Oracle Advanced Planning - Twin Cities Manufacturing...

Why upgrade from MRP to Advanced Planning

Oracle Advanced Planning

Sid PereraPrincipal Consultant

• Response 1: Maintain Excess Inventory

• Response 2: Reserve Production Capacity

• Response 3: Expedite Everything!

Traditional ApproachMulti-step planning processes, high latency, limited collaboration

Supply chains built on INVENTORY

Customers Suppliers

Tier 2

Tier 1

Marketing Forecast

Sales Forecast

MfgForecast

Distribution Plans

Production Plans

ManufacturingPlans

t = weeks?

Demand Planning Process

Supply Planning Process

Build your supply chain on INFORMATION not inventory

• Enable closed loop planning processes across your value chain

• Provide total supply chain visibility

• Make better decisions

• React immediately to changes in supply chain

Move To A More Competitive ModelE-Business planning solution: zero latency, real-time collaboration

Internet

Customers Suppliers

Tier 2

Tier 1

Marketing forecast

Sales forecast

Mfgforecast

Single holistic plan

t = hours

Consensus forecast

Automatedexceptions

PortalPortal

Collaborativedemand plan

Collaborativesupply plan

Automatedexceptions

Automatedexceptions

Collaborative Planning Process



4 Copyright © Oracle Corporation, 2003. All rights reserved.

Our Solution


Supply Chain Intelligence

Demand Planning

Inventory Optimization

Supply Chain and Manufacturing Planning

Manufacturing Scheduling

Transportation Planning*

Collaborative Planning

SCI

DP

IO

Deployment Planning** ASCP

Global Order Promising GOP

MS

TP

CP

ASCP

Sales and Operations Planning

SC Exception Management CP

DevelopMarketSellOrderPlan

ProcureMake

Fulfill

Service

MaintainFinance HR

Projects

All Product,Customer,& SupplierInformation From short-term to long-term

From

det

ail t

o su

mm

ary

Complete e-business planning solution

* Coming in 11i.10 ** Coming in 11i.10+


● Improve forecast accuracy– Collaborative demand planning with customers

● Increase visibility and reduce shortages– Collaborative supply planning with suppliers– Collaborate across multiple tiers

● Reduce inventory carrying cost– Vendor managed inventory– Consigned inventory

● Analyze demand and supply fluctuations– Waterfall analysis– Liability analysis

● React quickly to supply chain events – Supply chain exception management– Global fulfillment visibility

Key capabilities



● Improve delivery performance up to 35%

● Reduce inventory levels up to 25%

● Improve forecast accuracy up to 35%

● Reduce planning cycle time to hours

Enables you to:


WHERE TO START?


From MRP …

● Unconstrained material and resource planning

● Basic forecasting

● Basic available to promise

● No collaboration

No path forward

MRP

Oracle Applications(10.7, 11.0, 11i)

… to Unconstrained ASCP

● Improve planner productivity– New productivity enhancing UI– Planner collaboration

● Reduce your planning cycle time from months to hours

– Holistic planning– Improved scalability and performance

● Make better decisions faster– Improved exception resolution

● Reduce non-value added costs– Workflow based exceptions

● Drive continuous improvement– Integrated business intelligence

Foundation for future growth– Common Infrastructure

Same effort to deploy as MRP – Reuse all existing setup!

ASCP = Advanced Supply Chain Planning

MRP APS Common Infrastructure

ASCP


Unconstrained


Implementing Unconstrained ASCP

Upgrade to 11i (optional)0 Upgrade to 11i (mandatory)0Discrete Manufacturing Process Manufacturing

Install1 ▪ Install ASCP using the 11i rapid install process▪ Decide on deployment (one instance, distributed)

Setup2 ▪ Link Planning instance to ERP source instance

Collect3 ▪ Run data collection process to collect ERP data for planning▪ Collect from one or more source instances

Plan4 ▪ Define plan and plan options▪ Run plan

Analyze5 ▪ Launch Planner Workbench to analyze plans

Same effort to deploy as MRP – Reuse all existing setup!


