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FY09 Commercial Planning - SCMKeith IpSCM Applications Solutions Consulting

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Agenda

• Where we are• Competition• Where we should go• Recommendations

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Product Solutions Management TeamProduct Solutions Management TeamHCMHCM SCMSCM CRMCRM

SCSSCS

John Hui(32)

MikeHodgson

(45)

??(64)

ShravMalkani

(60)

Sally Li

(59)

DavidBarkess

(54)

FMSFMS ACE / ARCHACE / ARCH

Prod MgtProd Mgt

Matt Van Rensburg

(7)

Jeff OlsonJeff Olson

ANZANZ Kristy DurstonKristy Durston KP LokeKP Loke Wayne HoughtonWayne Houghton Chris DownieChris Downie Adam KrebetAdam Krebet

ASEANASEAN Jackie GohJackie Goh Christo SardjonoChristo Sardjono Lisa tayLisa tay TBHTBH Alvin LeungAlvin Leung

INDIAINDIA Suryanaran. IyerSuryanaran. Iyer Sujit SahuSujit Sahu Samik RoySamik Roy Aditya Bhattachar.Aditya Bhattachar. Anurag DubeyAnurag Dubey

G.CHINAG.CHINA(Yu Sicheng)(Yu Sicheng)

Oliver ChenOliver Chen Keith IpKeith Ip Binggin HuangBinggin Huang Joyce TanJoyce Tan Charles ZhangCharles Zhang

KOREAKOREA HyeSoo ChoHyeSoo Cho KangHyoug LeeKangHyoug Lee Seong HwanSeong Hwan Young Hoon KimYoung Hoon Kim JinYeun ParkJinYeun Park

IndustryIndustrySpecialistSpecialist

Paul Paul PengPeng

?

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FY09 GC SCM SC Organization ChartKeith Ip (HK)

Direcotr, SCM Products SolutionsGreater China

1 + 4 (Mgr) + 16 (SC)Total: 21 inclusive

Hung-Chang Fu (TW)SCM SC Director

TaiwanAPSHT

Alex Tseng (TW)SCM SC Mgr

APSHT

Jonah Tsai (TW)Principal SC

OTM, ALMLSP, Utility, Chemical

Alvon Cheng (TW)Snr SC

APS, Demantra, PSHT

Virginia Wu (TW)Principal SC

ODM, Agile PLMHT

David Hsu (TW)Snr SC

Discrete MFG, Costing, SchedulingHT, Industrial MFG, GEH

Daniel Gao (SH)SCM SC MgrCentral China

PO, ALM, EDGE, PIMEPC, Auto, CPG, Telco

Andy Chen (SH)Principal SC

APS, Discrete MFGHT, CPG

Feng Lin (SH)Snr SC

Process MFGMetal, CPG (Process)

TBH

TBH (FY09)

TBH (FY09)

Jon Li (BJ)SCM SC MgrNorth China

ALMUtility, Asset Intensive

Kevin Zhang (BJ)Principal SC

ALM, PO, INVGEH, Asset Intensive

Byron Li (BJ)Snr SC

Discrete MFG, Agile PLMA&D, HT

Lucy Cui (BJ)Principal SC

Process MFG, DemantraProcess, CPG, Telco

Vivian He (BJ)Snr SC

Demantra, SNO, OTMCPG, Chemical, LSP

Gary Li (ShenYang)Snr SC

ERPGrowth Cities

TBH (FY09)

Rex Ma (HK)Snr SC

ALM, POGEH, T&T

Mike Luk (HK)Snr SC

Agile PLM, Process MFG, PIMF&B, HT

Frank Tang (HK & SH)Principal SC

OTMLSP, Corporate Shippers

TBH (FY09)

Owen Tang (GZ)Principal SC

ALM, PO, Process MFGAsset Intensive, T&T, CPG

Chris Zhang (GZ)Snr SC

APS, Agile PLMHT

TBH (FY09)

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Now (from IDC)

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Now and FutureIDC Apps Prediction for PRC

0.000

500.000

1000.000

1500.000

2000.000

2500.000

2006

2007

2008

2009

2010

2011

2012

TIME

RE

V (

US

Mil

) Product Supply ChainApplications

ERM Applications

CRM Applications

17% CAGR

20% CAGR20% CAGR

15% CAGR15% CAGR

20% CAGR20% CAGR

Assuming Oracle expects 30+% growth……

Gen more demand, win more over SAP, in areas where they suck, Penetrate more in Growth Cities

