Bus100 Jul20 Lecture 1 Slides PDF

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Bus100 Seminar 1

BUS100: Business Skills and Management (F2F 1) Unit 1, Unit 2

Faculty: < tutor name > Email: < tutor email address >

Today’s Agenda

 Administrative Details  Introduction and Overview  SU1 – Introduction to Business Studies and Business Excellence  SU2 – Leadership and Planning

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Administrative Details

Administrative Details •

5 CU course, 3 face-to-face sessions

• No exams for this course Assessment Assignment 1

Assignment 2

Description

6%

Pre-class Quiz 2

7%

Pre-class Quiz 3

7%

Class

Participation

participation Assessment 3 Assessment 4

Weight Allocation

Pre-class Quiz 1

and

(in-

class

20%

simulation

game) Class Test

30%

Tutor Marked Assignment

30%

(Individual assignment) TOTAL

100%

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SU1

5

Chapter 1: Business Excellence Framework

•

Business Excellence (BE) Framework is a holistic approach to assess the performance of an organisation. • Started in 1994 to help small and medium enterprise in Singapore to build up their capability and verify their performance against the market players from around the globe • It covers seven areas: Leadership, Customers, Strategy, People, Processes, Results and Knowledge. • Some of the benefits of using BE framework for the organisation are: – Systematic approach to identify strengths – Discover ways to improve the internal processes – Learn from the best practices through networking, sharing, learning

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Chapter 2: Overview of Business Functions •

We will be using Monsoon Simulation to learn about real-business world through their unique, experiential learning platform. • There are twelves departmental functions in the Monsoon game. B2B or wholesale

Customer Service

Finance & Accounting

Human Resource

Logistics and Warehouse

Maintenance

Marketing

MRP

Forecasting and Planning

Procurement

Production

Retail

Sign up in MonsoonSIM

• Log on to: http://www.monsoonsim.com/ • For first timer, click on Member login (at the right hand corner). • After you click on Member Login, use SUSS email to sign up and remember your 4 digit password. • Follow the steps until you are successfully sign up and wait for instruction.

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Play the game

• Log on to: http://www.monsoonsim.com/ • Join the Live game using the Game Quote, which will be given by your instructor.

• Join a team that you are assigned to

Join the teams

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After successful log in to the game

 There are twelve department, you should learn more about each department from study guide.  Imagine you are running this virtual company. Your company is selling Apple, Orange and Melon juice.  You need to Procure from suppliers before selling them at retail.  You can also buy raw material and produce your own finished goods.

B2B or Wholesales

• Trade in volume/s with a marginal profit • Due to the large amount of transactions involved, the company revenue can go up by multiple folds. • An organization needs to submit the tenders with the bids. • If the organization wins the bids, it will need to fulfill the bids which include the delivery date and the volume. • The organization needs to monitor the market demands, plan and schedule for the product replenishment and or production. • If an exchange rate is involved, pricing will be affected based on the currency fluctuations and it may affect B2B strategy for the long run.

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Customer Service

• It handles complaints from customers about the products or services that they purchase from the organization. • The complaints can come from clients, vendors, or coworkers. • It is the main customer relationship channel. • It should focus on providing good quality service to the customers at the service center. • In Monsoon Simulation game, customer service departments can outsource their services to the client at a very high profit margin. • The organization can bring in revenue through this department.

Finance & Accounting • Finance is a core function in any organization and it describes how money is managed, and the actual process of acquiring the funds. • Accounting deals with how transactions are recorded in accounting ledgers. • There are two types of Accounting: cash and accrual. • Cash accounting mean that all the payments are made when the transaction is done; however, in Accrual Accounting, payment to vendors will be based on vendorspecific Terms of Payment. • Cash flow is used to assess the quality of a company's income, that is, having a strong cash flow puts the company in a more stable position with strong buying power.

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Human Resource Management (HRM) • • • •

It is a set of practices related to people management in an organization. Management needs to plan for employee headcount based on some forecasted demand. In the simulation game, Five personality traits (O.C.E.A.N) will be recorded for each employee. Five personality traits are: – Openness – Conscientiousness – Extraversion – Agreeableness – Neuroticism

Logistics and Warehouse • Inventory is stock that is available at the warehouse and can be used to replenish a retail store if its stock level is running low. • Automatic replenishment by using minimum stock will reduce the daily monitoring of stock in the retail store. • We can also use warehouses to store raw materials, and only ship to the factory/ies for production when the materials are needed. • For logistics, we refer to the activity of organizing movement/transporting of goods or raw materials. • Future Delivery is an arrangement that allows a company to book and pay for goods, sometimes, in the future. • The delivery cost will include both fixed and variable costs, and it will be booked as expenses.

