Integrated Business Processes: Manufacturing Scenario

Integrated Business Processes
Manufacturing Scenario
Developed by Derick Lyle, MBA
Last Update: July, 2017 Serious games to learn enterprise

systems and business analytics
Integrated Business
Processes
with ERPsim Manufacturing 1. Overview and Objectives
2. Planning Process
3. Procurement Process
4. Production Process
5. Sales Process
6. Simulator Automated Process
ERPsim Academic Release: 2017-2018
© Léger et al. 2004-2016. ERPsim is a proprietary technology developed by
researchers at HEC Montréal, École Polytechnique de Montréal and Western
Michigan Univ. Visit erpsim.hec.ca for more information.
Overview and
Objectives After completing this exercise, you will
be able to:
• Define what a business process is
• Describe the 3 types of business processes
• Describe the operational and supporting processes of
Muesli AG
• Understand Business Process Modelling Notation
representations of Muesli AG processes
• Perform the operational and supporting processes of
Muesli AG using SAP software
Business Process Definition
A structured, measured set of activities designed to produce a specific output for a
particular customer or market. A process is a specific ordering of work activities
across time and space, with a beginning and an end, and clearly defined inputs
and outputs. Processes are the structure by which an organization does what is
necessary to produce value for its customers.
Thomas Davenport
Process Innovation: Reengineering work through information technology
(1993) Harvard Business School Press, Boston

Commercial version
© Léger et al. 2004-2016. ERPsim is a proprietary technology developed by researchers at HEC Montréal, powered by 4
École Polytechnique de Montréal and Western Michigan Univ. Visit erpsim.hec.ca for more information.
3 Types of Business Processes
• Management processes, the processes that govern the operation of a system.
Typical management processes include "corporate governance" and "strategic
management".
• Operational processes, processes that constitute the core business and create the
primary value stream. For example, taking orders from customers.
• Supporting processes, which support the core processes. For
example, accounting.
Mark von Rosing, Henrik von Scheel, August-Wilhelm Scheer
The Complete Business Process Handbook
(2014) Morgan Kaufmann

Commercial version
Exercise Overview
The scope of this exercise is to complete a full business cycle (the operational and supporting
processes) within the context of the ERPsim Manufacturing Extended scenario, using SAP software.
• The cycle begins with planning, where you will forecast how much of one finished product you
expect to sell in this cycle, and from this forecast generate two plans.
– A plan to produce the forecast amount of products, and
– A plan to buy the needed materials for that production plan
• After executing the planning process, you will complete the procurement process, where you will
order, receive and pay for the materials.
• Once the materials have been received and paid for, you will complete the production process,
turning raw materials into finished goods.
• Finally, you will complete the sales process, entering an order from a customer to sell some of
those goods, then ship specific items and an invoice to the customer, and ultimately receive
payment from the customer.

Commercial version
Business Process Modeling Notation (BPMN)
Process flow
Message flow Activity
Start of process
Parallel process split / decision
End of process
Data object
Intermediate
timer event
Collapsed sub-process
Text Annotation

Commercial version
BPMN: Job roles
• Lanes are used for different job roles
• One lane for each job role
• The role name is placed on the side or at the top of each lane
• Start, end, tasks, decisions etc. are all placed within the lanes
to show who is responsible for that task, decision, etc.
• Process flow arrows that cross lane boundaries represent the
handoff of responsibility from one role to another
• The visual similarity to swimming pool lanes is where the term
“swim-lane flow chart” comes from
• Also called a cross-functional flow chart

Commercial version
Muesli AG – Business Process Model
• This is a high level process model for the
activities of Muesli AG, as performed
with SAP software.
• Note the operational processes of
Planning, Procurement, Production and
Sales.
• Note the supporting processes of
Inventory Management and Accounting.
• Document creation and flow are not
presented here, but will be presented in
more detail as you perform each
process.

Commercial version
Exercise Assumptions
For simplicity, assume the following
• You will sell just one product, 1kg Original Muesli (material
code $$-F15)
• You will produce only 24,000 units of this product
• You will sell 1,000 units of this product to just one customer
TAKE NOTE :
This icon will be seen throughout the whole exercise.
It means you have to take note of a document number, or refer back to a document number
previously noted.

