Learning Supply Chain Management Playing

1

Industrial Management School

Versione 2013

Festo Academy Italia e BusinessGamesOnLine

Supply Chain Game 2013

http://www.businessgamesonline.com/uk_bgol/spec_supplychaingame.aspx

http://www.businessgamesonline.com/uk_bgol/default.aspx

2


SupplyChain, is an interactive business challenge where 3 or more companies compete in the same market environment. The companies are vertically integrated and are involved in the whole process from the purchase of raw materials to the sale to their 3 different types of customers. This business challenge has been created to provide a specific analysis on the different aspects of the Supply Chain. The company managers have to face situations and decisions concerning the use of internal recosurses or the external support, and will have to manage the different markets (Make-to-Stock; Make-To-Buy) on the base of the existing lead time. The Supply Chain is a mix of strategic decisions (which market ? How to position price and which marketing leverage to use ?) and operative actions ( How much to purchase, invest in logistics, outlets, transports, which price ……).

Business Game SCG – The Concept

3


Si inizia a Febbraio 2013. All’inizio di ogni mese ci sono informazioni,

decisioni da prendere per raggiungere risultati di vendita, fatturato, economici.

Business Game SCG – The Contest

• Inizio FEBBRAIO 2013

http://www.businessgamesonline.com/uk_bgol/spec_supplychaingame.aspx

4


The Companies objectives are: Profit Maximization (which is the global amount of profit generated within the virtual simulated periods, and is available in the Balance Sheet under “Retained Earnings”) Share Value Maximization (which is link to a mix of factor including profit, market share, assets, relationship between creditors and debtors, stock level).

Business Game SCG – The Objectives

5


Il Super Supply Chain Team è quello

che raggiunge il miglior profitto, fatturato, quota di mercato alla

chiusura delle attività.

• Chiusura del 2013

Business Game SCG – The Objectives

6


Ogni compagnia produce tre prodotti

• HydroBox (box doccia attrezzati) Realizzati con ceramica e plexiglass

• Ruby (rubinetterie) Realizzati in metallo

• Sany (sanitari in ceramica) Realizzati in ceramica

Business Game SCG – Scenario

7


I prodotti vengono venduti attraverso 3 canali

• Rete diretta: negozi, installatori, grande distribuzione

Si vende attraverso agenti con una rete di venditori diretti

I clienti decidono in base a prezzo, qualità, immagine-brand

• Appalti: saltuariamente vengono indette da ospedali, enti pubblici, gare per la fornitura di

un prodotto Le gare si vincono in base a prezzo e affidabilità

dell’azienda

• Grossisti: che richiedono al mercato mensilmente delle quantità di prodotto

L’acquisto viene ripartito tra i fornitori in base a prezzo, qualità, termini di pagamento

Business Game SCG – The Market

8

Stock Materie Prime

Materie prime Locali

Produzione di semilavorati

Finitura dei prodotti

APPALTI

DIRETTO

GROSSISTI

Finitura speciale

MTO

Mano d’Opera

Impianti

Mat 1e Import

Stock di semilavorati

Stock Prodotti Finiti

I

Finitura standard

Acquisto da terzisti

Il Processo: Macrorelazioni

9


Vincoli di Processo Lead Time

The Supply Game is based on a 1-year-length game. The new managers start their activity at the beginning of Month 2 (February) on the base of the company structure showing all information at the end of period 1 (January). The Managers take decisions untill period 12 (December). This is the example of the trend of the 3 markets (Retail, Wholesalers, Tenders).

Business Game SCG – The Timeline

10


Several factors and rules limits the action of the companies. Here is the full list of these elements. Cash - A lack of Cash (ratio between cash available and needed) can reduce the investments and expenditures of the period; can be solved if the bank assist the company with additional loans Production -The Semi-finished Goods production is limited by the production capacity (hours), raw materials availability (units), cash availability (euro). -The Finished Goods production is limited by the manpower capacity (hours), the Semi-Finished Goods availability (the company can finish only what coming from stock of the previous period and 50% of what semi-finished in the period). -Production can be enlarged only at specific stages: Leased machines can be ordered only in Month 1 of the Quarter and are delivered immediately; Owned machines can be ordered in Month 1 and 2 and will be delivered in the Month 1 of the following Quarter.

Business Game SCG – Time & Space Constraints

11


Transport and logistics - The trasport are NOT limiting sales; but, if the company does not cover transport with internal capacity the goods is transported by external forwarders at a higher price. -The finished products can be sold in the retailing shop for as maximum of 60% of the goods available - A lack of internal trasport capacity does NOT limit sales; if necessary, the goods is transported by external forwarders at a higher price. -The finished products can be sold in the retailing shop for as maximum of 60% of the goods available (Production of MTB + Stock of MTB + Purchase of Finished Goods – Sales to Wholesalers). -The 60% of maximum sales could drop if the shops of the company do not have enough space to contains all the goods available (the shops have a limited space capacity); to avoid this problem the company may “outsource” logistics to limit problems refered to a lack of space.

Sales - Sales volumes can be limited by the above mentioned lack of Space and by a lack of HR (staff and Sales persons) effectiveness; when the effectiveness is lower than 90% the system register a potential reduction of sales in the retail market.

