EEE459 ASU Week 1 Role of The Research and Development Department Paper Team Member Guide Worksheet Assignment Read and study the Capsim Team Member Guide

EEE459 ASU Week 1 Role of The Research and Development Department Paper Team Member Guide Worksheet Assignment

Read and study the Capsim Team Member Guide.

Click on “PDF Guide.”

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The Course Road Map
Registration
Getting
Started
Practice Rounds
Go to capsim.com/register,
follow the onscreen
instructions and register
into your Industry.* Create
your User ID and Password.
Login with your User ID and
Password at capsim.com.
Click on Capstone. Go to
Getting Started and follow
the steps that include:
Most instructors include
team Practice rounds. When
the Practice is over, the
simulation will restart from
the beginning, using the
unique model selected by
your instructor.
*Your instructor may have
given you an Industry ID
Number. If not, you can
locate your industry by using
your school name/campus
and either the course section
number, start date or your
instructor’s initials.
» Reviewing the
Rehearsal Tutorial
» Opening the Capstone
Spreadsheet
» Forming your company
(if applicable)
Competition
Rounds
When the Competition
begins, your decisions
count! Additional tasks
could include:
» Optional Homework
Assignments
» Peer Evaluations
See your Dashboard for
complete information.
(if applicable)
Your instructor might
include a Comp-XM exam.
Go to the Course Page and
choose Comp-XM. Follow
the instructions on the
Dashboard which include:
» Decision making
using the Comp-XM
Spreadsheet
» Board Queries (quizzes)
Table of Contents
1
1.1
1.2
1.3
1.4
1.5
1.6
2
2.1
2.2
3
3.1
3.2
3.3
4
introduction …………………………………………………….. 1
The Industry Conditions Report …………………………….1
Management Tools ……………………………………………….1
Company Departments ……………………………………….. 2
Inter-Department Coordination …………………………… 3
Practice and Competition Rounds ………………………… 3
Company Success ………………………………………………… 3
industry conditions …………………………………… 3
Buying Criteria …………………………………………………….. 3
Buying Criteria by Segment …………………………………. 5
the customer survey score ……………………….. 5
Buying Criteria and the Customer Survey Score …………. 6
Estimating the Customer Survey Score …………………. 8
Stock Outs and Seller’s Market ……………………………..9
4.1
4.2
4.3
4.4
managing your company …………………………… 9
Research & Development (R&D) …………………………..10
Marketing ………………………………………………………….. 11
Production ………………………………………………………….13
Finance ……………………………………………………………….15
5
the capstone courier ……………………………….. 17
5.1
5.2
5.3
5.4
5.5
5.6
5.7
Front Page …………………………………………………………. 17
Stock & Bond Summaries …………………………………… 17
Financial Summary …………………………………………….. 17
Production Analysis …………………………………………….17
Segment Analysis Reports …………………………………..18
Market Share Report …………………………………………..19
Perceptual Map …………………………………………………. 19
5.8
Other Reports ……………………………………………………..19
6
proformas and annual reports…………………. 19
Balance Sheet …………………………………………………….. 19
Cash Flow Statement …………………………………………. 20
Income Statement ……………………………………………… 20
6.1
6.2
6.3
7
7.1
7.2
additional modules ………………………………….. 20
TQM/Sustainability …………………………………………….. 20
HR (Human Resources) ………………………………………. 20
8
plug-ins ……………………………………………………. 21
8.1
Making Decisions ………………………………………………. 21
9
situation analysis …………………………………….. 21
10
10.4
forecasting ……………………………………………… 22
Basic Forecasting Method …………………………………. 22
Qualitative Assessment ……………………………………… 22
Forecasts, Proformas and the December 31
Cash Position ……………………………………………………… 23
Worst Case/Best Case ……………………………………….. 23
11
balanced scorecard ………………………………… 23
12
six basic strategies ……………………………….. 24
Broad Cost Leader …………………………………………….. 24
Broad Differentiator …………………………………………… 24
Niche Cost Leader (Low Technology) ………………….. 24
Niche Differentiator (High Technology) ………………. 24
Cost Leader with Product Lifecycle Focus …………… 24
Differentiator with Product Lifecycle Focus ………… 24
10.1
10.2
10.3
12.1
12.2
12.3
12.4
12.5
12.6
SUPPORT TICKETS:
If you need assistance, please submit a support ticket. Login at capsim.com, click Capstone, then in the left menu, select Help > Support.
