Production Game (Organizational Behavior)

THE PRODUCTION GAME

University of Edinburgh Business School MBA
6 October 2011

Location: Conference Room, 4^th Floor, Business School

Before the Game

For the Production Game the MBA class will be divided into Groups of 7-8 people, each of which constitutes a company. Before the Game it is very important that you meet in your groups and plan how you will tackle the Game. Once you get into the Game itself you will be very busy and planning will be extremely difficult.

You will be given your starter pack of materials in the first OB session of the morning on 6 October..

Schedule for 6 October 2011

11:15 Conference Room and Roof Terrace open to begin setting up. Preparation in Groups for the Game, formulation of strategy and approach, discussion of this with controllers.

13.45 Final Briefing before trading begins

14.00 Trading commences

16.15 Trading ceases; all materials to be handed in to the controllers. Teams reflect on the Game - each team to prepares its report-back to the class

17.45 Controllers provide performance data and final results

18.00 Each company gives a short summary on its observations on the Game, with reference to issues of performance and organization. Initial discussion of issues arising

18.30 (approx) Close – those who wish can continue the debrief in the pub!

13 October 2011 – 0900-1045

Presentations (5-10 minutes duration per team) comprising complete analysis of each Group’s performance. This should cover the main issues contained in the brief for your assignment – see page 4 of this document.

THE PRODUCTION GAME

Introduction

The Production Game is a simulation of a manufacturing operation. Small companies (teams) are required to manufacture simple paper- based products based on orders from a market place. Products which meet the required standards of quality and delivery are purchased by the market. Unacceptable products are rejected.

At the start of the game each team is provided with a starter pack of equipment and materials. You may purchase more capital equipment and raw materials as the game goes on. The game is cashless; the controllers maintain a record of debits and credits to your company's account. However, each company is strongly advised to keep its own records to resolve differences between the controllers and the team about payments and receipts. In the case of discrepancies, the controllers' judgement is final. Equipment and materials available for purchase include:

1. 12" rulers £300
2. 5mm stencils £400
3. 10mm stencils £500
4. Pens £300
5. Pencils £100
6. Rubbers £300

7. Paper - white (per sheet) £10
8. Paper - coloured (per sheet) £20
9. Envelopes (each) £10

Extra materials or equipment must be ordered using the special procurement forms provided (a specimen form is included in this document). There is a 10 minute lead time on all purchases. At the end of the game capital equipment and unused consumables will be valued at 30% of their original purchase price, as long as it is still in pristine, usable condition..

If you wish, you can purchase a benchmarking report, showing the performance of companies from previous games, for £500.

Products and Company Operations

Each team produces greeting cards in a range of colours and sizes, with the occasion stencilled on the front of the card and an appropriate verse written on the inside. The market will buy at a declared price any order which is complete, manufactured to specification and delivered at or before the required time. Some cards (for example Christmas) may be ordered to a delivery date, that is a time in the game when they must be ready. Other cards, such as birthdays, may be open delivery and can be delivered at any time up to the end of play. There will be special orders, which embody some unusual requirement of size, shape or occasion and will carry a premium price.

Sizes are A5, A6 and A7. Paper is supplied as standard commercial A4 sheets. To make an A5 card fold an A4 sheet in half along the short dimension. The short dimension of the A4 is now the long dimension of the A5 - an A5 is hence half an A4. An A6 is made is made by folding an A5 sheet in half and an A7 by folding an A6 in half. The cards are formed by folding only. No cutting is required.

The format of a finished card is shown in figure 1. Seen from the front the fold runs down the long left hand side, with the occasion stencilled across the middle. The specification states that this should be centred in both the top-down and left-right dimensions. On the back the manufacturing team's identity and the sales order number is to be written on the bottom right-hand corner next to the fold. Inside the card the verse must rhyme, be neatly set out, legible and not enter the margins given in the specifications. Verse must be written on the right-hand inside page.

The Market

The marketplace is represented by an 'order board'. Orders are placed on the board by the controllers. Each order specifies the number and type of products required, the time by which they are required and the price that will be paid. As described above, some orders will specify 'open' delivery and will be accepted at any point of the game's duration. A team accepting a particular order undertakes to meet particular delivery and quality requirements with the game's controllers. For an order to be valid it must have a delivery deadline specified, and be signed by one of the controllers, to whom the finished product must be delivered. Orders which are taken on but not completed by the deadline are rejected, and due to a penalty clause render the company liable for 20% of the value of the order. Orders vary in terms of their size, complexity, delivery deadlines and of course price. Generally, the more demanding the order is, the more money it earns for the company completing it successfully. Sample orders from previous games are shown in figure 2. These accurately represent the nature of the market, and may be used to assess the relative attractiveness of orders.