Business Game SCG – Time & Space Constraints (2)

12


Sales -In the wholesale market it is possible to sell only the goods finished in the period for the MTB markets. It is not possible to sell to the wholesalers the goods remained in stock at the end of the previous Month. -It is not possible to enter into the Wholesaler market if the offer does not match the quality and price requested levels. -In the Tender, the company may participate only if it has completed the delivery of previous tender won for the same product. - When a company win a tender, it is obliged to deliver the goods proportionally in the number of months requested (eg for a tender of 10.000 to be supplied in 2 months, the company cannot supply more than 5.000 units per month).

Business Game SCG – Time & Space Constraints (3)

13


-In the Supply Chain Game the value used refers to:

-Units Number of shops, persons, products, raw materials. -Age Used to identify machines capacity per type: Leased machines and Owned machines. -% The % is used to identify values included between 1 and 100%. It is used for example to determine the quality of the product, the advertising image, the customer service level, the HR effectiveness,….) -Index It is used to identify the quality level of the companies offered goods. -In the Tender it is used to determine the best offer (based on price and reliability) -In the Wholesalers to rank the companies on the base of price, quality and terms of payments. -In the Retail market to establish the index of attractiveness of the shops (capacity to attract potential customers) and the index of competitiveness (potential sales level). -Euro -Used for all the economic values

14


The Managers operates in the Supply Chain virtual environment. The On-line system shows information at video in the CE and 5 functional offices : •On video - each manager can analyse data for the relevant function, available also under graphic format.

•In Report - it is possible to print a resume of the information available in the functions in a compacted form.

Business Game SCG – COMPANIES’ MANAGERS AND INFORMATION

15

OPERATIONS

Source

Distribution

Production & Planning

I

Business Game - SCG – Roles

Marketing

Sales

General manager

DECISIONI DEL

RUOLO

INFORMAZIONI SUL WEB

Finance

16


The On-Line system replicates a virtual environment where the information and decisions are located in several virtual offices: • Operation which is divided in Purchase and Production • Logistics divided in Stock Management and Transport and Outsourcing • Distribution including Shops and HR Management; • Finance which controls economic and financial performance • Marketing is the market sensor and the manager for the two intermediate markets (Wholesalers / Tenders).

Above all the General Manager office, which monitors the main performance and control the full set of decisions.

Business Game SCG – The Company Functions

17


The company defines every Month the action plan, which includes the decisions for the 5 functions.. The Decisions Form are available in the Board Room

The Companies Actions will lead to the results of the month. The Business Game simulator calculates the reaction of the market on the base of all the decisions and update the company set of results. Each company will receive the feed-back of their actions only after the simulator processing. To help the company decision making there are 3 Check On Line Calculation that allow the managers to monitor the cash capacity, the production capacity and the manpower capacity.

Business Game SCG – The Decisions

18


The Operation Managers decide: • the purchase of Raw Materials (Local and from importers), • the (emergency) purchase of finished goods (from other suppliers) • the semi-finished prodution level • the finishing level for MTB (Make-to-Buy) and MTO (Make-to-Order) • the production capacity (buying-selling owned machines/ leasing new machines) • the production investments on “Lean” and Quality Level AREA OF INTEREST OF THE OPERATION MANAGERS • politics on quality (based on the type of raw materials, the investments in AT to improve quality of the produced goods, • cost control (defining the suppliers of raw materials, the volumes of finished goods bought, the use of production capacity, the type of machines used) • responsibility for the time of delivery of the products to the 3 different channels (production of semi-finished goods, finishing goods for the MTB and MTO)

Business Game SCG – Operation manager

19


The Retail-Distribution Managers decide: •Transports, • Outsourcing of Logistics (Percentage of Outsourcing allocated to manage the volumes of production and stocks) • Location and Dimensioning Retail Shops (Open/Close central and/or out-of-town shops) • HR size (number of staff and sales persons in the shops, and training) • Promotions (in the shops per line of product sold to final customers) • Customer service investments (used to attract and support shops’ cusotmers) AREA OF INTEREST OF THE DISTRIBUTION MANAGERS •Stock Levels (Raw materials, Semi-finished Goods, Finished Goods for MTB) • Cost of Logistics (internal and outsourcing) • Shop sizing and sales capacity (related to the sales forecasted by the marketing managers) • Shop assistants effectiveness (internal and outsourcing) • Customer service level (positioning of the customer support effectiveness)

Business Game SCG – Distribution Manager Decision

20


The Marketing Managers decide: • Advertising expenditures (on the retail market) • Price for the retail market (selling price of goods in the shops) • Wholesalers (volumes offered to the wholesalers, price, terms of payments) • Tenders (application to the tender and price offered) AREA OF INTEREST OF THE MARKETING MANAGERS • Retail market demand and sales (depending on market seasonality and companies offer) Marketing information (related to market trends, competitive factors of success) • Retail competitive and attraction levels (based on the positioning on the competitive factors) • Company image (given by the perception on advertising efforts) • Wholesalers demand and sales (showing the quantities bought compared to the period demand) • Tender and pending contracts/deliveries (containing the tenders ranking and the volume to deliver for the tenders won)

Business Game SCG – Marketing Manager Decision

21


The Financial Managers decide: • Loans level • Green issues AREA OF INTEREST OF THE FINANCE MANAGERS • Profit and Loss (showing the revenues and cost per month and cumulative over the year) • Balance sheet (including assets, liabilities and net capital, including the profit for the year) • Cash Flow (showing the cash available and the credits/debts shown per month) • Economic Ratios and Share Value (displaying all the economic indicators such as Ebit, ROI, ROE, ROS,……)

Business Game SCG – Fiannce Manager Decision