What our customers say …Mykrolis

30 day implementation; improved on-time delivery from 70% to 90%"The Oracle solution provides our planners with instant access to global information, and

simulation tools for reacting to changing market conditions. The result is more accurate plans, fewer errors, and improved bottom line service to our customers." --Mike Dapcic, CIO

American Power Conversion"For the first time, we could set up a clear sourcing network, set minimum and maximum

levels, and drive internal replenishment based on demand. This took a lot of the guesswork out of manufacturing planning and greatly reduced our inventory levels."--Lisa Sipe, CIO, American Power Conversion

Primarion"Oracle Advanced Planning gives us more time to run our day to day business operations.

Instead of dedicating an internal team to generate updated inputs and running manual tools, we simply generate one plan from which to execute." -- Keith Palevsky, Director of Business Operations, Primarion


STRONGER FOUNDATIONFOR THE FUTURE

Two Growth Paths

1. Improve the quality of your plans

• Constrained planning• Optimized planning

2. Take advantage of additional functionality

• Demand Planning• Collaborative Planning• Global Order Promising• Inventory Optimization


ASCP


Unconstrained

Use an incremental approach to extend your foundation

ASCP = Advanced Supply Chain Planning

Constrained

Optimized

DemandPlanning

CollaborativePlanning

InventoryOptimization

Global OrderPromising


1. Improve the quality of your plans

Constrained and Optimized Plans

● Improve plan quality – Automatically recommend alternative

suppliers, components, resources, facilities, and routings

– Generate feasible plans that respect your material 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


ASCP


Unconstrained

Constrained

Optimized

For planners, not programmers


What our customers say …Tube Investment

Reduced inventories by 20%, increased market share from 50% to 80%“The most exciting feature of the system to a manufacturer is constraint-based planning.

Oracle provides the ability to plan, including resource and material constraints, based on suppliers' inventories and capacities." -- Mr. V. A. Raghu, Managing Director, Tube Investments Ltd.

Canon VirginiaReplaced i2 and cut planning cycles from weekly to daily"With Oracle E-Business Suite 11i, we have moved from weekly to daily planning, which has

significantly improved our response time." -- Clair Walizer, Senior Developer and Analyst, Canon Virginia, Inc

Sony SemiconductorImproved delivery performance, reduced planning cycle time from multiple weeks to

days, increased productivity, improved plan quality with holistic, integrated global plans for the entire supply chain, real-time integration between planning and execution


2. Take advantage of additional functionality


Expand into …

● Demand Planning– Consensus forecasting

● Inventory Optimization– Postponement and risk pooling

● Global Order Promising– Available and capable to

promise

● Collaborative Planning– Collaborate with your

customers and suppliers


ASCP


Unconstrained

Constrained

Optimized

DemandPlanning

CollaborativePlanning

InventoryOptimization

Global OrderPromising


Demand Planning

● Compare and consolidate disparate forecasts

– Sales, Marketing, Manufacturing, Customers, Point of Sale (in units or $$)

– Multi-dimensional OLAP to allocate and rollup

● Improve forecast accuracy– Better statistical forecasts– Forecast planning percentages for models and

options– Get visibility to customer demand changes

● Improve demand planning cycle time– Continuous demand planning process– Automated internal collaboration

● Improve sales promotion planning– Forecasting integrated with promotion planning– Measure effectiveness

Drive to accurate consensus forecast

Internet

Customers

Marketing forecast

Sales forecast

Mfgforecast

Consensus forecast

Portal

Collaborativedemand plan Automated

exceptions


Inventory Optimization

● Reduce inventory without sacrificing customer 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

Manage to uncertainty, reduce inventory, improve customer service

Suppliers

ContractManufacturers

FinalAssembly

Central Distribution Centers

Regional Distribution Centers

Customers

Without Postponement With Postponement


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

● 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

Promise more accurate orders with zero downtime, 24x7

Multi-tier Collaborative Planning

● Plan your extended supply chain

– Share forecasts and supply commits with customers and suppliers

– Get visibility to supplier capacity– Reallocate key components – Make alternate sourcing decisions

● Reduce inventory cost and improve fulfillment

– Suppliers manage your inventory– Manage your customers’ inventory

● React quickly to supply chain exceptions

– Waterfall analysis– User-configurable exceptions– Automated exception handling via

workflow

Full visibility and synchronization across extended supply chain

ContractManufacturer

You SupplierCustomer

Run plan

Optional

Forecast‘memory’

Supply commit‘boards’

Supply commit‘memory’

Demand‘boards’

Run plan

Demand‘systems’

Supplyforecast

Consensusforecast


VMI and Consigned InventoryWith suppliers and customers

YouSupplierCustomer

Receive items

Pay on receipt/use

Check inventory status

Ship items

VMI Agreement(with supplier)

VMI AgreementVMI Agreement -

Receive items

Pay on receipt/use

Ship items

VMI Agreement(with customer)

Send consumption advice


Supply Chain Exception Management

What is the problem?