Orders are placed using a standard 'SALES ORDER AND DELIVERY NOTICE', a specimen of which is attached.

Delivery

All the cards in a given order must be delivered together packed in an envelope with the original SALES ORDER AND DELIVERY NOTICE (SODN). Each order must be delivered in a separate envelope, marked on the outside with the identity of the manufacturer, which must also be written on the SODN. Neither part deliveries nor envelopes containing more than one sales order will be accepted, and no company will be paid for unidentified consignments.

If anything in the order is not up to specification, the whole order will be returned to its makers together with an indication of why the order has been rejected. That order is then lost, although salvageable materials may be re-used in later orders as long as they meet the specification.

Organization and Strategy

The teams may choose any form of organization they consider appropriate. Good organization is crucial to commercial success in the game, and careful thought on this will pay dividends. The process consists of 10 identifiable activities:

• selecting orders
• reducing sheets to size/folding sheets
• verse composition
• copying verses
• copying occasion (front cover)
• copying manufacturer's identity and order number (back cover)
• packing
• completing sales order and delivery notice
• labelling envelope
• delivery

There are five administrative functions:

· identifying and selecting orders (sales/marketing)

· estimating and ordering raw materials (stock control)

· process and organization of manufacturing (production control)

· cost and revenue calculations (accounting)

· record keeping as required

You need to think hard about an appropriate division of labour. Are you going to go for a functional or a product-based layout? What co-ordinating (integrating) mechanisms are you going to use? What is your strategy? What does ‘strategy’ mean in the context of the Game? What does your strategy imply for the structure you adopt? How are you going to make choices and decisions? And so on.

Trading runs for two and a quarter hours. At the end of this time the performance of each company (in terms of turnover, profit and loss, delivery and quality) will be calculated and compared. Each company will be required to make a short presentation on their performance during the game.

Report -Back

In preparing your presentation please reflect on the following areas:

1. Overview: Short summary of overall performance of your company and your reflections on the game.
2. Strategy: The strategy your company pursued (if any).
3. Strategy Formulation: The manner in which that strategy was formulated.
4. Strategy Execution: How the strategy was reflected in your decisions about the organization and control of the manufacturing process.
5. Control: The methods used to control costs, quality, time etc
6. System Management: How the whole system was managed – e.g. the coordination between 'Marketing and Sales' and 'Manufacturing', and between 'Manufacturing' and 'Purchasing'
7. Information Systems: Formal and informal information systems that were designed or evolved during the game; the appropriateness of these
8. Successes / Failures: The things that you feel you did right, and the major errors you made; how you would do it differently next time.
9. “Benchmarking”: Comparisons between the processes of your company and those of others. The impact of these on performance.

Good reports will not merely provide a summary of “what we did” but also provide some reflection on and analysis of these results.

Figure 1 Format of an A7 Easter card

EASTER

Co. A/S01

Outside back Outside front

Fold

Easter eggs me on to rhyme

All my greetings at this time

Figure 2 TYPICAL MARKET CONDITIONS

The data given below are drawn from a recent market research report on the market in which you will be operating. The report was produced by a reputable company, and it is safe to assume that it fairly represents the conditions under which you will be operating.

LEAD LINES OF
QUANTITY COLOUR SIZE TIME VERSE OCCASION PRICE
4 White A5 15mins 6 Christmas £106

12 Green A6 25mins 4 New Year £504

8 Pink A5 Open 6 Wife’s birthday £232

4 White A6 25mins 4 Father’s birthday £84

12 Salmon A5 20mins 6 Get Well Soon £768

8 Yellow A6 30mins 4 Baby Girl £280

6 Blue A5 15mins 6 Baby Triplets £212

12 White A6 15mins 4 Good Luck £516

8 Green A5 25mins 6 St David’s Day £320

4 Pink A6 Open 4 Mother’s Day £124

12 White A5 25mins 6 Examination Pass £252

8 Salmon A6 20mins 4 Marriage £440

12 Green A7 25mins 2 Pregnancy £504

4 Yellow A5 30mins 6 New Job £144

12 Blue A6 15mins 4 18 Birthday £1032

8 White A5 15mins 6 Driving Test Pass £280

4 Green A6 25mins 4 New Home £168

8 Yellow A7 30mins 2 Passover £280

12 Pink A5 Open 6 Easter £324

8 White A6 25mins 4 Silver Wedding £160

APPENDIX

Contains specimens of:

• Sales Order and Deliver Notices
• Specifications
• Starter pack contents
• Procurement Forms
• Final Accounts Forms

SALES ORDER AND DELIVERY NOTICE (to be retained by controllers after delivery)

Sales order number:

Company

Occasion	Quantity	Colour	Size	Number of lines of verse	Leadtime	Price

Time order granted			Accept			Comments
Time due			Reject
Controller signature	...............	......	...............

