Title: Micromatic Simulation Team and Solo Versions
1Micromatic Simulation Team and Solo Versions
2Introduction
- Simulate the workings of a small manufacturing
business - Each team (? in total) will play against each
other - Computer just process each companies individual
decisions - Administrator (me) acts as owner, banker and
industry regulator, union negotiator, etc.
3Goals
- Understand the importance of a business and
strategic plan to guide business decisions - Understand the relationship between the three
main financial statements - Understand the relationship between marketing,
operations and finance - Understand the operational issues of production,
inventory, plant and labor force
4How to approach the simulation
- Management is a balance of art (intuition) and
science (analysis of facts) combined with group
dynamics - To Succeed you should
- Manage your time efficiently (stay focused)
- Manage your business do not guess at your
decisions
5To Succeed you should
- Learn from your failures
- Decision rules are the same for every round
- Must learn to capitalize of success and recover
from mistakes - Do not worry if a little confused at start
- you will quickly move up the learning curve
- Simulation requires applying your knowledge not
just listening as in lectures (fundamental shift)
6Four Functions of Management
Planning
Controlling
Organizing
Leading
7The Manager as a Planner
- Must develop the Vision
- Mission Statement Statement of Goals
Strategies - Who are the customers, what are their needs and
how will gain competitive advantage - What are your corporate values
Low price / High volume
Premium price / Low volume
8The Manager as a Planner
- In the Simulation you are responsible for the
planning in five main areas - Marketing
- Production
- Finance
- Sales Forecasting
- Management Dilemmas
9Marketing Production Finance Sales -
Dilemmas
- Marketing Decisions
- Pricing
- Price sensitive marketplace unless enticed by
stronger marketing efforts (oligopoly) - Promotion
- Local newspaper advertising, trade publications,
ad message, salesreps, WWW promotion, product
features and quality - Market Research
- Can buy Market Research Information (9 types)
- Price, local newspaper advertising, trade
publications, quality, WWW, salespersons,
product features, units sold, all by Company,
Future Sales Potential
10Marketing Production Finance Sales -
Dilemmas
- Production Decisions
- Ordering Raw Material (order carrying cost)
- Product Research and Development
- of Units to Produce
- Must have raw material, plant capacity of
workers - of production workers to hire, fire or layoff
- Begin with 54 workers can add overtime
- Amount of production capacity to buy or sell
- to invest in Training
- Improve productivity
11Marketing Production Finance Sales -
Dilemmas
- Finance Decisions
- Short Term Loans (Line of Credit)
- Finance current operations
- Long term Bonds (mortgages)
- Finance expansion of plant capacity
- Short Term investment deposits or withdrawals
- Can invest excess cash into stable conservative
short term securities
12Marketing Production Finance Sales -
Dilemmas
- Sales Forecast Decisions
- Based your quarterly sales forecast on your
current and future mix of pricing, advertising
investment in product quality - Use this forecast to set production parameters
but no guarantee you will reach these forecasts - If you misjudge your competitor's actions you
will not make the forecast - Added complication is you do not know what the
economy will do.
13Marketing Production Finance Sales -
Dilemmas
- Management Dilemmas
- Periodically will introduce various management
dilemmas - Range from employee theft to union relations to
substance abuse - There is no right answer in these dilemmas
- Responses to the dilemmas will result in
different consequences - Consequences can effect worker productivity,
sales, cost of raw materials or interest rates
14The Manager as an Organizer
- Must develop the Organizational Hierarchy
- Organizational Chart
- List of duties responsibilities for each
position - Staff the position
- Remember the dual role (student -gt friendship)
and (manager -gt work) - Teams that have an established chain of command
do better than the herd - Herds tend to take narrow view and focus only on
a single issue - Organized groups (specialized functions) tend to
keep broader focus and are much more efficient
15The Manager as a Leader
- Must decide how to influence and motivate members
- Goal Setting
- Balance of individuals goal and organizational
goal - Will you have management hierarchy or team
approach? - How will you manage your company?
- How will you balance the workload?
- Your peers will evaluate your leadership ability
in both a public and confidential manner - How will you motivate under performing members?
16The Manager as a Controller
- Must deal with issues of control
- Must establish a reporting system
- Must develop performance standards
- Must monitor key performance parameters and take
corrective steps if necessary - Must know the breakeven points for the
manufactured product
17The Business Environment
- All companies start from identical point
- All companies manufacture identical products
- Manufacturing process consists of forming raw
material (components) into finished consumer
product - Produce a commodity gt No customer or brand
loyalty gt you must earn each quarters sales
18Company publicly held
- Company is in start-up position only one
quarters (Quarter 0) info is available - John Emily Anderscott developed business but as
limited partners not allowed to perform any
management duties - You will deliver reports to the board of
directors - Initially no difference exists between you and
your competitors products - This will change as you modify promotion,
pricing, and product improvements
19The Simulation Environment
- Each decision period is 3 months (1 quarter)
- Teams make approximately 50 - 100 decisions per
Qtr - Three stages
- Forecasting Stage
- Test what-if and modify decisions until have
best case - Processing Stage
- Administrator accesses decisions of ALL companies
to determine market share allocations and
individual company profitability - Results Stage
- Teams analyze actual versus forecasted
performance. Use this analysis to forecast next
quarter.
20To Do
- Read in detail the summary and study the
decisions and reports and get familiar with the
software. - Decide on Company name, organizational structure,
individual job titles and responsibilities. - Begin to develop a mission statement strategy,
areas of responsibility, and duties
21My Role
- I will be your
- Banker
- Board of Directors
- Regulatory Advisor
- Union President
- And other roles as necessary
22As Administrator I Can Control
- Economic variables (industry demand, costs, and
weightings of performance variables) - Introduction of management dilemmas
- The amount and availability of loans and
mortgages - Frequency and Amount of fines (lost passwords,
late submissions, failure to get proper prior
approvals, etc.) - Introduce External Substitute products. If
everybody takes a low promotion strategy I can
introduce external substitutes which creates a
loss of demand for ALL companies.
23Marking Scheme
- Variety of methods to assign marks
- Team performance
- The Strategic Plan (See Assignment 1)
- Industry Analysis paper (See Assignment 2)
- Presentation of Company strategy performance
(last week of classes) - Team assignments (log book, periodic reports,
etc.) - Joint Peer evaluation and division of points