Supply-Side Modeling in a Total Enterprise Simulation Developments in Business Simulation and Experiential Learning, Volume 33, 2006 SUPPLY-SIDE MODELING IN A TOTAL ENTERPRISE SIMULATION David A. Jordan Geneva College dajordan@geneva.edu ABSTRACT SUPPLY-SIDE DECISIONS IN A TOTAL ENTERPISE SIMULATION This demonstration session will discuss the role of supply- side management and demonstrate its use in a total enterprise simulation. The goals of this session are to present constraint modeling as a valid supply-side modeling technique in a total enterprise simulation. The simulation utilized seeks to model these techniques to more accurately simulate supply-side decisions made by managers of a small manufacturing firm. It is hoped that this session will help attendees assess the benefits and challenges associated with using a comprehensive total enterprise simulation Figure 1 provides a view of the important decision flows in a total enterprise simulation with focus on the decisions made by supply-side managers. Decisions about supply begin with the desires of the consumer as interpreted by Marketing. Once there is a determined demand, supply- side decision-making moves to answering the resource questions that begin to formulate the Production Plan. Key ingredients to the plan are the people, equipment and raw materials needed to support production. Finance must deliver the cash to purchase the equipment, supply the raw materials and support the rest of the operating budget. Human Resources and R & D contribute toward improving productivity that in turn affects costs and quality of produced goods. Scheduling the provided resources and managing inventories are the focuses of the Operations function. INTRODUCTION This paper looks at supply-side modeling in a total enterprise simulation. First the paper examines the decisions made in a typical total enterprise simulation. Next the paper discusses supply-side modeling in general and sets forth another method of supply-side modeling then is generally used. Thirdly the paper reviews supply-side modeling in a specific total enterprise simulation. SUPPLY-SIDE MODELING In many business simulations, supply-side modeling Figure 1 Decision Flow in a Total Enterprise Simulation Capital Decisions Purchasing Finished Goods Inventory Marketing Scheduling/ Inventory Decisions Human Resources Compensation Development Recruiting Staffing Operators Equipment Raw Materials Productivity OPERATIONS R & D Engineering F I N A N C E C O N S U M E R S SUPPLY-SIDE D em an d C as h 345 mailto:dajordan@geneva.edu Developments in Business Simulation and Experiential Learning, Volume 33, 2006 RAW MATERIALS SUPPLIERS INVENTORY CAPACITY DELIVERY PRODUCTION combines cost and production function theory. These functions are analytic a number of variables. Factors affecting and varying. This suggests a different side modeling. Perhaps a process of into account the many constraints inher Goldratt provides a philosophical u approach as shown next. “The Theory of Constraints (TOC management and improvement origi Eliyahu M. Goldratt and introduced Goal”. It is based on the fact that, weakest link, in any complex system there is most often only one aspect o limiting its ability to achieve more o system to attain any significant improv must be identified and the whole syste with it in mind.” In supply-side modeling for prod constraints described above would inc machines and labor. Each of these con by a series of other constraints that pre Figure 2 provides a simple flowch constraints in this hierarchy of supply-s For example, production is dependen Figure 2 Example Production Constraints PRODUCTION MACHINES BREAKDOWNS PARTS MAINTENANCE SKILLS TRAINING MORALE PRODUCTIVITY PAY ATTENDANCE PRODUCTION RATES TECHNOLOGY LABOR s found in economic nd include a limited production are many approach to supply- modeling that takes ent in such a system. nderpinning for this ) is a philosophy of nally developed by in his book, “The like a chain with its at any point in time, f that system that is f its goal. For that ement, that constraint m must be managed uction, some of the lude cash, materials, straints is constrained cede the ones listed. art of some of the ide decision-making. t upon labor that in turn is influenced by their skills, attendance and productivity. Their productivity in turn is affected by their morale, which might be affected by their pay. In order to provide comprehensive supply-side modeling, each of these constraints must be modeled within the total enterprise simulation. SUPPLY-SIDE MODELING IN BUSSIM STRATEGY BusSim® Strategy is a total enterprise simulation that seeks to model both strategic and operational level decisions made in a small manufacturing firm. All four functional areas are modeled with equal complexity so as to provide a balanced assessment of each student’s contribution to the firm. It is the responsibility of the student teams to be sure that all resources and contingencies are part of their planning. This paper focuses on the supply-side decisions made by both the Human Resources and Operations functions. BusSim® Strategy utilizes a stochastic simulation model, recognizing that most business decision results can vary. Most other business simulations utilize a series of deterministic equations that do not account for uncertainty or randomness. 