scm adv planning 1
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<Name><Title>
Oracle Advanced Planning
Enabling the Demand Driven
Supply Network – An Overview
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“This presentation is for informational purposes only and may not be incorporated into a contract or agreement.”
The following is intended to outline our general product direction. Itis intended for information purposes only, and may not be
incorporated into any contract. It is not a commitment to deliver anymaterial, code, or functionality, and should not be relied upon in
making purchasing decision. The development, release, and timingof any features or functionality described for Oracle‟s products
remains at the sole discretion of Oracle.
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TRENDS ADAPT YOUR BUSINESS MODEL
Today: Tough Economic ConditionsBusiness trends forcing you to adapt new strategies
Higher degree of uncertaintyGet visibility to all demand
Manage to uncertainty by postponing inventory
Increased global competition Focus on core competency –
Increase outsourcing
Mass customizationMove point of differentiation
closer to customers
Focus on customer service toensure brand loyalty
Provide reliable and accuratecommitments to customers
Less money to invest in IT Lower cost of ownership of apps
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Long planning cycles
Supply PlanningDemand Planning
Distributionplans
Sales
Marketing
Mfg.
Response 1:
Maintain Excess Inventory
Response 2: Reserve Production Capacity
Response 3: Expedite Everything!
Traditional ApproachMulti-step planning processes, high latency, limited collaboration
Fax
Tier 2
Tier 1
CUSTOMERS SUPPLIERS
Supply Chains built onINVENTORY
Productionplans
Manufacturingplans
Paper Paper
?
Manualreconciliation
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Move to A More Competitive Model
Enable closed loopcollaborative planningprocesses across yourvalue chain
Have complete supplychain visibility
Make better decisions
React immediately todisruptions in supply chain
E-Business planning solution: zero latency, real-time collaboration
Supply Chains built onINFORMATION instead of
Inventory
Consensus forecast andproduction plan
Supply Planning
Demand Hub & Multi-dimensional analysis
Automated Exceptions
S&OP Process
Singleholistic plan
Business Intelligence
Sales
Marketing
Mfg.
Manufacturing
PortalPortal
Tier 2
Tier 1
CUSTOMERS SUPPLIERS
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Oracle Advanced Planning
Solution
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Oracle Advanced PlanningComplete e-business planning solution
Collaborative Planning CP
Sales and Operations Planning
From short-term to long-term
F r o m d
e t a i l t o s u m m
a r y
CPSC Exception Management
PSProduction Scheduling
ASCPDistribution Planning
GOPGlobal Order Promising
ASCPSupply Chain & Manufacturing Planning
IO
Inventory Optimization
DPDemand Planning
SCISupply Chain Intelligence
DevelopMarketSellOrder
Plan
Procure
Make
Fulfill
Service
Maintain
FinanceHRProjects
All Product,Customer,& SupplierInformation
SNONetwork Design
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What Our Customers Say…
Reduced inventories by 20%, increased market share from 50% to 80%
“The most exciting feature of the system to a manufacturer is constraint-basedplanning. Oracle provides the ability to plan, including resource and materialconstraints, based on suppliers' inventories and capacities.”
– Mr. V. A. Raghu, Managing Director, Tube Investments Ltd.
Improved inventory turns by 37%
“With help from Oracle's Advanced Supply Chain Planning (ASCP), we cannow respond to customer change requests within 24 hours. The system alsohelps us check if our suppliers can supply us the components we need.Previously, we've had to collect this data manually using a lot of resources.”
– Tan Lai Tong , Business Management GM, TEC Ltd.
Replaced i2 and cut planning cycles from weekly to daily“With Oracle E-Business Suite 11i, we have moved from weekly to dailyplanning, which has significantly improved our response time.”
– Clair Walizer, Senior Developer and Analyst, Canon Virginia, Inc.