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What SAP did when entering China?• Enter China in 1991, SAP China established

in 1995, Key wins of Lenovo and Haier in 1998

• Lighthouse Accounts – Invest in working with leading companies by industries (Investing in Sinopec for 3-4 years without any rev before signing a 10M deal)

• Heavily invest in partners – Granting 30% margin to partners

• Create Strong Eco-system in key industries – Oil & Gas, Chemical, Tobacco, Traditional Mfg, Metal, Auto, etc…

• Strong Partner Eco-system• Build up the Brand of Industry Solutions

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SAP Today• A large pool of install base of upsell add-on license• Enough funding for other smaller companies as well as dropping

price when competing against us• Leverage their brand to sell more ERP

• With our brand legacy, it takes time for learning curve in order to penetrate into SAP install base

• SAP is building their specialization teams (PLM, SRM, EPM)• SAP is pushing their +1 Minimize Oracle’s Differntiators • Time Window is closing

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ERP Landscape in China – Winning ERP with EDGE/Industry Solutions

Time

Ad

op

tio

n

MNC

Hi Tec

h

Mid

Siz

e

(loca

l FIN

)

BanksEm

ergin

g

Indust

ries

Govern

men

t

SASAC

Mid

Mar

ket

ERP

+

EDGE / Industry Solutions ERP Replacement

EDGE / Industry Solutions

SAP IB

Opportunity for CMRL

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Oracle’s Strength• The Oracle brand

• Acquisition strategy / Best of breed solutions• Leading “+1” solution differentiators (Agile, AutoVue, Stellent,

Demantra, Projects portfolio, EPM, MDM, etc.)

• Talented People

12 1212

Shift to Value Chain Orientation

Administrative InfrastructureHR

Su

pp

ort

ing

Acti

vit

ies

Su

pp

ort

ing

Acti

vit

ies

Valu

e C

reati

ng

A

cti

vit

ies

Valu

e C

reati

ng

A

cti

vit

ies

INNOVATIONINNOVATIONSUPPLIER RELATIONSHIP MGTSUPPLIER RELATIONSHIP MGT

Demand Chain

Demand Chain

Supply ChainSupply ChainDesign ChainDesign Chain

Design Chain Design Chain

Supply Chain Supply Chain Demand Chain Demand Chain

Convergence of Chains - Demand, Supply, Design Multi-enterprise – Collaboration, Orchestration, Flexible Information-Centric – Visibility, Predictive, Real-time

Convergence of Chains - Demand, Supply, Design Multi-enterprise – Collaboration, Orchestration, Flexible Information-Centric – Visibility, Predictive, Real-time

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How the new R12.1 products compliment this strategy

• Advanced Planning Command Center• Elevates supply chain planning information to a business decision making

level by combining cross-domain planning analytics within the context of business scenarios

• Manufacturing Operations Center• Delivers an integrated view of manufacturing status and performance by

combining ERP and real-time plant floor information, and using this for extensible analytics

• Demand Signal Repository• Creates a shared and unified view of real-time demand information between

parties in the value chain to drive closed-loop decision making• Service Parts Planning

• Enables a responsive service supply chain and increases the profitability of after market service, helping OEM’s extend their value chain

• Deal Management• Optimizes the effect of price-driven demand shaping

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Service Supply Chain

Regional DCsServicetechnicians

Central DC

Repair depot

Customers

Supplier (Repair)

Supplier (New Buy)

On-hand Consigned

Repaired In repair

Material flow of good spares

Material flow of defective spares

Must manage both forward and reversed material flows

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Service Industry

• Service is becoming a main profit driver even in manufacturing companies• Desire to move from cost center to profit center• Service parts have much higher margin than finished goods

• Service as a competitive differentiator - Better customer retention• Finished goods have become commoditized

• Hi-Tech, Travel/Transportation & Aerospace & Defense (A&D) have unique requirements in terms of complex parts planning

• Repairs are being outsourced• Rotables and serialization present planning complexities

• Interplay between parts planning and execution increasingly becoming important

• Logistics Service Provider (LSP) is a growing market especially with ‘End to End’ providers

• Significant amounts of money tied up in spares inventories• Initiatives to reduce inventories while maintaining / improving service

Trends

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• Centralized• Few locations• Few products• Planners manage few

products• Shorter lead times• Few suppliers • Sales forecast• Deterministic• Build or buy supply

• Decentralized• Many locations• Many service parts• Planners manage many parts• Longer lead times• Many suppliers• Myriad of demands• Probabilistic• Move, repair, or new buy