Commercial version
Planning
Process The goal of the planning process is to
make a sales forecast, and derive a
production and procurement plan to
meet that sales forecast.

Planning process

Commercial version
Planning process in SAP

Commercial version
Planning process
Create forecast for 24,000 units of $$-F15 (1kg Original Muesli)

Commercial version
Create forecast

Commercial version
Stock/Requirements Impact
Create forecast
1kg Original Muesli ($$-F15) 1kg Original Muesli ($$-F15)
MRP Element Receipt/Reqmt Available Qty MRP Element Receipt/Reqmt Available Qty
Stock 0 Stock 0
IndReq 24,000- 24,000-
Oats ($$-R05) Oats ($$-R05)

Stock 0 Stock 0
Before After
Commercial version
Planning process
Run the MRP

Commercial version
Execute MRP

Commercial version
Execute MRP
Stock 0 Stock 0
IndReq 24,000- 24,000- PldOrd 24,000 24,000
IndReq 24,000- 0
Oats ($$-R05) Oats ($$-R05)

Stock 0 Stock 0
PurRqs 12,000 12,000
DepReq 12,000- 0
Before After
Commercial version
Procurement
Process The goal of the procurement process is to
execute the procurement plan created by
the planning process, so that raw materials
are available for production of finished
products.
The necessary materials must be ordered;
received into the warehouse once the
supplier delivers them; and the supplier
must be paid when the invoice is due.
Procurement process

Commercial version
Procurement process in SAP

Commercial version
Place orders with suppliers
Place the orders with
the suppliers by
creating purchase
orders from the
purchase requisitions

Commercial version
Take note:
Write down the
two Purchase
Order numbers
assigned by the
system.
You will need
them later.

Commercial version

Stock 0 Stock 0
PldOrd 24,000 24,000 PldOrd 24,000 24,000
IndReq 24,000- 0 IndReq 24,000- 0
Oats ($$-R05) Oats ($$-R05)

Stock 0 Stock 0
PurRqs 12,000 12,000 POitem 12,000 12,000
DepReq 12,000- 0 DepReq 12,000- 0
Before After
Commercial version
Receive goods into inventory
Receive the goods into
inventory delivered by
FoodBroker Inc.
(supplier V01)
Place the goods in
storage location 88
(raw materials)
Refer to your notes:
You will need the purchase order
number you wrote down earlier.
It should be the first of the two –
the one for FoodBroker Inc.

Commercial version

Commercial version

Stock 0 Stock 0
PldOrd 24,000 24,000 PldOrd 24,000 24,000
IndReq 24,000- 0 IndReq 24,000- 0
Oats ($$-R05) Oats ($$-R05)

Stock 0 Stock 12,000
POitem 12,000 12,000 DepReq 12,000- 0
DepReq 12,000- 0
Before After
Commercial version
Financial Statements Impact

Before After

Commercial version
Enter supplier invoice
Enter the invoice into
the system sent by
FoodBroker Inc.
(supplier V01)

It should be the first of the two –
the one for FoodBroker Inc.

Commercial version
Take note:
Write down the
amount of the
invoice.
You will need it
later.

Commercial version

Before After

Commercial version
Pay supplier invoice
Pay the invoice sent by
FoodBroker Inc.
(supplier V01).

You will need the amount of the
invoice you wrote down earlier.

Commercial version

Commercial version

Before After

Commercial version
Procurement process
Repeat the last 3 steps of
the procurement process,
this time for the second
supplier.
(V02-Continental Printing)
• Receive goods into
inventory
• Enter supplier invoice
• Pay supplier invoice
It should be the second of the
two – for Continental Printing.
Commercial version
Full procurement process

Before After

Commercial version
Production
Process The goal of the production process is to
execute the production plan created by the
planning process, so that products become
available for sale.
The necessary raw materials must be
available; production runs must be
scheduled; and once production occurs the
inventory balances in the system must be
updated to reflect the use of raw materials,
and creation of finished products.
Production process

Commercial version
Production process in SAP

Commercial version
Start a production run
Create one production run for $$-F15 (1kg Original Muesli)

Commercial version
Take note:
Write down the
Production Order
number
generated by the
system.
You will need it
later.

