Operate a Logistics Company Case Study 3 Overview

Operate a Logistics Company (Case Study 3) (Overview and first 3 Runs) EGN 5621 Enterprise Systems Collaboration Fall, 2011

Learning Objectives Gain the experience of running a logistics company Learn to use process management as a competitive edge. Learn to use the ERP system to support business strategies Appreciate the concepts and benefits of enterprise systems integration

Logistics Game Each team consists of up to 4 members. Each team operates a logistics company selling dairy products. Using standard reports, each team makes business decisions in order to optimize the profitability of its operations.

Dairy Products

Business Environment Design Each company owns a main warehouse which receives and stores products ithas purchased from a dairy cooperative.

Products Details

The Market’s Preferences Each region has unique preferences related to the products it wishes to purchase from your company. Preferences change every game.

One Price List in Distribution Channel 16 You will need to set-up prices for your products. The price for each product will be applied to all 3 regions.

Transportation Fees You will have to manage transportation fees with care in order to maximize your company’s profits. Cost : 1000 € per PO Cost : 100 € per regional tranfer

Logistics Strategy You must determine a logistics strategy in order to make your products available for sales through your regional storage location. OR

A Push Logistics Strategy A Push strategy specified the quantity of each product to be delivered to each area and the number of days between deliveries.

A Pull Logistics Strategy A Pull strategy specifies the target quantity for each product in each area and the number of days between deliveries.

Rules of the Game Each round will last 10 days (a bit more than one minute per day) No initial inventory for each product. End-of-round inventory is carried over to the next round. You may sell a product only if the stock is available through your regional storage location. You are competing against other teams. Your objective is to maximize profits.

Rules of the Game There are warehousing costs whenever the company’s total inventory exceeds 4, 000 boxes. The cost is 100 € per day for each additional 100 boxes exceeding 4, 000. Market size: About € 6, 000 per company per day. Lead time from suppliers: 1 – 3 days Lead time to customers: 1 – 3 days

Major Business Activities Plan for independent requirement for each finished product (MD 61) Run MRP (MD 01) Covert purchase requisitions to purchase orders (ME 59 N) Transfer stock (ZMb 1 B) Maintain prices for each products (VK 32) Check reports ◦ ◦ ◦ Purchase order report (ZME 2 N) Inventory report (ZMB 52) Summary sales report (ZVC 2) Sales report (ZVA 05) Financial statement (F. 01)

Major Business Activities Make sure that the regional warehouses have the required stock needed to meet demand while reducing the delivery, purchase order numbers, and warehouse cost. To excel, each company must have a good strategy; departments must coordinate their efforts efficiently, respond to market requirement/changes quickly, and use the ERP system effectively.

Game layout 15 min 10 days Round 1 Round … 15 min 10 days Round 8

Job Aids (1/2)

Job Aids (2/2)

Login information Client will be provided by the instructor Login: logistics_$# Where $ is your team letter And # is your number Password: ERPSIM You will have to change your password the first time you enter

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

Logistics Game: Round 1 15 min 10 days

Participant’s job aid & Menu

Forecasting First Screen Second Screen

Execute MRP

Convert purchase requisitions into purchase orders

Track purchase orders

Logistics Transfer Planning

Stock in material overview

Maintain Prices for DC 16 16

Check sales summary report

Check financial statement

Logistics Game: Round 1 15 min 10 days

The Logistics Game: Round 1 (10 days) Now start the simulator for 10 days

Logistics Game: Round 2 - 8 15 min 10 days