The Cool Connection’s new focus on Working Capital Management and IBP!

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The Cool Connection (TCC) is one of Inchainge’s business simulation games and offers its participants the ultimate (financial) supply chain learning experience through its focus on true alignment and well-articulated strategy, supported by tactical skills and knowledge. The simulation evolves around the fictional company “The Cool Connection”, a company that produces personal care products, and finds itself in financial trouble. Within the simulation, there are four roles to be played – Sales, Purchasing, Supply Chain, and Finance – and the business game is played in four to six rounds, with each round representing a quarter of the year. Participants thereby play through a full business year (or more) when entering the simulation, allowing them to observe the impact of their decisions holistically.

What’s new?

With the launch of Inchainge’s new release of The Cool Connection, Inchainge has added two new learning journeys to the game. The new standard business simulation now includes the added layer of Working Capital Management (WCM). A new variant has been developed as well, focused on Integrated Business Planning (IBP), broadening the business game’s overall scope and usability for both education and corporate customers.

The new TCC release provides key insights into leading a successful and financially healthy business. Learn how to bridge the physical and financial supply chain by managing trade-offs in WCM. Engage in cross-functional collaboration while striving for alignment. The Cool Connection caters to companies, students, and professionals at every stage of the learning process.

Next to the two new learning journeys, the new release also includes an improved user interface, that allows for faster and more intuitive navigation and use. Especially the Finance role has undergone some major changes, which increases its accessibility and allow players from a non-financial background to pick up the tasks of the role quickly.

The Cool Connection – Working Capital Management

Taking a look at the new standard setup the focus is on WCM first. The business game starts from the proposition that the management team of ‘The Cool Connection’, the fictional company central to the simulation, needs to optimize its working capital. The simulation offers the participants different levels of difficulty, depending on their place in the learning process: While level 1 focuses on the basics of the financial supply chain, level 2 addresses working capital, including the management of inventories, accounts payable, and accounts receivable. Level 3 focuses on the impact of INCO terms on costumer and supplier relations. Finally, level 4 looks at the power of Supply Chain Finance (SCF) programs to create stronger value chains.

Naturally, the new release of TCC includes the four already known roles: Sales, Purchasing, Supply chain, and Finance. Working capital is managed and influenced by all of these departments. Sales and Purchasing influence available working capital by negotiating and entering into contracts (When do customers pay? How do they pay? When do suppliers ship?). Supply Chain focuses on inventory and its involvement in the financial side of the business. It all comes together in Finance: the need for working capital must be forecasted. This is the basis for bank arrangements in the form of short-term loans and the promise around the current ratio.

All decisions taken by any role ultimately cumulate in a report in the form of a graph, where, for example, customer-finance reports or supplier-finance reports can be found and analyzed. This can help to optimize decision-making for the next round of the simulation. Ultimately, the new release of TCC is about the flow of money and how it relates to the flow of goods. In aligning these flows, the physical and the financial supply chain can be bridged.

The Special Variant: Integrated Business Planning

Next to a complete overhaul of the standard setup of the business simulation, a new variant has been added to the game as well. The IBP variant shifts the focus of the management team of fictional company ‘The Cool Connection’ in a different direction. It zooms in on the need to implement a powerful planning process that holistically considers all aspects of the business. The hook of this variant is the necessity to create a new annual financial budget for the company with as few as possible gaps between planning and reality. Thus, the IBP variant focuses on how to integrate financial planning and supply chain planning.

In most companies, the financial department makes a budget plan, and the supply chain department focuses on S&OP planning, but they often fail to come together, resulting in the production of two different demand plans. One of the two will inevitably be wrong, but alignment is needed to lead a (financially) successful business.

In fostering more understanding for the need to align the different departments via IBP, this variant includes a financial forecast simulation, which every department can access to announce their own figures – revenue (Sales), purchasing spent (Purchasing), spent on production and warehousing (Supply Chain), and financial costs Finance).

The individual rounds of the simulation focus on making financial forecasts for each quarter. These predictions are key to good performance because the planning process is integrated with the corporate performance management cycle. The financial forecast hence becomes part of the planning process. In designing an integrated business plan, the four different roles – Sales, Purchasing, Supply Chain, and Finance – must speak and understand each other’s languages. In addition, a yearly budget has to be set up. This is where conflicts can occur – if the four departments are not properly aligned, the budget plan will not be met. Gaps in the forecast of the quarterly numbers must thus be addressed swiftly.

In working together on a holistic business plan, Supply Chain and Finance focus on the planning – Supply Chain focuses on demand and supply, whereas Finance focuses on expenses and income. Sales leads the operation as every business plan starts with demand – how much will be earned and sold? Sales is therefore key in making a demand plan, both in terms of finance and in terms of volume. In the IBP variant, Purchasing plays a supporting role, as most companies spend more than 50% on purchasing. Purchasing therefore has to find the right suppliers, that are affordable and reliable and suit the business plan best.

Of particular importance for the IBP variant is the gap between the budget and the latest estimate of how the year will end. By means of this gap, a new KPI is introduced: the stock price This stock price replaces the ROI as and is based on the latest profit estimate in the financial plan combined with the predictability of the company.

How can I customize the simulation?

The Cool Connection experience can be tailored perfectly to match any knowledge level, be it from freshman student to senior executive. The design of a course is dependent on learning objectives, the background of the course participants, time constraints, budget constraints, and travel constraints. The delivery can be done online, face-to-face, or in a hybrid setting.

In conclusion

The new release of The Cool Connection offers its participants the opportunity to deep-dive into how the value chain plays an important role in keeping a business financially healthy. The two new learning journeys, WCM and IBP, offer unique insights into holistic Supply Chain Finance and are thus of great value for both educational institutions and corporations!

Do you want to know more? Join our release webinar and gain exclusive insights into TCC’s new functionalities and the new self-paced Online ‘Train the Trainer’ (e-learning)!

Interested in incorporating TCC into your course? Join our‘Train the Trainer’ online course for the new release or get access to the self-paced ‘Train the Trainer’ e-learning!

Curious? Get free trial and experience the importance of WCM and IBP first-hand!