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Maintenance • Machines will degrade proportionally to usage. • Maintenance involves the work of checking the machines and keeping them in good conditions. • A maintenance work is called a Work Order. • Each work order will incur a fixed fee. • There are two types of maintenance: preventive maintenance occurs periodically, and predictive maintenance refers to as conditional maintenance based on the data analytics on the machine performance. • Production capacity changes when a machine is having maintenance and its capacity is reduced.

Marketing • It includes advertising, up-selling, cross-selling, and delivering products to people. • To make a marketing investment, a purchase request need to be raised. • There are various marketing media, and each media will yield different Return of Investment (ROI) for different products. • ROI = (Sale Growth – Marketing cost)/ (Marketing cost) • We can also buy market intelligence: – to understand the competitive market and gain insights from competitors, – to determine market opportunities and – propose market penetration strategies for growth.

and/or

expansion

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Others • Material Requirements Planning (MRP) is a production planning, scheduling and inventory control system used to manage the manufacturing processes. • Procurement - A Blanket Purchase Order (BPO) is the preferred method for placing orders which require multiple payments over a period of time. • Production refers to the processes and methods used to transfer tangible inputs (raw materials, semi-finished goods) and intangible inputs (ideas, information, knowledge) into finished products or services. • Retail - A retail sale occurs when a business sells a product or service to an individual consumer.

Finance

You can look at the financial status of the company during simulation.

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Procurement

•

You can purchase (Finished Goods or Raw Materials), Leadtime is 1 day

• • •

Two vendors to buy from and deliver to retail stores and warehouse various quantity you want There is discount if you buy in volume and you can also opt for future delivery or blanket purchase. PO List – Someone needs to approve the PO before it is executed. It will be in the mail box (The last icon).

Retail



You can look at graphs by prices, sales by product, unit sold and unit remain.



You can also adjust the space of each retail store.

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Marketing



You can set daily marketing expenses.



There are three program A, B, C and some media are more effective than others for different locations.



You need to analyse and observe which media works best.



You can buy marketing report to understand competitors and market situation and view marketing report.

Forecast

 You can view the Forecasted retail demand and wholesales demand.  It is the demand for the whole market.  If there are peaks in demand due to holiday season, you can prepare your retail store to meet the surge in demand.  As a player, you can’t change the Forecast.

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Warehouse/Logistic



 

You can move stock between retail and warehouse. You can also schedule auto replenishment for various retail stores. You can also look at stock remaining at the warehouses.

B2B

 Show B2B offers will display a list of wholesales offer. There is Deal or Bid.  For bid, you need to monitor if you win the bid. Take note of Day needed and quantity required and WTP price, late penalty and terms.  Tendering is the process of choosing the best or cheapest company to supply goods or do a job by inviting several companies to make offers. Tender document include many details including Tender Open Date, Minimum Participants, WTP (Willing To Pay), which is the maximum amount of price the company is willing to pay. The document also has a tender open date which is the day for winner announcement.  The Sales Order is a confirmation of an agreed sales of product or services. Typically, a Sales Order (SO) is created once an agreement has been reached through a Purchase Order received from our buyer (customer).  For deal, you get it instantly and you need to fulfil the deal, otherwise there is a late penalty.

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Production

 You need to buy machines for production.  You also need raw materials based on BOT. 1 unit of Box, 2 unit of Straw for 1 unit of Apple (Similar configuration for orange and melon).  There is production order and daily production capacity.

MRP



By running MRP, the system will help to take care of production.



You can set preferred vendor, product vs procure or set safety stock.

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Maintenance

 If you have machine, you need to do maintenance.  You can set predictive or periodic.

HR

 In HR module, you can hire new staff and give consultation to those who have issue.

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Service

 Look at incoming service request and plan for a quote.  Margin is high for service. It is one of the main revenue stream for the company.

Simulation game

• After running the simulation game, reflect on what you have learnt. • What are the key performance indictors or report you can refer to? • What is your strategy to run the company? • As we will be running a few simulation games during the course and a final presentation at the end, you need to find way to improve your company finances, inventory, and others. • What will be your focus for the future run?

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Chapter 3: Spreadsheet Modelling • Enter data only once, use reference • No hardcoding of formula • Ctrl + ~ to toggle between formula and value • Relative reference E3, Absolute reference $E$3 (Fixed Column E and Row 3), Mixed reference $E3 (Fixed column), E$3 (Fixed Row 3) • EX: 2x2 multiplication table using only ONE formula

After we have entered the formula in B2, we can drag to the right to fill up the column. We can also drag down to fill up the row.

