Case Study 4:
Operate a Manufacturing
Company II
(Extension)
EGN 5621
Enterprise Systems Collaboration
(Professional MSEM)
Fall, 2011
Corporate Roles Designation


CEO
◦ Check Financial Statement
◦ Make investment for production
◦ Check summary sales report
◦ Check price market report
Market & Sales Manager
◦ Check sales order report
◦ Check summary sales report
◦ Check price market report
◦ Maintain and change market expenditure
◦ Change selling prices for finished goods
2
Corporate Roles Designation

Production and Planning Manager
◦
◦
◦
◦
◦
◦
◦

Create planned independent requirement
Run MRP
Release production orders
Modify BOM
Monitor production schedule
Check product costs
Check raw materials cost per production order
MM Manager
◦
◦
◦
◦
◦
Convert purchase requisitions to purchase orders
Track PO report
Check MRP results
Check individual stock level
Check inventory report
3
Tasks for the Manufacturing Case Study
No
Roles
Functions
1
CEO
2
Sales & Marketing Manager
3
Production & Planning
Manager
Check financial statement
Create GL Post (Investment)
Check Price market report
Check Summary sales report
Check Sales order report
Check Summary sales report
Check Price market report
Maintain marketing expense
Change selling price for FG
Create planned independent
Requirements
Run MRP
Release production orders
Modify BOM
Monitor production schedule
Check finished product cost
Check RM cost per Prod. order
Automatically generate POs
Track PO report
Display MRP results
Check stock level
Check Inventory report
4
MM Manager
Warehouse Management
Transaction
Code
F.01
FB50
ZMarket
ZVC2
ZVA05
ZVC2
ZMarket
ZADS
VK32
MD61
MD01
CO41
ZCS02
ZCOOIS
ZCK11
ZKSB1
ME59N
ZME2N
MD07
MD04
ZMB52
What’s New in Mfg Extension?
Company can design own products based
on specified rules
2. Distribution channel 14 is available
3. Company can make investment to improve
production capacity
1.
1) Reduce set-up time
2) Increase production capacity
4.
No starting inventory. Each company
should do planning, run MRP, and convert
purchase requisitions to POs before
starting game.
What’s New in Mfg Extension?
Depreciation of fixed assets is assessed
6. Fixed overheads are assessed
7. Inventory storage cost for excess stock is
assessed
5.
1. Develop New Products
At beginning of the game, each company has six
finished products with a preset recipe for each
product.
 You can change the recipe of a product during the
simulation by changing its bill of material with Tcode ZCS02. During simulation, your company
always has six BOMs of finished products.
 If your company still has inventory of the finished
product, the system doesn’t allow you to change
its BOM.
 Your new product must meet the guideline for
recipes.
 When the system accepts your changes in BOM, it
will change the description in the material master
7
to match the new content and weight.

Muesli Manufacturing
Association Label
Regulation
List of Master Data Created for the
Simulation
Master Data
Alphanumeric codes
6 Finished products
$$-F01
$$-F02
$$-F03
$$-F04
$$-F05
$$-F06
6 Raw materials
$$-R01
$$-R02
$$-R03
$$-R04
$$-R05
$$-R06
4 Packaging materials
$$-P01
$$-P02
$$-P03
$$-P04
2 Vendors
V01
V02
6 Bill of materials
$$-F01
$$-F02
$$-F03
$$-F04
$$-F05
$$-F06
1 Work center
$$
6 Routings
$$-F01
$$-F02
$$-F03
$$-F04
$$-F05
$$-F06
3 x 6 price lists (DC 10, 12, and
14)
$$-F01
$$-F02
$$-F03
$$-F04
$$-F05
$$-F06
6 info-records and 6 source
lists for raw materials
V01-$$-R01
V01-$$-R02
V01-$$-R03
V01-$$-R04
V01-$$-R05
V01-$$-R06
4 info-records and 4 source
lists for packaging materials
V02-$$-P01
V02-$$-P02
V02-$$-P03
V04-$$-P04
1 profit center
$$
1 coster center
$$
Change BOM for New Product
10
Change BOM for New Product
11
2. Distribution Channel 14