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Key Capabilities
Strategic network design
Sales and operations planning
Inventory postponement optimization
Holistic planning and optimization
Multi-tier collaborative planning
Zero downtime global order promising
Real-time production scheduling
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Strategic Network Design
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Strategic Network Design
Optimize your supply chain network – Use demand scenarios as input
– Compare time-phased network configurations
Model all supply chain elements – Distribution centers, processing facilities, ship methods,
stores, suppliers, and customers
– Costs: transportation, operating, sourcing, facility ramp-upand shut-down, labor, and storage
Optimize sourcing – Output best sourcing strategy for downstream supply chain
and inventory planning
Simulate changing business conditions
– New businesses and new markets
– Outsourcing decisions
– Demand scenarios
Key capabilities
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Strategic Network Design
75% Inventory reduction 5% Capacity improvement
50% Inventory reduction Planning cycle reduced 86% 70% Inventory reduction
20% Capacity improvement
20% Inventory reduction $ 350M Inventory reduction
15% Inventory reduction 50% Inventory reduction
Planning cycle reduced 20%
50% Inventory reduction 25% Stock-out reduction
Carrier rationalization from 200 to 12
Proven deployment success and ROI: 300+ customers
BASS BREWERS COCA COLA - FEMSA
NABISCO FOODS
OWENS ILLINOIS
KIMBERLY-CLARK
KRAFT FOODS - EUROPE
DOW CHEMICAL
FORT JAMES
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Sales and Operations Planning
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Sales and Operations Planning
Balancing supply and demand
Synchronization of all operational plans
Key outputs – Consensus forecast
– Bookings forecast – new orders expected to be received
– Sales and allocations plan – expected shipments
–
Production plan Bookings forecast +/- changes in backlog = shipping forecast
Shipping forecast +/- changes in inventory = production plan
Definition
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Sales and Operations PlanningComplete and integrated process
Demand Plan
Supply Plan
Inventory andservice levels
ManagementReports
Financial planBudget plan
Sales opportunitiesTrade promotions
Ship and book historyCurrent order backlog
Inventory historyProduction historyProduction backlogCustomer forecasts
Exceptionmanagement
Sales Plan
Production PlanBookings Forecast
Balance supply, demand, andbudgets:- Determine inventory targets- Determine supply plan- Determine allocations
Capture all demand in one place
Determine consensus forecast- Determine new product plan
Evaluate and adjust plans
INPUTS PLANNING PROCESS
OUTPUTS
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Sales and Operations Planning
Demand Hub
– Capture all demand data in a central place
– Collaborate internally and externally
Drive to a consensus forecast
– Use analytics and intelligence to achieve aconsensus demand
Balance demand, supply, and budgets
– Make allocation decisions while trading off servicelevels and cost
Adapt and adjust to changing businessconditions
– Adjust demand or supply plan as conditions change
– Drive continuous improvement
Integrated solution with built-in businessintelligence
Key capabilities
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Tier 2
Tier 1
CUSTOMERS SUPPLIERS
S&OP – Demand Hub
Central repository for all demandinformation
– Customer and supplier forecasts
– POS data
– Sales and marketing forecasts
– Financial forecasts and budgets
– User-defined data (spreadsheets)
Configurable and extensible
– Meta data driven
– User-defined dimensions andhierarchies
Open
– Spreadsheets, XML, EDI, portal – Audit exceptions
Integrated
– Out-of-the-box loads for Oracle ERP
Capture all historic and future demand in a single data store
APIs
Sales
Demand
Hub
ERP Systems
Finance Marketing
Internet
PortalPortal
Manufacturing
ERP TransactionFlat file loadsEDI Transactions
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Compare and consolidate disparate forecasts
– Sales, marketing, manufacturing, customers, suppliers,Point of Sale (in units or $$)
– Use multi-dimensional analysis to adjust, allocate, androllup
Improve forecast accuracy – Better statistical forecasts
– Forecast planning percentages for models and options
– Get visibility to customer demand changes
Improve demand planning cycle time
– Move from a regimented periodic to a continuousdemand planning process
– Get real-time visibility to demand adjustments viainternal collaboration
Improve sales promotion planning
– Forecasting integrated with promotion planning
– Measure effectiveness
S&OP – Demand PlanningDrive to accurate consensus forecast
Collaborativedemand plan
Automated exceptions
Consensusforecast
Sales
Demand
Hub
Finance Marketing
Tier 2
Tier 1
CUSTOMERS SUPPLIERS
Internet
PortalPortal
Demand Planning Process
Manufacturing
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Manage product life cycles more effectively,with your trading partners
– Introduction of new products
– Phase-out of obsolete products
Improve delivery performance – Include customers in forecasting process
– Publish sales forecast to suppliers at any tier
Reduce non-value added costs and exceptionoverload
– User-defined exceptions
–
Proactive notifications – Automated exception handling via workflow
S&OP – Demand PlanningDrive to accurate consensus forecast
Sales/OrderForecast
Publish(optional)
Synchronize
SalesForecast
SalesForecast
Synchronize
Forecast Collaboration Process
CUSTOMERS
SUPPLIERS
YOU
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S&OP – Alcoa
$20.3 billion in revenues 350 operating locations in 40 countries
127,000 Alcoans worldwide
4 Major Rolling Mills - Davenport, Iowa;Lancaster, Pennsylvania; Texarkana, Texas;San Antonio,Texas
Heat Treating and Blanking Center - Danville,Illinois
Customer service and distribution centers -Irvine, California;Hutchinson, Kansas
Extruded Tube for Heat Exchangers - St.