If you have problems registering, send an email to support@capsim.com.
2
Management Tools
1 Introduction
Congratulations, you are now in charge of a multimillion dollar
company. You manufacture sensors, which you market to other
manufacturers. They put your products into the devices they sell.
Your company was created when the government split a monopoly
into identical competitors. As a monopoly, operating inefficiencies
and poor product offerings were not addressed because:
• Increasing costs could be passed onto customers; and
• Mediocre products would sell because customers had no
other choices.
Although last year’s financial results were decent, your products are
getting old, your marketing efforts are falling short, your
production lines need revamping and your financial management is
almost nonexistent.
Competition in the post-monopoly era means you can no longer
ignore these issues. If you do, competitors with better products and/
or lower prices will take your market share.
Sensors Are Everywhere…
1.1 The Industry Conditions Report
Each simulation industry is unique. As your simulation starts, the
Industry Conditions Report, which is explained in Chapter 2, will
outline the beginning business environment, including customer
buying criteria.
The Industry Conditions Report is available from your
simulation Dashboard.
1.2 Management Tools
Here are the tools you need to run your company.
1.2.1 The Rehearsal Tutorial
Think of the Rehearsal Tutorial as a driving school for the
simulation. The tutorial will show you ways to steer the company,
including how to:
• Invent and revise products;
• Make marketing decisions;
• Schedule production and buy/sell equipment; and
• Ensure your company has the financial resources it needs for
the upcoming year.
The sample resources used for the Rehearsal, including its Capstone
Courier (see below) and Industry Conditions Report, mirror those
used in the actual simulation.
The Rehearsal is available from your simulation Dashboard.
1.2.2 The Capstone Courier
Every round, you and your competitors will have access to an
industry newsletter called the Capstone Courier. The Courier
(described in Chapter 5) is an extensive year-end report of the sensor
industry. It includes customer buying patterns, product positioning,
public financial records and other information that will help you get
ahead. In business, knowledge is power. If you want to evaluate your
company’s performance or analyze your competitors, the Courier is
the place to start.
Sensors are devices that observe physical conditions. For
example, the average cell phone contains dozens of sensors
Customer Survey Scores for each product (Chapter 3) can be found in
the Courier’s Segment Analysis pages. These scores determine sales
distribution. In general, the higher the score, the better the sales.
that allow it to interpret touch, spatial orientation and
signal strength.
New sensor businesses are created every day in areas as
diverse as security, aeronautics and biomedical engineering.
You are in a business-to-business market, not a direct-toconsumer market; the sensors your company manufactures
are incorporated into the products your customers sell.
The Courier Reports “Last Year’s Results”
The Courier available at the start of Round 1 displays results
for Round 0, when all companies were equal just after the
monopoly’s breakup. The Courier available at the start of
Round 2 will display the results for Round 1. As the simulation
progresses and strategies are implemented, results among
the competing companies will begin to vary.
Team Member Guide
1
Company Departments
The Courier is available from two locations:
•From the Capstone Spreadsheet, click Reports in the
menu bar; and
•On the website, log into your simulation and click the
Reports link.
1.2.3 The Situation Analysis
Completing the Situation Analysis (described in Chapter 9) will
enable you to understand current market conditions and how the
industry will evolve in the next few years. It will assist you with your
operational planning.
The Situation Analysis comes in two versions:
• Online interactive
• Downloadable PDF (pen and paper)
The Situation Analysis is available from your
simulation Dashboard.
1.2.4 Proformas & Annual Reports
Proformas and annual reports are specific to your company.
Proformas are projections for the upcoming year. Annual reports are
the results from the previous year.
The proformas will help you envision the impacts of your pending
decisions and sales forecasts. The annual reports will help you
analyze last year’s results.
