HungChang Fu, CPIM

1
(No Transcript)
2
Achieving Higher Value by Extending Enterprise
Resource Planning to Advanced Planning and
Scheduling with Oracle Advanced Planning Solutions

• Hung-Chang Fu, CPIM
• Solution Director, Oracle Corporation

3
Safe Harbor Statements
The following is intended to outline our general
product direction. It is intended for information
purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver
any material, code, or functionality, and should
not be relied upon in making purchasing
decisions.The development, release, and timing
of any features or functionality described for
Oracles products remains at the sole discretion
of Oracle.
4
A Changing Global Landscape

• Evolving Challenges
• Complexity of Business
• Globalization
• Outsourcing
• Shorter Lifecycle
• Variability of Supply and Demand
• Less Customer Loyalty
• Mass Customization
• Shorter Order Lead Time
• Growth and Competition
• Mergers and Acquisitions
• Maximize Profitability During Growth

3PLs
Consumer Direct
Component Manufacturer
Business Direct
Distributor
Contract Manufacturer
OEM Hubs
OEM
Semiconductor Manufacturer
Channel
5
Impacts to Supply Chain
Business trends forcing you to move to demand
driven adaptive enterprise
EVOLVING CHALLENGES
IMPACTS TO SUPPLY CHAIN
Older business models are challenged by the new
decentralized global network model
Introduces new challenges and focus areas

• Complexity of Business
• Variability of Demand and Supply
• Growth and Competition

6
Only The Adaptive Survives
Competitive
advantage
1970
1980
1990
2000
2010
2020
Source Forrester Research
7
An Ideal Demand Driven Supply Chain
Planning happens in days, Execution happens in
hours
3PLs
Consumer Direct
Component Manufacturer
Business Direct
Distributor
Contract Manufacturer
OEM Hubs
OEM
Semiconductor Manufacturer
Channel
8
Why Is Demand Driven Important
Market leaders all have supply chains that is
more responsive to customer demands - Yossi
Sheffi, MIT, in the Economist, June 17, 2006
9
Oracles Comprehensive Solution
Complete, best-in-class e-business supply chain
management platform
Trading Partners Customers
Best in class Business Processes
Operational Excellence
Real-Time SOP
Demand driven Adaptive planning
Multi- Enterprise Collaboration
Supply Chain Risk Management
Customer Relationship Management
Customer Fulfillment
Role-based Portals
Network Design
Collaborative Demand Management
Integrated Planning Functions
Demand Sensing And Shaping
Demand Supply Synchronization
Preconfigured Worksheets and Workbenches
Holistic Supply Planning
Promise, Fulfill, Replenish
Real-Time Sales Operations Planning
Predictive Trade Planning Optimization
Channel Field Sales Optimisation
Advanced Supply Chain Planning
Production Execution
Order Capture Logistics Management
Strategic Network Inventory Optimization
Realtime Collaborative Planning
Demand Planning Advanced Forecasting
Products
Platform
Embedded Analytics
BPEL
Application Connectors
Master Data Management
WFL
LegacyERP
SAP
EBS
E1

10
Oracles Information-Driven Supply Chain
Management Offering Enables You to
Supply Network Design and Risk Management
Demand Driven Adaptive Planning
Drive Operational Excellence
11
Supply Network Design and Risk Management
1 Threat Factor To Revenue
Supply Chain
20
Price Fluctuations
12
Labor Issues
10
IT Systems
8
Mgt Malfeasance
Source Managing Business Risk 2006 Beyond, FM
Global Harris / USA Today, 2006 Survey 602
Global CFOs / Financial Executives
8
SC Disruption within past 24 mos
82
Top Pressures Driving Supply Risk Management
Longer lead times
79
Pressure from executives
78
Customer pressures
77
Global sourcing
73
Lean/JIT initiatives
73
Supply assurance outweighs cost
70
Supply base reduction
69
Regulatory pressures
59
Transportation constraints
58
12
What Leaders Do
Identify
Analyze
Mitigate

• Structural risks
• Single source supply
• Natural disasters
• Long-term contracts
• Outsourcing
• Variability risks
• Demand spike
• Inventory excesses
• Supplier non-compliance

• Prioritize risks
• Frequency vs.impact
• Cost of risk vs.mitigation
• Compare scenarios
• Excess inventory vs. redundant capacity?
• In-house vs. Outsourcing
• Single sourcing vs. Multi-sourcing

• Flexibility
• Alternate sources
• Inventory pooling
• Minimizing Variability
• Part standardization
• Supplier volume price contracts
• Currency hedging forward buys
• Redundancy (not preferred)
• Increased inventory to protect service levels
• Excess capacity

