TEAM ANDREWS(Group 8)

C116161

Cross-Functional Simulation Report

Group Members:
Pulkit Malhotra- 190103103

Rahul Batra - 190103109

Rachit Taneja – 190103106
Pushpendra Tomar- 190103104

Raghav Kacholia- 190103107

Siya Raizada - 190103145

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MISSION STATEMENT
To guarantee supply of high quality items at competitive prices while meeting the organization's
business targets just as the interests of the investors and workers. Also investing heavily on R&D to
provide added value and surpass customer expectations.

Our initial marketing strategy was to spend heavily on R&D, automation and promotion & sales budgets
in the low & high segment and price our products competitively in the remaining segments. We planned
to revisit our situation and launched new products in Size and Performance segments with better specs
than the competitors.

We were fortunate enough to finish the rounds with a ranking of first on the balanced scorecard and
having maximum sales and profits in the last round.

Round 8 results

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Research and Development Department

• R&D department is responsible for product redesign and invention. It is an essential part of the
marketing process as better quality and new products are researched and developed because of
this department.
• One of our key strategy was to keep our products within the perceptual map by adjusting the
performance parameters so that we could have the best sales of the product.
• For some segments the weightage of performance parameters was less while for some it relied
on ideal age and MTBF. We always set the parameters according to the maximum weightage.
• We launched two products one in the performance and size segments. The products were
launched in these sections because these segments are not price sensitive and we could get
maximum profits from them.
• We realized that improving positioning and reliability made our product more appealing to the
customers but it increased material costs. So there was a tradeoff between the two. Our
strategy was to position the products in line with the ideal values for the next round.
• Another learning for us was that changing MTBF alone does not affect a product’s age and it
varies from segment to segment. If the age doesn’t match then we can reposition our product to
match the ideal age.

Marketing
• The marketing department is a key department which is concerned with the price, place and
promotion of the sensors. In the marketing department the focus was also on sales forecasting.
• The price of the products determine the product’s contribution to the profit margin. We were
focused to play with reduced price in the low and traditional segment and high prices in the size
and performance segment.
• In the promotion and sales budget segment our focus was to increase the customer awareness
and accessibility. Our target was to keep these parameters more than 90%.
• While launching new products our focus was to increase the promotion and sales budget so that
when they enter the market people are aware of them.
• We realized the importance of accurate sales forecasting. Our target was to have minimum
inventory so that our inventory holding cost was as low as possible. Accordingly through our
forecast we tried that our product was never stocked out.
• We also learnt that the products in the low and traditional segment are price sensitive while the
products in the high and performance segment people are willing to pay extra for them.
• In the last 4 rounds we reduced the spending on sales and promotion budget but ensured that
the parameters remained according to our specifications.

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Production Department

• In the production department each product has its own production line and these lines remain
the same.
• We had to determine how many units of each sensor we needed to produce to meet the
demands. It was extremely important to utilize the capacity to the fullest. Our strategy was
initially to increase the capacity of low end sensors and buy capacity for our new products.
• Our key focus was also on automation during the initial rounds as an increase in automation
reduces the number of labor hours required to produce each unit of the sensor. Our target was
to reach maximum automation level in the segments we were targeting.
• Also the sales forecast was an added input to the production decision schedule. Based on the
inventory levels we had to produce our sensors. Andrews Company produced maximum in the
low segment and traditional segment.

Finance department

• In the initial rounds our strategy was to acquire capital needed to expand assets, particularly
plant and equipment. We realized that capital could be acquired through current debt, stock
issues and long term debts.
• We made the financial decisions after all the other department decisions were made so that we
could decide what funding and financial structure was needed to support the decisions.
• The current debt was always paid off on the first day of the year and it does not include any
brokerage fees. We realized that the higher our current debt rates, the more risk we would
present to our debt holders.
• The interest rates for long term debts was higher than current debts and we learnt that bonds
are retired in the order they have been issued. Bond rating is also provided each year to the
companies and we maintained a bond rating of A till the end of the rounds.
• Our strategy was to never have emergency loans on our heads and we were the only company
who never had to pay emergency loans throughout the eight rounds. For the same we took long
term and short term debts if required.
• The cash at hand at the end of each year was also available in the finances. We tried to have
high profits and in the initial rounds invested our cash to improve plant capabilities and
resources.

Human Resource

• The HR module got activated at the start of the second round and we had a strategy to spend
maximum on training hours so that it would help us to increase the productivity of the
employees.

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 • It was very important to hire workforce with high caliber so we spent a lot of money in that also.
We spent on an average $2000 every year on the same.
• Our focus was to have sufficient workers and to spend on Recruiting and Training to increase
productivity index and reduce per unit labor costs. It also helped us to gain additional points on
the balance scorecard.
• In the labor negotiation round our team was the only team not to go into strike and we had
maximum sales during that round. Keeping the workforce satisfied was our goal and having
maximum production in that round.

Total Quality Management:

• Our strategy was to invest maximum in the first two rounds when TQM was opened. Then we
reduced our investment till we reached maximum investment where we could achieve our
results.
• Investing in TQM helps to reduce material, labor and administrative costs, shortens the length of
time required for R&D projects.
• We realized that it is very important to reduce material costs and by investing in TQM we were
able to reduce it considerably.

Conclusion:
Cross Functional Simulation course provided us with immense learning opportunities wherein
we learnt the importance of team work in making crucial decisions and realizing that not all
strategies work at all times. You need to anticipate the moves and strategies of the other teams
also in order to be ahead of the competition.