Explore how materials, money and information flow through a business and tie together the purchasing, manufacturing, sales and finance functions.
UMIX is designed for management trainees and junior management to show them the dynamics of information, material and cash flows. An unusual feature of the simulation is that participants are, individually, responsible for functional areas - making their own decisions and receiving their own reports. This means that participants have to integrate their knowledge and, as appropriate, share information. While they do this they must maintain the day-to-day performance of their own function.
THE PRODUCT are small ultrasonic cement or concrete mixers sold to the DIY enthusiast.
DECISIONS: UMIX's decisions cover:
- raw material and component purchases
- prices and delivery lead times
- production scheduling and shift working
- customer payments and prompt payment discount
DURATION: One and a half days
TARGET AUDIENCE: The simulation is for junior managers, management trainees, trainee accountants and business systems designers.
AVAILABILITY: Because of its scope, UMIX is only available on a fully tutored basis or after training on a self tutored basis..
PROCESS: Learners are divided into teams of four each of whom is allocated a functional role. Each simulated month the learners submit the decisions for their functional area that are entered by the trainer into the simulator. The trainer simulates the month and functional reports are produced and returned to the appropriate learner.
WAYS OF USING: UMIX can be used in these ways
The simulation covers:
The business simulated is a typical manufacturing company with four main functions: Production, Purchasing, Sales and Finance. It manufactures a range of small cement mixers designed for the Do It Yourself and small building company. The range of three types of cement mixer are sold through retail outlets. It has two manufacturing stages - fabrication and assembly. Each type of cement mixer requires a different set of materials and components that must be purchased. The company is a small one without any financial or market leverage.
The decisions made by the participants concentrate on the short term, tactical management of the UMIX company rather than the external, long term strategy. So, each decision period represents one month's trading. The Production Manager's decisions cover shift working, fabrication and assembly targets and priorities and output forecasts. The Purchasing Manager's decisions cover materials and component purchase amounts and schedules. The Sales Manager's decisions cover pricing, advanced warning of price increases and the delivery lead times. The Finance Manager's decisions cover scheduling payment to suppliers and prompt payment discounts.
Each manager is responsible for operating their own function and receives their own set of reports showing how they operated. The Production Manager's reports cover actual output, labour and overhead costs, standard hours used and efficiencies. The Purchasing Manager's reports cover receipts and open orders for materials and components and inventories for materials, components, fabrications and finished product. The Sales Manager's reports cover units shipped, orders received and future load. The Finance Manger's reports cover payments and cash receipts, costs, changes in the bank account, receivables and payables. All functions are informed of profits or loss.
Each manager in operating his or her function must consider interactions with the other functions. As the individual functional managers are separated, this exploration is not straight forward and requires thought and good time management. The decisions (describe above) were especially chosen so as to emphasise inter-functional interactions.
Each function impacts profit and cash flow in different ways and only receive limited information about the total picture.
To operate each functional manage must decide what information to provide to the other functions and what information he or she needs.
Optionally, so as to emphasise inter-functional rivalry, the tutor may set up a reward scheme based on individual functional performance. However, the profit and loss statement and information flows can be used to emphasise team working and optimising corporate rather than functional success.
As Umix is usually only available on fully tutored basis, the software is not downloadable however you can download the participants documentation, decision forms and briefing slides.
Most recent update: 03/11/12
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