Louis. Missouri; Monterey, Mexico
Spreadsheets, not integrated with legacy system, nor withexecution systems
Manual forecast smoothing
No system supported sales and operations planning
Monthly planning cycle, insufficient accuracy in order promisedates
Determines allocation to produce most profitable product mix withinexisting constraints
Performs all planning at the family level
Powerful Integration of supply/demand picture
– Demand Planning & ASCP supply and inventory data
– Drill Down and roll-up capability
– Reporting tools and data analysis
– Export to excel or HTML pages
Supports the S&OP Process
– Demand planning analysis and pre-work
– Operations planning analysis and pre-work
– S&OP composite picture in real time during review sessions
Source: Alcoa Presentation at Appsworld 2004
COMPANY PROFILE BEFORE ORACLE
AFTER ORACLE
Benefits
• Reduced plan cycle time – Eliminated waste on spreadsheets
• Process integration with other modules resulted in technology pull for new systems
• Integrated sales and operations planning process resulted in one consensus forecast number
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Inventory Postponement Optimization
Inventory levels and policies aresynchronized across the entiresupply chain
Manage to uncertainty – Demand, supply, and lead-time
variability
Pull model, driven by point ofpostponement
Higher customer service at lowerinventory cost
Time-phased safety stock buffersat all levels
Multiple target service levels
Manage to uncertainty, reduce inventory, improve customer service
Suppliers
ContractManufacturers
FinalAssembly
CentralDistributionCenters
RegionalDistributionCenters
Customers
Without Postponement With Postponement
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Inventory Postponement Optimization
Reduced inventory cost
Increased flexibility to handle supply and demanduncertainty
Rapidly handle product mix changes
Reduced average fulfillment lead times
Reduced material liability
Ability to absorb yield exposure
Business benefits
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Inventory Postponement Optimization
Reduce inventory without sacrificingcustomer service
– Postponement
– Risk pooling
Manage supply chain variability
Choose the best service level strategy
based on cost and revenue – Inventory budget constraints
Invest in profitable channels, products,and customers
Manage seasonality and product life
cycle characteristics – Recommend time-phased safety stock to supply
planning
Out-of-the-box optimization
– For planners, not programmers
Key capabilities
I n v e n t o r y I n v e s t m e n t
Service Level
10 30 50 75 80 85 90 95 100
Higher Service Level
LowerInventoryCost
WithoutOracle
WithOracle
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Reduce inventorywithout impactingcustomer service
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Simulate multiple
scenarios to find theoptimal trade-offbetween cost and
service level
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Inventory Postponement Optimization
Focusing on ‘class A’ parts for service business
Determining safety stock levels across finishedgoods and raw materials
Realizing significant benefits – Example: reduced inventory for one part by 10%
Customer example – GE Transportation Aircraft Engines, US
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Holistic Planning and Optimization
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Holistic Planning and Optimization
Unified solution for supply chain andmanufacturing planning
Segment the problem as needed
Optimization for planners notprogrammers
Scalable and reliable
Short-term planning
Long-term planning
Semicon
Process
Discrete
Flow
ProjectPlants
Warehouses
Customers
Suppliers
DCs
Faster and better supply chain plans
Internet
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Holistic Planning and Optimization
Supply Chain Planning – Product family and item level planning
– Alternate components, resources,processes, suppliers, facilities, and shipmethods
– End-item substitution
– Critical items and resources
– Aggregate resources
– Bills of distribution and transfer rules
– Customer and supplier facilities
Manufacturing Planning – Simultaneous resources
– Batch resources
– Alternate resources
–
Minimum transfer quantities – Complex, network routings
– By-products and co-products
– Line rates and takt times
– Setup and run
One solution for comprehensive supply chain and mfg planning
One supply chain model, one planning engine, one setup
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One holistic plan
Holistic Planning and Optimization
Adapts to your current businessmodel
– Single plan or multiple plans
Evolve planning model at yourown pace
– Re-configure easily by modifying planoptions instead of re-implementing orre-modeling
Multiple models can co-exist
Highly adaptable; segment the problem as needed
One DRP, multiple MRP
DRP for all Orgs
MRP Org 1 MRP Org 2 MRP Org 3
SCP for all Organizations
Multiple MPS, multiple MRP
MPS for BU 1
MRPOrg 1
MRPOrg 2
MRPOrg 3
MPS for BU 2
MRPOrg 4
MRPOrg 5
MRPOrg 6
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Holistic Planning and Optimization
Interceramic
– 91 Distribution centers, stores, andfranchises
– 4 Plant warehouses
– 7 Manufacturing plants
– 3000 BOMs, 100,000 SKUs