346 Developments in Business Simulation and Experiential Learning, Volume 33, 2006 Production --> L In this simulation, scheduling the available take place if the necessary the things that limit pro below. For example, if ra production for all areas operator is absent and production will be red production quantities w fabricated parts will not simulation requires raw m available before assembl The coordination betwe operations and human re simulation. If operator employed, than production Assembly line balanc made by the Operations sp produced and different s required for each, it is Figure 3 Some Factors Affecting Production in BusSim® Strategy abor Equipment Materials Random Events Operators by skill Production Rate Raw Materials Breakdowns Productivity Age Suppliers Replacement parts Morale Maintenance Ordering Operator Issues Development Cash Cash Psychological Compensation Parts Drug/Alcohol Fabricating Schedule Prod Rate production is determined by resources. Production can only resources are available. Some of duction are shown in Figure 3 w materials do not arrive on time, affected will shut down. If an not available for scheduling, uced. If breakdowns occur, ill be reduced and sometimes be available for assembly. This aterials and fabricated parts are y operations can be completed. en the supply-side functions, sources, is a critical part of this s with the right skills are not suffers. ing is another important decision ecialist. Since three products are kill levels and raw materials are important to schedule the right number of each at a time when it can be used. Cycle time is one of the important measures of operations success. Figure 4 displays an example operations report from the simulation. There are four sections to this report, each displaying an important area of operations responsibilities. Of particular interest are the shop summary and inventory summary. It is in these summaries that the bottlenecks from constraining resources can be found. For example, this report shows no ending inventory for tubing. This is the cause of less than 100% utilization in Framing. In this paper I have tried to show the usefulness of using a constraints modeling approach to supply-side calculations. The benefits in a total enterprise simulation are a holistic view of manufacturing that incorporates randomness and uncertainty into the student experience. REFERENCE Goldratt, Eliyahu M., “The Theory of Constraints”, Cronton-on-Hudson, N.Y.: North River Press, 1990. Figure 4 Sample Operations Report from BusSim® Strategy 347 Table of Contents Volume 33, 2006 Learning Assurance Using Business Simulations Applications To Executive Management Education Team Teaching In An Integrated Business Course Using Critical Problem Based Learning Factors In An Integrated Undergraduate Business Curriculum: A Business Course Success Personality Type And Strategic Planning Business Games As Strategic Management Laboratories The Relationship Between Students' Success On A Simulation Exercise And Their Perception Of Its Effectiveness As A PBL Problem Forecasting Accuracy And Learning: The Key To Measuring Simulation Performance The Business Strategy Game: A Performance Review Of The New Online Edition Using The Socratic Method And Bloom's Taxonomy Of The Cognitive Domain To Enhance Online Discussion, Critical Thinking, And Student Learning Using Negotiation Exercises To Promote Critical Thinking Skills Effective Leadership Experiences For Management Majors In A Futures Class The Role Of Learning Versus Performance Orientations When Reacting To Negative Outcomes In Simulation Games Is Pay Inversion Ethical? A Three-Part Exercise Simulations And Experiential Exercises - Do They Result In Learning? Have We Figured It Out Yet? Examining Program Management In Business Simulations: Student And Faculty Views Validating Business Simulations: Do Simulations Exhibit Natural Market Structures? Characterizing Business Games Used In Distance Education Utilizing Games In A Graduate Level Instructional Game Course Employment Interview Preparation: Assessing The Writing-To-Learn Approach Simulations - Bridging From Thwarted Innovation To Disruptive Technology Creating An Authentic Cultural Lens Using Case Dialogue Learning By Fire: Reflections Of A First Time Online Instructor An International Internship With A Service-Learning Focus Learner Participation In The Online Learning Experience: Help Or Hindrance? Any Given Sunday: Intervention In Pursuit Of Simulation Team Parity Beginning With The End: Creating An Experiential Exercise From Assessment Criteria Simulating Life Cycles: Life Span As The Measure Of Performance In Business Gaming Simulations It's Puzzling: Communications, Competition, And Cooperation Balanced Scorecard Implementation For Strategy Management: Variation Of Manager Opinion In Real And Simulated Companies Cases And Business Games: The Perfect Match! Three-Attribute Interrelationships For Industry-Level Demand Equations Using A Web-Based Module To Teach Information Literacy Decision Support System For Demand Forecasting In Business Games The Invalidity Of Profit=F(Market Share) PIMS Validation Of Marketing Games Online Market Test Laboratory With The MINSIM* Program The Gas Mileage Game - A Policy Simulation Delivered Cost And Differentiation Applied To Threshold 3rd Ed. The Effect Of Team-Leadership Modes On Team Performance: A Preliminary Study The Design And Use Of A Macroeconomics Simulation Using Maple Software: A Pilot Study The Instructor's Toolbox: A Meaning-Centered Framework For The Social Construction Of Experiential Learning Incorporating Strategic Product-Mix Decisions Into Simulation Games: Modeling The 'Profitable-Product Death Spiral' Group Composition And Groupthink In A Business Game A Direct Approach To Teaching Business Ethics A Decision Support System For Planning Sales, Production, And Plant Addition With Manager: A Computer Simulation Polish - American Entrepreneurial Business Cooperation Workshop Utilizing The Income/Outcome Simulation Student Leader Training Exercise Student Preference To Mode Of Learning In Hong Kong Experiential Learning For Technology-Based And Management Programme In Hong Kong: A China Study Tour A Price Game With Product Differentiation In The Classroom Discrete Event Modeling In A New Transportation Simulation Supply-Side Modeling In A Total Enterprise Simulation The Quality Game Towards A Massive Multiplayer Online Business Simulation Making The Connection: Improving Virtual Team Performance Through Behavioral Assessment Profiling And Behavioral Cues Individual Learning Producing A Learning Organization: 'Playing Dice With Polar Bears' Narratology and Ludology: Competing Paradigms or Complementary Theories in Simulation Framework For Evaluating Internet Research Using Children's Games To Illustrate Strategy Concepts: Is Less Better?