1.3 Company Departments
The Rehearsal Tutorial and Chapter 4 discuss company activities. You
have four main departments or functional areas:
• Research & Development, or R&D
• Marketing
• Production
• Finance
Many simulations utilize modules such as Human Resources and
TQM (Total Quality Management)/Sustainability. Modules require
additional management decisions. Your simulation Dashboard will
tell you if any modules are included.
Companies use the Capstone Spreadsheet to enter
departmental decisions.
1.3.1 Research & Development (R&D)
Your R&D Department designs your product line. The department
needs to invent and revise products that appeal to your customers’
changing needs.
1.3.2 Marketing
Your Marketing Department prices and promotes your products. It
interacts with your customers via its sales force and distribution
system. Marketing is also responsible for sales forecasts.
1.3.3 Production
Proformas are only available from the Capstone
Spreadsheet’s Proformas menu.
Your Production Department determines how many units will be
manufactured during the year. It is also responsible for buying and
selling production lines.
To access the annual reports:
•From the Capstone Spreadsheet, click Reports in the menu
bar; or
•On the website, log into your simulation then click the
Reports link.
1.2.5 The Capstone Spreadsheet
The Capstone Spreadsheet is the nerve center of your company where
you formulate and finalize management decisions for every
department.
After you log into your simulation, the spreadsheet is
available from the Decisions link.
1.2.6 Just in Time Information
In the spreadsheet decision areas, look for the flag symbol
shown to the right. Clicking it will give you detailed
information about the area you are viewing.
2
1.3.4 Finance
Your Finance Department makes sure your company has the financial
resources it needs to run through the year. The department can raise
money via one-year bank notes, 10-year bonds or stock issues.
The department can also issue stock dividends, buy back stock or
retire bonds before their due dates.
1.3.5 Plug-ins
Plug-ins are different than modules. Plug-ins and their decisions have
a greater overall impact on your organization.
For example, the simulation might include the Ethics plug-in, which
presents you with an unexpected dilemma. Group discussion and
consensus is imperative because your decisions will affect your
financial results.
Your simulation Dashboard will notify you if a plug-in has
been scheduled.
Buying Criteria
1.4 Inter-Department Coordination
to success! Companies compete for up to eight rounds, with each
round simulating one year in the life of your company.
1.4.1 R&D and Marketing
R&D works with Marketing to make sure products meet
customer expectations.
1.5.1 Decision Audits
The Decision Audit is a complete trail of all team decisions. It will
help you identify your decision-making strengths and weaknesses.
1.4.2 R&D and Production
R&D works with Production to ensure assembly lines are purchased
for new products. If Production discontinues a product, it should
notify R&D.
1.4.3 Marketing and Production
Marketing works with Production to make sure manufacturing
quantities are in line with forecasts. Marketing’s market growth
projections also help Production determine appropriate levels of
capacity. If Marketing decides to discontinue a product, it tells
Production to sell the product’s production line.
1.4.4 Marketing and Finance
Marketing works with Finance to project revenues for each product
and to set the Accounts Receivable policy, which is the amount of time
customers can take to pay for their purchases.
The audit is available from two locations:
•From the Capstone Spreadsheet, click Help in the menu
bar; or
•On the website, log into your simulation then click the
Decision Audit link.
1.6 Company Success
The board of directors, shareholders and other stakeholders expect
you to make the company a market leader. Successful managers will:
• Analyze the market and its competing products;
• Create and execute a strategy; and
• Coordinate company activities.
Best of luck in running a profitable and sustainable company!
1.4.5 Finance and Production
Production tells Finance if it needs money for additional equipment.
If Finance cannot raise enough money, it can tell Production to scale
back its requests or perhaps sell idle capacity.
1.4.6 Finance and All Departments
The Finance Department acts as a watchdog over company
expenditures. Finance should review Marketing and Production
decisions. Finance should cross-check Marketing’s forecasts and
pricing. Are forecasts too high or too low? Will customers be willing
to pay the prices Marketing has set? Is Production manufacturing
too many or too few units? Does Production need additional
capacity? Has Production considered lowering labor costs by
purchasing automation?