–
Run DRP, constrained MPS, and rawmaterial MRP
Knowles Electronics
– Global planning instance
– 2 Locations in the US
– 1 Location in Europe
– 5 Locations in Asia
– Mixed mode manufacturing
– Make to stock – Make to order
– Configure to order
– Global order promising against 1 centralplan
Highly adaptable – Customer examples
Knowles Electronics hasreduced inventory by $1M permonth after implementingAdvanced Planning
SuppliersManufacturing
plantsDistribution
chain Customers
ConstrainedSC plan
DRP plan
ConstrainedMPS plan for
all facilities
Collaborativedemand
plan
Inventorypostponement
plan
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Holistic Planning and Optimization
Make better decisions faster
– Level load
– Choose alternatives
– Make/buy decisions
– Late demand diagnosis
Out-of-the-box optimization – Use costs or decision rules
Start quickly
– Planners define the problem to solve
– Flexible defaulting
Reduce planner workload
Optimization “For planners, not programmers”
GE AE has moved from running separate plans in 36 facilities to runninga single holistic plan across their DCs, end-assembly, contractmanufacturing, and component shops, and as a result has reduced theirplanning organization significantly
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Holistic Planning and Optimization
Patented memory-based architecture – Multi-threaded snapshot
– Optimized end-to-end run time
Database centric – All plan information resides in the database
– Leverages high performance database capabilities
Flexible plan scope – Telescoping granularity
– Apply constraints selectively
– Subset planning
Scalable
High volume customers: Agilent Technologies, Sony SNC, GE AE, NCR, Panasonic, Alcoa…
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Multi-Tier Collaborative Planning
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Multi-tier Collaborative Planning
Plan your extended supply chain
– Share forecasts and supply commits withcustomers and suppliers
– Get visibility to supplier capacity
– Reallocate key components
– Make alternate sourcing decisions
Reduce inventory cost and improvefulfillment
– Suppliers manage your inventory
– Manage your customers‟ inventory
React quickly to supply chainexceptions
– Waterfall analysis
– User-configurable exceptions
– Automated exception handling via workflow
Full visibility and synchronization across the extended supply chain
Run plan
Optional
Forecast ‘memory’
Supply commit
‘boards’
Supply commit ‘memory’
Demand ‘boards’ Run plan
Demand‘systems’
Supplyforecast
Consensusforecast
SUPPLIERCUSTOMER YOUCONTRACT
MANUFACTURER
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Automate inventory replenishment with suppliers and customers
Receive items
Pay on receipt/use
Check
inventorystatus
Ship items
VMI Agreement(with supplier)
VMI AgreementVMI Agreement
Receive items
Pay on receipt/use
Ship items
VMI Agreement(with customer)
Send consumptionadvice
VMI and Consigned Inventory
CUSTOMER YOU SUPPLIER
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Customer Example: Alcatel eND
Enabled 100% virtual enterprise
Plan virtual supply chain
– Planning cycle time reduced by 75%
Reduced inventory by more than 65%
Reduced material liability by 80%
Established global closed-loop process controls
Improved supply chain visibility
Projected annual savings of $15M
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Zero Downtime Global Order
Promising
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Zero Downtime Global Order Promising
Promise orders based on: – Material availability
– Manufacturing capacity
– Transportation capacity
– Supplier capacity
Global statement of availability – All facilities, material, resources, and suppliers
Drive fulfillment decisions based ondemand and supply plans
– Promise based on optimal supply decisions
Allocate available supply and capacity
– By channel, customer, or product – Priority and stealing rules
Manage commitments to key customers – Re-schedule and re-sequence your backlog
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Run new plan
Zero Downtime Global Order Promising
Zero downtime
– No order promising downtime whenunderlying supply chain plan isrefreshed
– No sales order is lost, automatically re-
promise sales orders against new plan
Open, reliable, and scalable
– Engine runs inside the database
– No memory models to load!
– Multi-threaded
– Integrated with OM, iStore, and CallCenter
– Easily integrate with legacy systems
Guaranteed uptime and consistency via patent-pending architecture
Current plan
Promise Orders Promise Orders
Copy Run Copy
? ? ? ? ? ? ?
New planDowntime or
Inaccurate orders
Typical Approach
Oracle Approach
Current plan
Promise Orders Promise Orders
Run new plan
Copy RunSync &
Re-promise
New plan
Swap
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Agilent Technologies Performing multi-level capable-to-promise
Greatly reduced expedite orders with accurateorder promising dates
Moved from batch to online order promising
Increased customer satisfaction of key
strategic customers by using allocated ATP 24x7 worldwide order operation with „zero
downtime‟ CTP
Meet customer requirement by utilizingsubstitute components
Cisco Every order for every router sold worldwide goes
through GOP
Complex order promising problem
