and large boxes (1 kg)

Variable payment delay between 15 to 20 days

Buy about 4 different products – seek to buy thosefrom a unique vendor

© HEC Montréal 2009 / Page 18

DC14Independent grocers

Only buy small boxes (0.5 kg)

Less price sensitive

Sensitive to advertising

Variable payment delay between 5 to 30 days

Buy about 2 different products

© HEC Montréal 2009 / Page 19

German market

NorthDC10: 2 retailersDC12: 19 retailers

SouthDC10: 7 retailersDC12: 23 retailers

WestDC10: 3 retailersDC12: 17 retailers

Review of the major rules

You may not change the recipe of a product if you are still carryinginventory

Interest payment and loan renegotiation

Customers do not change throughout the game, hence you may learnfrom their past behaviour

The company displaying the highest shareholder’s equity at the endof the simulation wins the game

You must behave ethically at all times

At the end of the game, raw material and finished goods inventory willbe sold out at a reduced price (optional)

Elements of a winning strategy

Use the ERP system efficiently

Do not run out of stock

Delays, production capacities and liquidity constraintsare important elements of the game

Exploration and exploitation

Team organization is more important than you think

Have fun!

Game layout

30 days30 min

30 days30 min

30 days30 min

Rules of the Game•Each quarter will be of 30 virtual days (approx 1 min per day)

•End-of-quarter inventory is carried over to the next quarter

•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

SAP Navigation

ABC of Enterprise systems

•An enterprise system is build around an integrated database

•A system such as SAP contains tens of thousands data tables

•When a user creates, changes or views data in the system, heor she performs a transaction

•Data changed or created by one user can be exploited by allother users (ex. reporting, tracking, execution of orders, etc.)

•All transactions are traceable, transactions with financialimpacts can be reversed, never erased

User interface

•Users interact with the enterprise system throughtransactions.

•A large number of pre-programmed transactions exist in SAP

•Each transaction has a transaction code – one can call atransaction if one knows the transaction code

•The SAP menuallows to browse and find the desiredtransaction

•One can create a user menu or a list of favourites with thecommonly used transactions

SAP Menu & Navigation

Extras / Settings / Display technical names

Reports and queries

•Reports and queries are transactions that allow usersto view existing data

•A typical query is performed as follows:• In the first page of the transaction, you must enter theselection 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

Entering new data

Some transactions are designed to change or createnew data (change forecast, release purchasing orders,change sale price, etc.)

The interface varies according to data required by thesystem

The system will not allow you to save information if allthe compulsory fields have not been filled

You must save/release/confirm before exiting thetransaction

Other useful buttons

Use the navigation buttons to go back or get out of atransaction

You can open up to 6 sessions. Click on to open anew session

Delete , search , select all , view ,enter .

Participant’s Job Aid

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 on your Job aid.

Login information

Client will be providedby the instructor

Login : intro_$ #Where

$ = Team,# = User 1 to User 4

ERPSIM

SAP Menu & Navigation

Introductory Game:Quarter 1

30 days30 min

Cost, inventory & initial pricing

Material $$-F01 $$-F02 $$-F03 $$-F04 $$-F05 $$-F06

Name

Nut Muesli1.0 kg.

BlueberryMuesli1.0 kg.

StrawberryMuesli1.0 kg.

Raisin Muesli1.0 kg.

OriginalMuesli1.0 kg.

Mixed FruitMuesli1.0 kg.

Raw materialCost € 1.53 € 1.97 € 1.97 € 1.38 € 1.36 € 1.76

Standard cost € 2.48 € 3.09 € 3.09 € 2.50 € 2.65 € 2.89

Initial price 1012

€ 4.24€ 4.49

€ 5.18€ 5.43

€ 5.18€ 5.43

€ 3.92€ 4.17

€ 3.87€ 4.12

€ 4.75€ 5.00

Initial stock 100,000 100,000 100,000 100,000 100,000 100,000

The Introductory game:Quarter 1 (30 virtual 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 !

Participant’s job aid & Menu

Check product costing

Maintain Prices for DC 10 & 12

Marketing expense

Stock in material overview

Check sales summary report

Check sales order report

Check market report

Check financial statements

The Introductory game:Quarter 1 (30 virtual days)

We start the simulator for 30(virtual) days

Introductory game:Quarter 2

30 days30 min

Participant’s job aid & Menu

Release production order

Check production schedule

Parameters of the game

The Introductory game:Quarter 2 (30 virtual days)

We start the simulator for 30(virtual) days

Introductory game:Quarter 3

30 days30 min

Participant’s job aid & Menu

Forecasting

Execute MRP

After the MRP run

Convert purchase requisitions into purchase orders

Track purchase orders

The Introductory game:Quarter 3 (30 virtual days)

We start the simulator for thelast 30 (virtual) days

Debriefing

Prof. Ramesh Behl,IMI,New Delhirbehl@imi.edu

Thank You!