Analyze
Mitigate
Identify
13
Design Networks Holistically

• Key to perform more frequently
• Merger and acquisitions are more common
• Rapidly changing fuel costs
• Outsourcing strategies more prevalent
• Need to consider competitor strategies when
  introducing new products
• Consider the entire global virtual network
• All manufacturing and distribution facilities
  including outsourced operations
• All geographies and markets
• All sources and modes of transport
• Evaluate sourcing strategies in the context of
  net delivered cost
• Analyze the effect on working capital and cash
  flow of increased lead times due to outsourcing
  and off-shoring
• Determine single versus multi-sourcing strategy
• Consider the increased buffer stock needed to
  hedge against increased variability
• Rationalize your asset strategy for profitability
• Determine right number of assets in supply chain
  and best locations
• Consider all costs opening and closing costs,
  inflows from salvage, fixed and variable costs

14
Account for Variability
Central Distribution Centers
Regional Distribution Centers
Contract Manufacturers
Final Assembly
Suppliers
Customers
New way
Postpone Inventory
Improved Optimization
15
Demand Driven Adaptive Planning
Supply chain leaders are able to shape demand,
instantly respond to market changes, and crush
their competitors. Leaders carry 15 less
inventory, are 60 faster to market, and complete
17 more perfect orders.
16
What Leaders Do

• Forecast-Driven Planning
• Predictive - use formulas and history to forecast
  demand
• Uses buffers to absorb demand shocks
• Expensive use of working capital

• Demand-Driven Planning
• Demand Sensing Uses demand signals to plan and
  manage supply
• Demand Shaping Uses strategies and information
  to shape demand
• Demand Response Fulfillment based on customer
  requirements

• Implications
• Structural better information sharing better
  process alignment
• Cultural collaboration communication
  alignment infrastructure
• Results reduced working capital, better
  customer satisfaction

17
Sense Demand Real-Time
JAPAN
11/18 5pm New photo printer sales at -25 of
estimate, request TV add
11/20 12pm New camera sales at 150 of
estimate
Region South Sales Forecast QTY Change
Tokyo Store 1 Forecast Change (YEN)
HQ
ALERT Problem in US Region East
TV add camera printer promotion airs 12/21
8pm
11/20 2pm Budget approval for global TV add
Consensus Forecast
20th Century Fox processes real time updates from
15,000 stores daily
18
Sense Demand Real-Time
Collaborate with customers and measure impacts
Partner Forecast Metrics
Partner Inputs XML,EDI or Manual
19
Sense Demand Real-Time
Assign accountability and track action items to
ensure compliance
Past Forecast
Sales Forecast
Baseline Forecast
20
Sense Demand Real-Time
Actually predict demand
Easily navigate through user defined hierarchies
Configurable worksheets display the data each
user needs to his job
Color coding provides visibility to exceptions
and areas of interest
Configurable reports, charts and graphs can be
displayed anywhere
21
Shape Demand
New Product Introduction
22
Shape Demand
True Promotional ROI
Analytics Required to Measure Real ROI
Promoted Volume Does Not Provide Complete Picture
23
Shape Demand
Promotion Planning
Fund Management
Sales vs Quota
Promotion Management
Cost Benefits Analysis
24
Shape Demand
Promotion Optimization
View promotion details and lift decomposition in
a single screen
View base, incremental volume, history,
projected, and promotion Gantt in a single screen
25
Respond to Demand
Holistic Supply Planning

• Supply Chain and Distribution Planning
• Product family and item level planning
• Alternate components, resources, processes,
  suppliers, facilities, and ship methods
• End-item substitution
• Critical items and resources aggregate resources
• Bills of distribution and transfer rules
• Circular sourcing, load consolidation, allocation
  rules
• Include customer and supplier facilities

• Manufacturing Planning
• Sequence dependent setups/changeovers
• Simultaneous resources
• Batch resources
• Alternate resources
• Minimum transfer quantities
• Complex, network routings
• By-products and co-products
• Line rates and takt times

26
Respond to Demand
Complete, Best-in-class e-Business Planning
Process Platform

• Make better decisions faster
• Level load
• Choose alternatives
• Make/buy decisions
• Late demand diagnosis
• Out-of-the-box optimization
• Use costs or decision rules
• Enforce due dates or capacity
• Start quickly
• Planners define the problem to solve
• Flexible defaulting
• Reduce planner workload
• Personal queries
• Automated exception management