SPECIFICATIONS

1. Text inside and on the rear of the card to be neatly written.

2. All lines of text to be perfectly horizontal.

3. Title to be centred, both horizontally and vertically and stencilled on front cover. A5 cards must use 10mm stencils; A6 can use 5mm or 10 mm; A7 must use 5 mm stencils.

4. Verse text must not exceed the following margins:

Card Left Right Top Bottom
A5 30mm 30mm 40mm 40mm
A6 20mm 20mm 30mm 30mm
A7 10mm 10mm 20mm 20mm

5. Verses must rhyme.

6. Text to be written using pens provided with no smudges.

7. All cards in a batch to have the same verse.

8. No pencil marks to be visible .

9. Closed folds: - to be at the top of A6 and A7 cards

- to be on the frontispiece of A7 cards.

10. Manufacturers identity and sales order number to be written on the back of every card in the bottom right-hand corner next to the fold.

11. Products to be delivered in an A4 envelope, marked with the company's ID and the sales order number on the white label.

12. Neither part-deliveries nor envelopes containing more than one sales order will be accepted.

13. Missed deadlines or non-delivery mean the loss of that order plus a penalty charge of 20% of the value of the order.

14. No equipment to be used other than that bought from the game's controllers.

IF IN DOUBT - CONSULT THE CONTROLLERS

THE STARTER PACK

All companies are issued with the same starter pack containing:

1 Ruler £ 300
1 5 mm stencil £ 400
1 10 mm stencil £ 500
1 Pen £ 300
1 Pencil £ 100
1 Rubber £ 300
10 Envelopes @ £10 £ 100
10 sheets of white @ £10 £ 100
10 sheets of salmon @ £20 £ 200
10 sheets of pink @ £20 £ 200
10 sheets of blue @ £20 £ 200
10 sheets of green @£20 £ 200
10 sheets of yellow @ £20 £ 200

TOTAL VALUE: £3100

Each pack also contains the following material which is offered free of charge:

- 3 SPECIFICATIONS lists

- 20 PROCUREMENT forms

- A FINAL ACCOUNTS form

Extras of these are available free-of-charge during the game.

PROCUREMENT FORM

Use to order equipment and consumables: To be retained by controllers on final delivery of the order.

ALL ORDERS HAVE A LEAD TIME OF 10 MINUTES AND A MAXIMUM VALUE OF £1000.

Company: .............................

Capital Equipment

Number Price Total

12" rulers ...... £300 ......
5 mm stencils ...... £400 ......
10 mm stencils ...... £500 ......
Pens ...... £300 ......
Pencils ...... £100 ......
Rubbers ...... £300 ......

Consumables

Paper - white (per sheet) ...... £10 ......
Paper - coloured (p/sheet)
Sheets of salmon ...... £20 ......
Sheets of pink ...... £20 ......
Sheets of blue ...... £20 ......
Sheets of green ...... £20 ......
Sheets of yellow ...... £20 ......


Envelopes (each) ...... £10 ......

Benchmarking Report ...... £500 ......

TOTAL PAYABLE: ......

Time order placed:
Earliest collection time:

FINAL ACCOUNTS

Company Name: ..........................

INCOMINGS/ASSETS

Total value of sales £ ........

Assets at end of game:

Ruler ..... @ £ 300 £.........
5 mm stencil ..... @ £ 400 £.........
10mm stencil ..... @ £ 500 £.........
Pen ..... @ £ 300 £.........
Pencil ..... @ £ 100 £.........
Rubber ..... @ £ 300 £.........
Envelopes ..... @ £ 10 £.........
Sheets of white ..... @ £ 10 £.........
Sheets of salmon ..... @ £ 20 £.........
Sheets of pink ..... @ £ 20 £.........
Sheets of blue ..... @ £ 20 £.........
Sheets of green ..... @ £ 20 £.........
Sheets of yellow ..... @ £ 20 £.........

Benchmarking report ..... @ £ 500 £.........

Total Assets £.........

Assets at end of game (30% of total) £.........


TOTAL INCOMINGS/ASSETS £ ........



OUTGOINGS/LIABILITIES

Starter pack £ 3100

Materials purchased £........

Fines and penalties £........


TOTAL OUTGOINGS/LIABILITIES £........


PROFIT/LOSS £........

Number of rejected orders: .........