– Product and channel allocation rules
– Extensive use of ship sets in an assembly to orderenvironment
– High volumes
Intersil Using material and resource constraints (CTP)
across virtual supply chain
Sales people promise orders online in seconds
Customer examples
Zero Downtime Global Order Promising
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Real-Time Production Scheduling
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Real-Time Production Scheduling
Maximize production throughput – Optimize your shop floor; detect floating bottlenecks
– Reduce WIP inventory by rapidly synchronizing multi-stageproduction schedules
– Account for complex setup and change-over scenarios,machine breakdown, supply and resource shortages , co-and by-products, alternate resources, routings, and
operations
Model all elements of your shop floor – Work centers, resources and resource groups, shift capacity,
operating costs
– Lead times: setup, change-over, and run
– Sequence dependent setups, contiguous operations,production campaigns, batching
Implement most optimal schedule – seamlessintegration with Oracle EBS
– Output best schedule for process (OPM), discrete MFG), andsemi-conductor (OSFM) manufacturing (available 2006)
Key capabilities
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Real-Time Production Scheduling
GE Energy Improved schedule accuracy and confidence
by reflecting real time shop floor constraints
Finite machine, crew and tool resourceconstraints
Floating resource bottlenecks due to demand
mix variability Operation sequence dependent setup times
Operation buffering to avoid intermittent gluegun usage
Alternate resources with preferences
Simulations of hot order impact on existingschedule
Complex demand priorities
Toyota Racing Division Reduced schedule creation from 3 weeks to < 2
hours
Support re-planning based on constant designchanges during production
Respect for crew specialization
Optimized use of un-manned operations duringdowntime
Nampak Reduction in time lost due to sequence dependent
press setups for container styles and sizes
Customer examples
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Integrated Performance Management
andProcess Automation
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Integrated Performance Management
Define targets
Measureperformance
Executetransactions
ManagementReports
Notify on “out
of tolerance”
Analyze exceptions based on
facts; take immediate corrective
action
Identify key performancemeasures and set targets
Calculate KPIs and compare to
plan; notify decision makers of
exceptions
Perform trend analysis and
adjust business plan and targets
Role-based portals
DP• Forecast accuracy• Margin analysis• Promotion effectiveness
ASCP• Planned utilization• On-time delivery• Planned margin
IO• Service level analysis• Plan versus profit• Postponement savings
TP• Carrier contract utilization• Cost per unit weight• Cost per unit volume
CP• Supply commit variability• Order forecast variability
PLAN TO PERFORMANCE PROCESSBUSINESS INTELLIGENCE
OUTPUTS
Closed-loop plan-execute-measure-adapt process
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Automated end to end planning process – Completely integrated business process flows
across all products
Automated plan execution – Auto-release orders and reschedule
recommendations
Configurable exception management – Workflow enabled exceptions
– User-defined exceptions
– Configurable thresholds
Kyocera has workflow-enabled their planning process tothe extent where their planners manage all the planexceptions by responding to email notifications
Increase planner productivity
Process Automation
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Scalable and Open Architecture
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Scalable and Open Architecture
High performance – In-memory only when needed
– Multi-threaded snapshot
– Leverages key database features likematerialized views, partitions, andanalytical workspaces
Reliable – All plan information resides in the database
– Hot backup and recovery
– Leverages grid computing infrastructure
Open and standards based – Runs against all versions of Oracle EBS
11.0, 11i
– Deploy against legacy systems – XML, flat file, EDI support
Database-centric architecture
APIs
Oracle ERP
Legacy Systems
XMLEDI
Flat file
Order PromisingEngine
AnalyticalWorkspaces
KPIs Workflows Plans
Internet
PortalPortal
Legacy DeploymentsCochlear, Embraer, FXAP, NCR, Interceramic, Perkin Elmer,GE Transportation Aircraft Engines, Xilinx, …
TRADING PARTNERS INTERNAL USERS
Advanced Planning
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Momentum
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Ongoing Momentum
1000+ Advanced Planning customers
– Both new installs and upgrades, several legacy systemdeployments
– 50% same instance, 50% distributed architecture
– Broad use of modules
– Worldwide deployments US, Brazil, Mexico, UK, France, Italy, Spain, Switzerland, Belgium, Turkey, Israel, South
Africa, Singapore, Japan, India, Taiwan, Indonesia, Australia, New Zealand, Korea,China, Malaysia, Netherlands, Denmark, …
– Large-scale, complex deployments across all industries
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A Few Live Customers …
Intersil - ASCP, DP, GOP
