Giving Yourself Options Using Oracle Assemble To Order ATO

1
Giving Yourself Options Using Oracle Assemble
To Order (ATO)

• Bob Collins, CFPIM, CIRM
• SSI North America
• Chicago, IL
• August 15, 2003

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Agenda

• Why consider ATO?
• Advantages to ATO?
• Example of Oracle ATO

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ATO

• A production environment where a good or service
  can be assembled after receipt of a customers
  order. The key components . . . used in the
  assembly or finishing process are planned and
  usually stocked in anticipation of a customer
  order. Receipt of an order initiates assembly of
  the customized product. This strategy is useful
  where a large number of end products (based on
  the selection of options and accessories) can be
  assembled from common components.
• - APICS Online Dictionary (10th Edition)

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ATO Bills and . . .

• Modular Bills
• Planning Bills
• PTO Bills (Oracle)
• Hybrid Bills (Oracle)

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Why consider ATO?

• Unrealistic/impossible to plan and stock EVERY
  possible end item
• Customer Delivery lead time vs. manufacturing
  lead time

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Stock issue

• When options are considered, there may be
  hundreds of thousands of end items
• Potentially millions of dollars of inventory
• Many items are never ordered
• Space problems, maintenance issues

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Lead Time issue

• Customer delivery lead time 4 weeks
• Purchase materials, fabricate and assemble 28
  weeks!

Total Lead Time
Customer Delivery Lead Time
8
MTS MTO
Total Lead Time
MTS
Customer Delivery Lead Time
Total Lead Time
MTO
Customer Delivery Lead Time
9
ATO
Customer Delivery Lead Time
Total Lead Time
Final Assembly Lead Time
Subassembly Lead Time
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Advantages to ATO

• Better response time
• Reduced costs
• Lower inventory
• Reduced number of master scheduled and forecast
  items
• Faster and fewer errors in order entry

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Example Computer
Computer Options
Processor(1 of 8)
RAM(1 of 4)
Hard Drive (1 of 6)
Graphics Card(1 of 5)
Optical Drive (1 of 6)
Monitor(1 of 6)
Speakers(1 of 3)
Printers(1 of 7)
Modem(1 of 3)
Ethernet Card(1 of 3)
Software package(1 of 5)
8 x 4 x 6 x 5 x 6 x 3 x 7 x 6 x 3 x 3 x 5
32,659,200 end items!
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Maintenance Nightmare?

• 8 x 4 x 6 x 5 x 6 x 3 x 7 x 6 x 3 x 3 x 5
  32,659,200 end items
• OR
• 8 4 6 5 6 3 7 6 3 3 5 56
  items at the option level

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More advantages

• Fewer Bills of Materials
• Less BOM maintenance
• More efficient order entry
• Forecast/plan at level below the end item
• Helps isolate opportunities for standardizing and
  changing the manufacturing process.

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Example
Level
0
ATO Model
Pentium 4 Family
ATO Option Class
Processors
Hard Drives
Monitors
1
1.4 GB
2.1 GB
17 Flat
21 Super
2
.30
.70
.40
.60
ATO Items
60 GB
80 GB
120 GB
Subassemblies Components
.20
.60
.20
3
15
Planning Percentages
16
Optional/Mutually Exclusive
17
Optional/Mutually Exclusive
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Configurator
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Configurator

• When the order is placed, Order Entry picks the
  options the customer wants
• Rules to guide Order Entry
• Can reuse existing numbers if profile option is
  set

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Configurator Rules

• E.g., Automotive Manufacturer
• IF air conditioning ordered for vehicle
• THEN must include tinted windshield

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Configured Bill ()
Level
0
ATO Model
Pentium 4 Family1234
ATO Option Class
Processors
Hard Drives
Monitors
1
80 GB
21 Super
2.1 GB
2
ATO Items
.60
.70
.60
Subassemblies Components
3
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Creation of Configured Item

• Creation of configuration bill of material based
  on the model bill of material
• Creation of configuration routing based on the
  model routing
• Link the configuration item to the sale order

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Creation of Configured Item

• Kick off the configuration item workflow process,
  which completes the following
• Lead time calculation for the configuration item
  (discrete manufacturing items only)
• Supply Chain cost rollup for the configuration
  item

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Affect on Forecast

• Forecast at the Model level, using planning
  percentages
• Configured items will consume the forecast for
  the Model

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Summary

• Oracle Applications supports ATO (and PTO CTO)
  with a range of features in order entry, demand
  forecasting, master scheduling, production,
  shipping and financial accounting.

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Thank you!

• Bob Collins, CFPIM, CIRM
• SSI North America
• Chicago, IL
• Bob.collins_at_us.ssiworldwide.com
• August 15, 2003