Commercial version

Stock 0 Stock 0
PldOrd 24,000 24,000 PrdOrd 24,000 24,000
IndReq 24,000- 0 IndReq 24,000- 0
Oats ($$-R05) Oats ($$-R05)

Stock 12,000 Stock 12,000
DepReq 12,000- 0 OrdRes 12,000- 0
Before After
Commercial version
Finish a production run
Complete the production run for $$-F15 (1kg Original Muesli)

Commercial version

Commercial version

Stock 0 Stock 24,000
PrdOrd 24,000 24,000 IndReq 24,000- 0
IndReq 24,000- 0
Oats ($$-R05) Oats ($$-R05)

Stock 12,000 Stock 0
OrdRes 12,000- 0
Before After
Commercial version

Before After
1
2

Commercial version
Sales Process The goal of the sales process is to receive
orders from customers and fulfil them.
The sales department must take the
order; pick finished product from the
warehouse when it is available; and
arrange for shipping to the customer’s
desired location. Accounting must
prepare and send an invoice; and receive
money against it once the customer has
sent payment.
Sales process

Commercial version
Sales Process in SAP

Commercial version
Create Sales Order
One of your hypermarket customers
(#80105 in distribution channel 10) calls
to place an order.
They order 1,000 units of 1kg Original
Muesli.
Enter this order into the system.

Commercial version
Create Sales Order
Take note:
Write down the
sales order number
generated by the
system after saving.
You will need it later.
Commercial version
Create Sales Order

IndReq 24,000- 0 CusOrd 1,000-
IndReq 24,000- 0
Oats ($$-R05) Oats ($$-R05)

Stock 0 Stock 0
Before After
Commercial version
Create Sales Delivery/Picking
It is now time to deliver the order.
Create a sales delivery document, and
pick the required stock against it for
shipping.
Finally, perform the goods issue to
finalise the shipment.

Commercial version
Take note:
Use the sales order
number you wrote
down before.
Write down the

delivery number
generated by the
system after saving.

Commercial version

CusOrd 1,000- IndReq 24,000- 1,000-
IndReq 24,000- 23,000
Oats ($$-R05) Oats ($$-R05)

Stock 0 Stock 0
Before After
Commercial version

Before After

Commercial version
Create Billing
Now that the items ordered have been
shipped to the customer, we also need
to send them an invoice.
Create the associated billing document
in the system.

Commercial version
Create Billing
Take note:
Use the delivery number you wrote
down before.
Write down the net value of the

invoice. You will need it later.

Commercial version
Create Billing
Before After

Commercial version
Process Incoming Payment
After some time, the customer will
receive the items, and eventually send
payment.
Update the system to reflect that the
customer has paid for their items.

Commercial version

Commercial version

Before After

Commercial version
Muesli AG – Automated Business Processes
• When playing the ERPsim
Manufacturing games, you must not
do all of the transactions yourself.
• The simulator automatically does
most of the business process, playing
the roles of vendors, customers,
warehouse, production and
accounting staff.
• This lets you focus on what is most
important – making good business
decisions!

Commercial version
Commercial version
© Léger et al. 2004-2016. ERPsim is a proprietary technology developed by researchers at HEC Montréal,
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Integrated Business Processes

Last Update: July, 2017 Serious games to learn enterprise

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

Create forecast for 24,000 units of $$-F15 (1kg Original Muesli)

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

Oats ($$-R05) Oats ($$-R05)

Run the MRP

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

Oats ($$-R05) Oats ($$-R05)

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

Place orders with suppliers

Oats ($$-R05) Oats ($$-R05)

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

Receive goods into inventory

Oats ($$-R05) Oats ($$-R05)

Receive goods into inventory

ERPsim Academic Release: 2017-2018

Refer to your notes:

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

Enter supplier invoice

ERPsim Academic Release: 2017-2018

Refer to your notes:

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

Pay supplier invoice

ERPsim Academic Release: 2017-2018

Full procurement process

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

Create one production run for $$-F15 (1kg Original Muesli)

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

Start a production run

Oats ($$-R05) Oats ($$-R05)

Complete the production run for $$-F15 (1kg Original Muesli)

ERPsim Academic Release: 2017-2018

ERPsim Academic Release: 2017-2018

Finish a production run

Oats ($$-R05) Oats ($$-R05)

Finish a production run

ERPsim Academic Release: 2017-2018