Fuji Xerox Asia Pacific - ASCP, DP
Perkin Elmer - ASCP, GOP
NCR - ASCP, DP
Namitech - ASCP, GOP
Emerson – ASCP, DP
BMW – SNO
Xilinx - ASCP
UPS Logistics - ASCP, GOP
Agilent - ASCP, GOP, DP
Mykrolis - ASCP
Knowles Electric - ASCP, GOP
Panasonic - ASCP
Honeywell S&C - ASCP, DP
Embraer - CP, DP
Tube Investments - ASCP
Toyota – PS Eaton Trucks - ASCP
Kyocera – ASCP
Nampac – PS, SNO
Hoffman - SNO
Cisco - ASCP, GOP
Alcoa - ASCP, DP, GOP
Canon Virginia – ASCP, CP
GE Energy Power Systems - ASCP, GOP
GE Transportation Aircraft Engines - ASCP
GE Energy - PS
Silgan Plastics - ASCP
Qualcomm - ASCP, DP, CP
McGraw-Hill - ASCP, DP
Alcatel eND - ASCP, DP, CP
Intersil – ASCP, DP
Cervecería Quilmes - SNO
Mango - CP
Rockford - ASCP, DP
Quantum - ASCP, DP
GrafTech International - SNO
Boeing - ASCP Anugra Argon Medica - ASCP, DP
Cochlear - ASCP, DP
Inventec - ASCP, GOP, CP
Dow Chemical – SNO, PS
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Adding Value and Assuring ROI
Intersil reduced inventory by 50%, reduced response time for criticalproducts from 336 to 24 hours, 246% ROI
Xilinx achieved a 98% delivery performance to promise date
Alcatel eND moved to virtual supply chain model and reducedinventory by more than 65%
Anugrah Argon Medica improved on-time delivery to 98%
TEC Electronics improved inventory turns by 37%
Tube Investments reduced inventories by 20%, ramped upproduction by 20%, increased market share from 50% to 80%
Dow Chemical reduced inventories by $350M, rationalized carriersfrom 200 to 12
GrafTech reduced inventories by 40% and lead times by 20%
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• Large contract manufacturer of voice and digital imaging,and voice and data transmission products
• $360M revenue
• End-to-end planning run = 2 hrs
• Collaboration with 150 suppliers
• Full CPFR implementation
• Uni-directional planning process (Cisco > Inventec > Suppliers)
• No supply-demand allocation process• Excess inventory, extensive expediting
• Supplier bottlenecks – late delivery of critical components
• No support for CPFR
• No constrained based order promising – inaccurate order dates
• Spreadsheet based tools, disconnected systems
• 4 month implementation
• Operates complete collaborative planning process using ASCP, GOP, andCP
• Collaborative supply-demand planning with key customers
• Collaborative supply planning with 150 suppliers
• Constrained multi-org plan, weekly; used to publish order forecast tosuppliers, who provide supply commits as input
• Daily plans as a basis for material constrained ATP
• VMI with suppliers – full visibility to stock levels and in-transit
Benefits
• Reduced order promising lead-time from 3 days to minutes
• Achieved real-time visibility to supply and demand
• Reduced planning cycle time through an integrated forecast-to-plan model
• Highly automated planning processes versus previous use of spreadsheets
Inventec Multimedia & Telecom, TaiwanCOMPANY PROFILE BEFORE ORACLE
AFTER ORACLEPLANNING BENCHMARK
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• Retail Services Division (RSD) and Financial ServicesDivision (FSD)
• Manufacturer of point of sale and high-end scanningequipment, and service provider of complete storeautomation, ATMs, and self-service kiosk solutions
• $5.6B revenue FY02
Demand Planning
• 500,000 demand planning composites
• 12+ month forecasting horizon
• 20Gb memory model
Supply Chain Planning
• 20 orgs
• 1,000,000 items
• 2,5 hours end-to-end planning run
• Each organization ran individual MRP, 54 ERP instances• Integration between orgs was based on buy-sell relationship
• Forecast accuracy < 50%
• Sales and operations planning cycle time: 21 days
• No system supported sales and operations planning process
WITH ORACLE
• Runs worldwide manufacturing and sales operations using ASCP, DP,and GOP
• Single, global plan for 20 orgs, including worldwide distribution centersand manufacturing plants
• Runs daily constrained enterprise plan (EDD)
• Complex procured configurations
• Using real-time material constrained, multi-org, multi-level ATO orderpromising process
Benefits
• Synchronization of entire worldwide supply chain with complete global visibility
• Strongly reduced planning cycle time
• Strongly increased forecast accuracy
• System supported sales and operations planning process
NCR Corporation, US
COMPANY PROFILE BEFORE ORACLE
AFTER ORACLEPLANNING BENCHMARK
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Orcl 11.0
Orcl 11.0
Orcl 11i
Toshiba TEC, Worldwide
$3.1B manufacturer of documentprocessing equipment
Previous process
– Multiple regional ERP instances
– Decentralized planning process
Current process
– Global centralized planning model – ASCP is cornerstone of Global SCM project
– Uses ASCP to make global productionallocation decisions
– Uses material and resource constrainedplanning
Benefits
–
Moved from a monthly planning cycle to aweekly cycle
– Reduced manufacturing cycle times
– Optimized worldwide inventory levels
Read their online testimonial
Global planning deployment – Multi Instance
US
Europe
Advanced Planning 11i
China
Japan
Malaysia
Resource and materialconstrainedProduction Plan (MPS)
Manufacturing SitesDistribution Sites
Toner Mfg Plant
Japan – Distribution Sites
Forecast
Forecast
Forecast
MRP
MRP
MRP
Orcl 11i
Orcl 11.0
Orcl 10.7
