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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