27
Respond to Demand
Segment The Problem As Needed

• Adapts to your current business model
• Single plan or multiple plans
• Evolve planning model at your own pace
• Re-configure easily by modifying plan options
  instead of re-implementing or re-modeling
• Multiple models can co-exist

Supply chain planning for all Organizations
DPP for all Distribution Centers
MRP Org 1
MRP Org 2
MRP Org 3
MPS for BU 1
MPS for BU 2
MRPOrg 1
MRPOrg 2
MRPOrg 3
MRPOrg 4
MRPOrg 5
MRPOrg 6
28
Drive Operational Excellence
Increase
Decrease
Mfg Labor Productivity 20-50 Capacity
Utilization 30-40 Throughput 20-50 On Time
Delivery 10-20 Carrier Capacity Utilization
5-10
Planning Cycle Time 20-50 Mfg Cycle
Time 50-90 Unplanned Downtime 30-40 Direct
Transportation Cost 10-20 Shipping
Errors 80-100
Sources AMR Research, Alcatel, Boeing, British
Standards Instit
ute,
CIMdata
, HP, Computer Service
-
Support Magazine, CSM Magazine,
eSync
, Ingersoll
-
Rand, Intermec, Lilly, Meta Group,
PwC
ECO
Study, Society for Maintenance Reliability
Professionals,
Telia
Networks, Tompkins
29
What Leaders Do
Sense and Shape Demand
Network, inventory policies
Demand
Production plan, actual orders
Demand
Network Design and Risk Management
Operational Excellence
Built capacity
Target service levels

• Improve demand fulfillment through real-time
  distributed global order promising
• Improve shop floor efficiency with real-time
  production scheduling
• Drive continuous improvement with embedded
  analytics

30
Real Time Order Promising
Improve Demand Fulfillment Through 24x7
Constraint Based 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 on demand 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

31
Real Time Interactive Production Scheduling

• Maximize production throughput
• Optimize your shop floor detect floating
  bottlenecks
• Reduce WIP inventory by rapidly synchronizing
  multi-stage production 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 seamless
  integration with Oracle EBS
• Output best schedule for process (OPM), discrete
  MFG), and semi-conductor (OSFM) manufacturing

32
Embedded Supply Chain Analytics

• Drive continuous improvement
• Enable plan-execute-measure-improve process
• Proactive intelligence when you need it
• Role-based task-oriented dashboards
• Out-of-the-box key performance indicators and
  reports
• Summary to detailed transaction drilldown built
  in
• Drive off a single source of truth
• Global visibility to all performance metrics and
  enterprise targets
• Analysis and comparison of performance trends

33
ltInsert Picture Heregt
Summary
34
Oracles Comprehensive Solution
Complete, best-in-class e-business supply chain
management platform
Trading Partners Customers
Best in class Business Processes
Operational Excellence
Real-Time SOP
Demand driven Adaptive planning
Multi- Enterprise Collaboration
Supply Chain Risk Management
Customer Relationship Management
Customer Fulfillment
Role-based Portals
Network Design
Collaborative Demand Management
Integrated Planning Functions
Demand Sensing And Shaping
Demand Supply Synchronization
Preconfigured Worksheets and Workbenches
Holistic Supply Planning
Promise, Fulfill, Replenish
Real-Time Sales Operations Planning
Predictive Trade Planning Optimization
Channel Field Sales Optimisation
Advanced Supply Chain Planning
Production Execution
Order Capture Logistics Management
Strategic Network Inventory Optimization
Realtime Collaborative Planning
Demand Planning Advanced Forecasting
Products
Platform
Embedded Analytics
BPEL
Application Connectors
Master Data Management
WFL
LegacyERP
SAP
EBS
E1

35
Oracle Advanced Planning
Enables leading edge and transformational
business processes

• Global Supply Network Design and Risk Management
• Demand Driven Adaptive Planning
• Drive Operational Excellence

36
Key Takeaways
Low risk, high value transition to a
best-in-class planning solution

• Proven, best in class 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 and predictive analytics
• Superior architecture - scalable, database-driven
  demand and supply planning common data model
  across all engines, shared with execution
• Provides significant value
• Enables real-time demand driven dynamic supply
  planning
• Enables customers to implement best practices
  such as RT SOP, VMI, CPFR, Supply Chain Risk
  Management, Inventory Postponement
• Proven reductions of inventory and increases in
  forecast accuracy, customer service levels
• Progress at your own pace, transition gradually
• Quickly start with the most important problem
• Integrated platform enables crawl-walk-run
  approach
• Leverage out-of-the-box integration to rapidly
  extend planning footprint

37
(No Transcript)