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Highly complex, large scale model
• $1.586B net revenue (FY03)
• Legacy order promising using ATP
• Disparate planning tools across supply chain
• Reactive, manual, and time consuming plan analysis
• 1 week planning cycle
• Manual forecast generation• No system supported S&OP process
• Runs worldwide manufacturing and sales operations using ASCP, DP,and GOP
• Runs optimized enterprise plan, twice/week• Plan includes tier-3 supplier organizations• Low cost, high volume and high mix demand• Using real-time CTP to promise orders 24x7, with use of complex
allocation rules• Using complex network routings
• Scheduling 2 million operations• 6-8 BOM levels, ~25 components per BOM• >50,000 items, 6 month planning horizon• < 50 ASCP and 10 DP users• >20 orgs• 25Gb memory model, end-to-end 15 hrs run
• $2.53B and $0.76B net revenue (FY03)
• Legacy order promising using ATP
• Manual order promising with fixed lead-time
• Weekly, cascaded MRPs (4 wk propagation)
• No system supported S&OP process
• Multiple, divergent systems/process statistical forecasting, newproduct introductions, or promotions
• Runs worldwide manufacturing and sales operations using ASCP,DP, and GOP
• Runs weekly unconstrained enterprise plan
• High value, low/moderate volume demand; using 32 sub-plans, newproduct introductions, and promotions
• Using real-time ATP to promise orders
• Using multi-level ATO and PTO models
• Planning ~1,500,000 forecast entries
• 6-12 BOM levels, ~1000 components per BOM
• ~400,000 items, 12 month planning horizon
• 200 ASCP and 15 DP users
• 12 factory orgs, 5 SMI orgs, 1 CM org
• 15Gb memory model, end-to-end 12 hrs run
Agilent, Worldwide
SEMICONDUCTOR PRODUCTS GROUP (SPG)
AFTER ORACLE
BEFORE ORACLE BEFORE ORACLE
AFTER ORACLE
TEST and MEASUREMENT, and AUTOMATED TEST GROUP (ACE)
PLANNING BENCHMARK PLANNING BENCHMARK
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GrafTech International, Worldwide
HQ in Wilmington, DL, USA
Manufacturer of carbon and graphiteproducts, used in steel and other metalsindustries
$700M revenue
13 manufacturing facilities on 4 continents
Customers in 60 countries
COMPANY PROFILE BEFORE ORACLE
AFTER ORACLE
Benefits
Organization had tremendous challenges keeping up with fastchanging and demanding graphite electrode business climate
Internationalization issues
No metrics to drive decisions to improve profitability
No system supported network design process
Runs worldwide network design optimization using SNO
Multiple simulation scenarios across 13 manufacturing facilitiesworldwide
Improved service levels through lead time reduction
Using storage, transportation, sourcing, operating, and labor costs
• Optimization of entire worldwide supply chain network
• Reduced inventory by 40%
• Reduced lead times by 20%
• Strongly improved resource utilization, globally
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Dow Chemical, Worldwide
COMPANY PROFILE BEFORE ORACLE
AFTER ORACLE
Benefits
• Optimization of entire worldwide supply chain network
• Reduced inventory by $350 million
• Reduced carriers from 200 to 12
• Strongly improved resource utilization, globally
HQ in Germany
Manufacturer of chemicals
$28B revenue
7 manufacturing facilities
Customers worldwide
Organization had tremendous challenges keeping up with fastchanging business climate
Inventory levels and logistics costs were proportionally high
No system supported network design process
No production scheduling system
Runs worldwide network design optimization using SNO
Multiple simulation scenarios
Improved service levels through lead time reduction
Using storage, transportation, sourcing, operating, and labor costs
Improved production throughput in all 7 plants
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Cervecería Quilmes, Latin AmericaDeveloped regional SNO model to answer critical logistics questions
• Market leader in Argentina, dominates beer markets in LatinAmerica (Uruquay, Paraguay, Bolivia, Chile)
- Quilmes supplies 60% of beer in these markets
- Quilmes bottles 90% of PepsiCo branded sales in Argentina
• Annual revenues $940M
• Consolidated assets of $1.5B
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Quilmes Capacity Planning
Sourcing of raw materials?
OW?
Malt?
What?
When?
How much?
What?
When?
How much
Interplant movements?
Deployment of inventories?
When?
How much?
Where from?
Seasonal changes? Interplant
movements?
Increases / divestment ?
Supplier
Brewing Bottling Warehouse
Demand
Brewing Bottling
SupplierDemand
DC
Warehouse.
Demand
Developed regional SNO model to answer critical logistics questions
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Quilmes Capacity PlanningDeveloped regional SNO model to answer critical logistics questions
• Quilmes management can evaluate:
- Impact of changes in demand mix - size (specialization and de-specialization of bottling lines)
- Impact of changes in demand mix - brew (specialization and de-specialization of plants)
- Acquisitions: opening and closing of production lines, plants, and DCs
- Responses to demand uncertainty
- Changes in sourcing of critical supplies for a given plant and period
- Integration of processes and acquisition of a supplier or suppliers
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How To Get There ?