Planningrun

Next Planningrun

! !!!

Highlight disruptions when they occur

What is the impact?

How do I resolve it?

How well did I do?

Custom and seeded exceptionsConfigurable thresholds & priorities

Demand-supply allocation,Simulation, Workflow

Business intelligence

Customer order impact analysis via supply chain pegging

Suppliershort of

commitment

Your forecastis short of

commitment

Suppliercommits

more capacity

Customerloweredforecast

What our customers say …Intersil

Projected savings $13M over 5 years; 30% reduction in inventory costs"Oracle Advanced Planning has taken Intersil's business processes to the next level,

allowing us to reduce the time and cost of our demand planning efforts, which ultimately makes us a better supplier to our customers." -- Don Cross, director of Operations Planning and Customer Service, Intersil Corporation

Knowles ElectronicsReduced inventory $1Million/month“We now have complete visibility into the supply chain and all the inventories. We've been

able to reduce our inventory by more than a million dollars a month just because we now know where it is. We now have the ability to see when the product really will be available so we can give the customers valid promised ship dates. " -- Randy Kjell, Director of IT, Knowles Electronics

Alcatel50% inventory reduction leading to savings of $15M/year; 100%

outsourced"Because of the visibility we now have across our virtual supply chain, we have been able

to significantly reduce inventory liability. Instantly sharing information about changes in demand or supply with our outsourcing partners gives us all the most precise view of where bottlenecks may occur. To me, this is a real competitive advantage." -- Gary Schliekelman, Director of Planning, Alcatel e-Business Networking Division


INTEGRATED, SCALABLE, and OPEN

Supply Chain and Manufacturing Planning

Collaborative Planning

Demand Planning DP

Inventory Optimization IO

Global Order Promising GOP

CP

ASCP

Sales and Operations Planning

Take Advantage of Seamless IntegrationIntegrated demand, inventory, and supply planning solution

Suppliers Customers

Forecast

Customerforecast

Orderforecast

Constrained plans

Supplier capacity

Time-phased safety stocks

Forecast and demand variability

Supplycommits

Orderforecast

Scalable and Open Architecture

● Runs against all versions of Oracle E-Business Suite

– Supports 10.7, 11.0, 11i– Can be deployed in

distributed mode

● Standards based– Deploy against any other

ERP or legacy system– XML, EDI, and flat file formats

● Reliable – All plan information resides in

the database– Hot backup and recovery

● Enterprise and trading partner portals

Advanced Planning

APIS

Trading partners Internal Users

Internet

Oracle 10.7, 11.0, 11i

Legacy Systems

XMLEDIFlat file

Order Promising Engine

Portals

Express OLAP

KPIs Workflows Plans

Open and Scalable


Summary

Move from black and white …Multi-step, high latency, limited collaboration

Customers Suppliers

Tier 2

Tier 1

Distribution Plans

Production Plans

ManufacturingPlans

t = weeks


?

Marketing Forecast

Sales Forecast

ManufacturingForecast


… to Color: Oracle Advanced PlanningE-Business planning solution: zero latency, real-time collaboration

Internet

Customers Suppliers

Tier 2

Tier 1

Marketing Forecast

Sales Forecast

ManufacturingForecast

Single Holistic Plan

t = hours

Demand Planning Process Supply Planning Process

Consensus Forecast

Automatedexceptions

PortalPortal

Collaborativedemand plan

Collaborativesupply plan Automated

exceptionsAutomatedexceptions

Collaborative Planning Process


Why Upgrade to Advanced Planning

● Achieve significant value with a better planning system– Improve customer service up to 35%– Reduce inventory up to 50%– Improve forecast up to 35%– Reduce planning cycle time to hours

● 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

● Leverage your existing Oracle ERP and MRP investment– You’ve already done most of the work by setting up and maintaining the

core business data elements

Low risk, high value transition to a better planning system


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