Only buy small boxes (0.5 kg)
Less price sensitive
Sensitive to advertising
Payment delay of 5 to 15 steps
Will have a stronger preference for 3
particular products during the simulation
12
3. Investment for Improvement of
Production Capacity
1) Reduce set-up time
The default set-up time is 12 hours for
changing product in your production line. If
you want to keep product variety and wish to
run small production batches, you can make
investment to reduce the set-up time.
The following table shows the set-up time as
a function of your investment. If your
investment is zero, the set-up time is 12
hours. If you invest 44,117.75, then the setup time reduces to 10.5 hours.
13
Investment for Reducing Set-up
Time
14
Investment for Reducing Set-up
Time in the First Quater
In the first quarter, every company must
invest 5,000 euros to reduce set-up time.
After the first investment, it’s your company
decision if to make more investment.
15
Investment in SAP to Reduce Set-up
Time
Use T-code: FB50
G/L Account: 113300 (Weizen bank)
D/C:
credit
Amount: 5,000 (first investment)
G/L Account: 478000 (Lean manufacturing
expense)
D/C:
debit
Amount:
5,000 (first investment)
Cost center: $$
16
Investment for Reducing Set-up
Time in SAP
17
Investment for Increasing
Production Capacity
Your company can make investment into
production equipments to increase your
production capacity. This may be your
strategic weapon.
When you start the simulation, you have 5
million euro production equipment with a
production capacity of 21,000 boxes per day.
18
Increase Production Capacity
For an investment of 100,000 euros you can
increase production capacity by 400 boxes per
day. In order to obtain a daily capacity of 25,000
boxes, you need to invest 1 million euros.
Formula for capacity improvement:
Total daily capacity = 21,000 + (0.004 x
additional machinery investment).
19
Investment for Improving
Production Capacity in SAP
Use T-code: FB50
G/L Account: 113300 (Weizen bank)
D/C:
credit
Amount:
Your investment
G/L Account: 11000 (Machinery & equipment)
D/C:
debit
Amount:
Your investment
20
Investment to Improve Production
Capacity in SAP
21
4. No Starting Inventory.
Each company should plan and complete the following
steps before simulation:
- Planning for finished products (T-code: MD61),
- Run MRP (T-code, MD01), and
- Convert purchase requisitions to Purchase orders (Tcode:ME59N)
Create Planned Independent
Requirement for 6 Finished
Products (MD61)
Create Planned Independent
Requirement for 6 Finished
Products (MD61)
Execute MRP
Create Purchase Orders from
Purchase Requisitions (ME59N)
Convert Purchase Requisitions
into Purchase Orders
Convert Planned Orders to
Production Orders

After simulation started and you received
required raw and packaging materials,
your planning manager needs to convert
planned orders to production orders (Tcode: CO41)
Collective Conversion of Planned
Order (CO41)
Release Production Order
Release Production Orders (CO41)
5. Depreciation of fixed assets

Depreciation of fixed assets is assessed
(ZCK11)

Annual depreciation is calculated as 5% of
building value and 10% of machinery
value at 5 million.
5. Depreciation of fixed assets
Depreciation of fixed assets is assessed (ZCK11)
6. Fixed Mfg Overhead
Fixed mfg overhead is assessed (T-code: ZCK11)
7. Inventory Storage Cost

Each team has 2 warehouse storage areas:
◦ Finished product (02) - space for 250,000 boxes
◦ Raw materials (88) - space for 250,000 kg of raw
materials and space for 500,000 boxes and space for
500,000 bags

Additional warehouse space can be rented:
◦ 100,000 boxes of finished products (or part thereof), @
€ 200/step (less than € 0.01 per box per step)
◦ 100,000 kg (or part thereof), @ € 350/step (more
expensive because it's raw food product)
◦ 100,000 boxes AND/OR bags (or part thereof), @ € 50
step
◦ The cost of additional storage will be automatically billed,
and paid immediately.
User Menu for Mfg Extension
User Menu for Mfg Extension
Participant’s Job Aid & Menu for Mfg Extension
Participant’s Job Aid & Menu for Mfg Extension
Game Layout
30 min
30 steps
30 min
30 steps
30 min
30 steps
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
Login Information
Client 265
Login : ext_$#
$ = Team,
# = User 1 to User 4
Password: ERPSIM