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Start with Unconstrained ASCP
Improve planner productivity
– New productivity enhancing UI
– Planner collaboration
Reduce your planning cycle time frommonths to hours
– Holistic planning
– Improved scalability and performance
Make better decisions faster
– Improved exception resolution
– Improved modeling
Reduce non-value added costs
– Workflow based exceptions
Drive continuous improvement
– Integrated business intelligence
Better MRP solution at low initial cost
MRP APS Common Infrastructure
ASCP
Oracle Applications
(11.0, 11i)
Unconstrained
Foundation for future growthCommon infrastructure
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Unconstrained ASCP
Use a single plan to plan your entire supply chain to reduceplanning cycle time
– Simultaneous material and capacity planning
– Plan process and discrete mixed models
– Perform forecast consumption inline
Plan at aggregate level, as well as detailed level in a single plan,with better accuracy
– Time granularity in plan horizon
– Account for yields
Leverage advanced problem solving and analysis tools –
Comprehensive exception management and automation through workflow – Extensive pegging capabilities
Measure plan to target performance – Integrated performance management
Make better decisions leveraging a more comprehensive model
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Leverage a stronger foundation for
future growth
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1. Improve The Quality Of Your Plans
Improve plan quality
– Automatically recommend alternativesuppliers, components, resources, facilities,and routings
– Generate feasible plans that respect yourmaterial and resource constraints
Make better decisions faster – Cost based optimization: maximize profit,
inventory turns, and customer service
– Out-of-the-box optimization
– Priority based decisions
– Drag-and-drop rescheduling
Improve resource scheduling – Schedule simultaneous resources
– Batch resources
– Minimum transfer quantities
Use constraints and optimization to improve decision making
MRP APS Common Infrastructure
ASCP
Oracle Applications
(11.0, 11i)
Unconstrained
Constrained
Optimized
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2. Expand Your Solution Footprint
Sales and Operations Planning – Balance demand, supply, inventory and budgets
Network Design – Optimize your supply chain network
Demand Planning
– Improve forecast accuracy Inventory Optimization
– Improve service level at lower inventory cost
Global Order Promising – Promise more reliable dates to customers
Collaborative Planning
– Automate inventory replenishment and supplychain collaboration with your trading partners
Production Scheduling – Maximize your production throughput
Start with your most important problem
MRP APS Common Infrastructure
Oracle Applications(11.0, 11i)
ASCP
Unconstrained
Constrained
Optimized
Demand Planning
Global OrderPromising
CollaborativePlanning
InventoryOptimization
Sales and Operations Planning
Network Design
ProductionScheduling
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Supply Chain and Manufacturing Planning
Collaborative Planning
Demand Planning DP
Inventory Optimization IO
Global Order Promising GOP
CP
ASCP
Sales and OperationsPlanning
Forecast
Customerforecast
Orderforecast
Constrained plans
Supplier capacity
Time-phased safety stocks
Forecast anddemand variability
Supplycommits
Orderforecast
Network Design SNOForecast scenarios
Production Scheduling
Plannedorders
Firm supplyschedule
Sourcingrules
Sourcingrules
Today
Coming
Leverage integration at incremental investment
Integrated, yet Modular
PS
CUSTOMERS
PLANNING PROCESS
SUPPLIERS
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Summary
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Oracle Advanced PlanningE-Business planning solution: zero latency, real time collaboration
Consensus forecast and
production plan
Supply Planning
Demand Hub & Multi-
dimensional analysis
Automated Exceptions
S&OP Process
Single
holistic plan
Business Intelligence
Sales
Marketing
Mfg.
Manufacturing
PortalPortal
Tier 2
Tier 1
CUSTOMERS SUPPLIERS
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Why Oracle!
Integrated planning, execution, and collaboration
Holistic planning and optimization
For planners, not programmers
Integrated performance management
Lowest total cost of ownership
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Key Takeaways
Proven and complete planning solution – Many live customers on multiple products, across a wide variety of industries
– Large-scale, complex, worldwide deployments
– For Planners, Not Programmers - Out-of-the-box optimization
– Superior architecture - scalable, database-driven planning; common data model across allengines, shared with execution
Provides significant value – Large reduction in planning cycle time
– Significant reductions of inventory and increase in customer service levels
– Enables customers to implement best practices
Progress at your own pace, transition gradually
– Quickly start with unconstrained planning – Move up to constrained or optimized planning
– Leverage out-of-the-box integration to rapidly extend planning footprint
Low risk, high value transition to a better planning system
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INFORMATION AGE APPLICATIONS
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Alternative Slides
Shorter version of IO section
A B A h I O i i i
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A Better Approach – Inventory Optimization
Increase flexibility and reduce costs by moving inventory away from thecustomer to the point of postponement
Account for demand, supply, and lead-time variability when determining thepoint of postponement and inventory levels
Synchronize inventory levels and policies across the supply chain
Helps you move from a push model to a pull model
Respond quickly to demand and supply fluctuations
SuppliersContractManufacturers
FinalAssembly
CentralDistributionCenters
RegionalDistributionCenters Customers
Old way Push Inventory
New way Postpone Inventory
I P O i i i
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Inventory Postponement Optimization
Identify right postponement strategy foryour business
– Simulate alternate business scenarios
– Trade off inventory investment with customerservice levels
– Vary service levels by channel, customer, andproduct
Holistic view of the supply chain – Manufacturing and distribution locations
– Customer and supplier locations
Account for all uncertainty and changesin your supply chain
– Demand, supply, manufacturing, and transit leadtimes uncertainty
– New product introductions and product phase-outs
Leverage cutting edge optimization, buthide complexity from users
– Stochastic optimization; risk pooling
Key capabilities
I n v e n t o r y I n v e s t m
e n t
Service Level
10 30 50 75 80 85 90 95 100
Higher Service Level
LowerInventoryCost
WithoutOracle
WithOracle
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Reduce inventory
without impactingcustomer service
Simulate multiple scenarios to
find the optimal trade-offbetween cost and service level