1.5 Practice and Competition Rounds
Practice Rounds allow you to organize workflow among the members
of your company. You will begin to compete against the other
companies in your simulation or, if you are in a Footrace competition,
against a common set of computer-run companies.
2 Industry Conditions
The information in your Industry Conditions Report will help you
understand your customers.
Your customers fall into different groups, which are represented by
market segments. Customers within a market segment have similar
needs. The segments are named for the customer’s primary
requirements such as:
• Traditional
• Low End
• High End
• Performance
• Size
The Industry Conditions Report lists market segment sales
percentages and projected growth rates unique to your simulation.
The Industry Conditions Report is published once at the
Don’t confuse the Rehearsal Tutorial with the Practice
Rounds! During the Rehearsal Tutorial, you are shown how to
make decisions in a scripted environment. During the
Practice Rounds, you can experiment with your decisions in a
competitive environment.
After the conclusion of the Practice Rounds the simulation is reset
and the real competition begins. Now it’s time to drive your company
beginning of the simulation. It is available from your
simulation Dashboard.
2.1 Buying Criteria
Customers within each market segment employ different standards
as they evaluate products. They consider four buying criteria: Price,
Age, MTBF (Mean Time Before Failure) and Positioning.
Team Member Guide
3
Buying Criteria
A product with a
2.1.1 Price
Each segment has different price expectations. One segment might
want inexpensive products while another, seeking advanced
technology, might be willing to pay higher prices.
performance of 8
and a size of 12 is
positioned here
2.1.2 Age
Each segment has different age expectations, that is, the length of
time since the product was invented or revised. One segment might
want brand-new technology while another might prefer proven
technology that has been in the market for a few years.
2.1.3 MTBF (Mean Time Before Failure)
or Reliability
MTBF (Mean Time Before Failure) is a rating of reliability measured
in hours. Segments have different MTBF criteria. Some might prefer
higher MTBF ratings while others are satisfied with lower ratings.
Figure 2.1??The Perceptual Map Used in the
Simulation: The Perceptual Map plots product
size and performance characteristics.
2.1.4 Positioning
Sensors vary in their dimensions (size) and the speed/sensitivity
with which they respond to changes in physical conditions
(performance). Combining size and performance creates a product
attribute called positioning.
The Perceptual Map
Positioning is such an important concept that marketers developed a
tool to track the position of their products and those of their
competitors. This tool is called a Perceptual Map.
Note the Perceptual Map in Figure 2.1. You will see this map quite
often through the course of the simulation.
The map measures size on the vertical axis and performance on the
horizontal axis. Each axis extends from 0 to 20 units. The arrow in
Figure 2.1 points to a product called Able with a performance
measurement of 8.0 and a size of 12.0.
Example!
Market segments have different positioning preferences. The Low
End segment is satisfied with inexpensive products that are large in
size and slow performing. It wants products that fall inside the
upper-left set of dashed and solid circles in Figure 2.2. The High End
segment wants products that are faster performing and smaller in
size. It wants products that fall within the lower-right set of dashed
and solid circles.
Over time, your customers expect products that are smaller and
faster. This causes the segments to move or drift a little each month.
As the years progress the locations of the circles significantly change.
The example in Figure 2.3 shows the location of the market segments
at the end of the fourth year. Figure 2.4 shows the segments at the end
of the eighth year.
See your Industry Conditions Report for exact segment locations.
Figure 2.2??Beginning Segment Positions:
At the beginning of the simulation, segment
positions are clustered in the upper-left
portion of the perceptual map.
4
2.1.5 Market Segment Positions on the
Perceptual Map
Figure 2.3??Segment Positions at the End
of Year 4: The overlap between the segments decreases because the Low End
and Traditional segments move at
slower speeds.
Figure 2.4??Segment Positions at the End
of Year 8: The segments have moved to the
lower right; very little overlap remains.
Buying Criteria by Segment
Each year, some market segments demand greater improvement
than others. Therefore segments drift at different rates. Segments
demanding greater improvement will move faster and farther than
others. As time goes by, the overlap between the segments
diminishes.
Drift rates are published in the Industry Condi…
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