Basic Spreadsheet functions • Workbook (Save, Save as, new) • Worksheets (Add, rename, delete) • Cell (Row and Column) • • • •

Use proper name for worksheet Use proper label and title for data for better readability Do not hardcode any number in formula Documentation is important so that other people can understand the model • Professional looking worksheets • Different colour coding scheme for input and output

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SU2

Chapter 1: Leadership

• • • •

•

Leadership is a process and ability to influence people in the organization towards achieving the company’s goal. Leaders create an environment of acceptance for all things new and unusual and allow people to venture beyond their comfort zones. Trait theories help us to identify characteristics or “traits” that are commonly found in successful leaders. Behavioural theory based on the concept of how leaders might behave in situations which might contribute to the success or failure of their leadership. Contingency theory refers to the situational model which focuses on the characteristics of the followers to determine the appropriate leadership behavior.

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Chapter 2 Strategic Planning • It is to make long-term plans or view for the organization to see the big picture beyond the current state. • We need to understand the core competencies within the company, which can be in the area of innovative products, strong R&D or excellent customer services. • Strategy formulation comprises of the thinking and planning processes where the organization’s goals are established and short-term and long-term strategies for the company are developed. • Strategy execution is how to implement the strategy to achieve the desired outcomes and bring value to the customers. • A key important strategy for implementation is alignment.

Case: Alex Processing

input

output

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Modeling and Problem Solving in Business • Refer to the Excel template given above for Alex Processing case • Problem: Equipment acquisition plan for next 10 years given past 10 years demand and equipments holding • Other input: lead time, unit cost • Output: Next 10 years equipment requirement to support the new predicted demand • Assumption: Productivity will continue to grow and forecasted demand is accurate, there are different order lead-time for different machines type • We can’t drag the past 10 years machines and fill the rest of the table, because there is no relationship with demand

Modeling steps

i.

Find the productivity for each machine How much demand does each machine support?  Productivity = Aggregated demand/# of machine ii. Use TREND functions in Excel to find new productivity given new predicted demand, y = m x + c, where m is the slope and c is the y-intercept when x=0. iii. Find the new number of machine after we find new productivity in (ii)  New # of machine = New predicted demand/New productivity

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Excel functions

• Fill function • Trend: returns the numbers in a linear trend matching known data points – Trend(known_y, [known_x], [new_x], [const]) • Forecast: calculates or predict the future values along the linear line using existing value – Forecast(x, known_y, known_x) • We can either use Trend or Forecast as they assume there is linear relationship between x and y.

Developing model Select data (Aggregate demand and productivity) Insert  Scatter (Right click on the line, Add Trendline) Productivity of Grader machine 3.0000

=$L9/D9

y = 0.0651x + 0.9743 R² = 0.9258

2.5000

Productivity

2.0000

1.5000

1.0000

0.5000

0.0000 0.00

5.00

10.00

15.00

20.00

25.00

30.00

Aggregate Demand (ton)

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Model explanation • Find productivity for the grinder machine, = $L9/D9 (We fix column L as we are going to fill to the right for other machine and the demand is at column L. • Find new productivity =TREND(M$9:M$18,$L$9:$L$18,L19) – We are fixing row 9 to row 18 for past productivity in column M as they are past 10 years productivity. – Similarly we want to fix the demand in column which is an absolute reference ($L$9:$L$18), because we don’t want the column and row to change as we fill the formula down and to the right. – For the last component, $L19 new demand, we want to fix column L ($L) but we want the row to move for year 2008 to year 2016.

Final step for model

=$L9/D9

=TREND(M$9:M$18,$L$9:$L$18,L19)

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Model explanation • Finally, we find new machine using formula, = $C19/M19 • We want to fix the column C, ($C) as the demand is in column C, where M19 is the new productivity. • After we have done it for one machine type (Grinder Machine), we can repeat the same step for all the other machine. • If you have fixed the row, column and formula correctly, it will just be filling the row and column for the remaining table. • We need to learn how to use absolute reference, mixed and relative reference so that we do not have to write the same formula multiple time. • Check and make sure that your formula is correct using Ctrl + ~.

References

• Leong, T. Y. and Cheong, M. L. F. (2015). Business Modeling with Spreadsheets: Problems, Principles and Practice, 3rd edition, McGraw-Hill. ISBN 978-981-4595-15-5. • Enterprise Singapore, Business Excellence Framework https://www.enterprisesg.gov.sg/quality-standards/businessexcellence

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Thank You.

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