Why Service requires different approaches and systems

MANUFACTURING SERVICE

Two Different Worlds

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• Forecasting• High SKU counts, low volume• Intermittent demand• Product life cycle events

• New product introductions• End of part life / service life, supersession

• Inventory, replenishment, and distribution planning• Dynamic redistribution of inventory as customer demand shifts• Returns: part condition• Part supersession and complex part chains• Aggressive service level agreements and budgets

• Service level and response time key in balancing inventory• Trade off service levels and budget

Service IndustryChallenges in managing the service supply chain

Oracle’s Service Parts Planning Solution

Available with 12.FP: Demantra, SPP, GOP, CP, IO, SNO

• SPP – Service Parts Planning within Advanced Planning Suite• Key features supported:

• Demand planning and replenishment / distribution from a single Workbench• Returns / repairs / reverse logistics / dual sourcing of new buy & repair• Part condition, supersession, failure rates, repair lead time, and criticality

support• Auto-release new buy and repair recommendations to Spares Management and

Depot Repair

• Key environments:• Works well for customers that are dealing more with complex reverse logistics

and repair processes

• Solution modeling for “part conditions” not required:• Use same part numbers to represent “good” and “bad” parts (part condition

supported)

The better news: we’ll have an even better solution available soon !

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Coming in 12.FP – Service Parts Planning

• Global parts inventory visibility across all service organizations

• Out-of-the-box integration with Oracle Spares Management and Oracle Depot Repair

• Release depot repair orders, reschedules, and transfers

• Release spares management new buy purchase orders, repair orders, and transfers

Out-of-the-box integration with Spares Management and Depot Repair

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Service Parts Planning SolutionSelling into various Industries

• Distribution Only / High Volumes• Requires forecasting and distribution / replenishment• Support dealer network

• Challenges• Forecasting

• High SKU counts, low volume, intermittent / seasonal• Forecasting at the Dealer level

• Inventory, replenishment, and distribution planning• Distribution to dealer network to address sporadic / erratic ordering

patterns• Part supersession

• Position TODAY: Demantra, ASCP-DRP, GOP• No reverse logistics / repair element; Dealers modeled as Orgs

• Where we’ve won: General Parts

Service Industry ChallengesAutomotive / Distribution-only

• Aftermarket spares support for customer equipment• Returns / Repairs / Reverse Logistics

• Dual sourcing of new and repair

• Challenges• Forecasting

• High SKU counts, low volume, failure rates – install base• Inventory, replenishment, and distribution planning

• Dynamic redistribution of inventory as customer demand shifts• Returns: part condition, part supersession and complex part chains• Aggressive service level agreements and budgets / trade offs

• Position TODAY: Demantra, ASCP-DRP, GOP• Model good and bad parts as different items.

• Where we’ve won:

Service Industry ChallengesHeavy Equipment / Industrial Manufacturing

• Aftermarket spares support for customer equipment• Returns / Repairs / Reverse Logistics

• Dual sourcing of new and repair

• Challenges• Forecasting

• Very short product life cycles

• Inventory, replenishment, and distribution planning• Part supersession, returns, part conditions, complex part chains• Aggressive service level agreements and budgets / trade offs

• Position TODAY: Demantra, ASCP-DRP, GOP• Model good and bad parts as different items

• Where we’ve won:

Service Industry ChallengesHigh Technology

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Current Competitors• SAP

• APO• Recently released a service parts specific solution - unproven• Partnership with MCA

• Servigistics• Good presence and slick product• Good marketing• Strong in distribution, reverse logistics, repair forecasting

• MCA (Morris Cohen Associates)• Strong in Aerospace and Defense• Good algorithms and approach

• Baxter Planning Systems• Outsourcing / hosted model for SPP and SCP• Not aggressive in marketplace / weak presence• Conference room pilot / consulting approach

• Xelus / Click Commerce• Acquired twice in past few years, uncertain future• Current customers being replaced by Servigistics and others

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Market Review

SAP = Caution

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Sample Service Parts Planning Customers

Industrial

Manufacturing

Travel & Transportation

A&D

Hi tech

United Space

Alliance

Siberian Airlines

Aircraft Engines

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Manufacturing Manufacturing

Comms & UtilitiesComms & Utilities

Aerospace & DefenseAerospace & Defense

Hi TechHi Tech

A Few Service Management Customers …

AutomotiveAutomotive

Office Equipment Office Equipment

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Oracle Service Parts PlanningAdditional Information

• Deployment and Integrations• Part of Oracle APS and can be deployed as follows:

• Separate APS 12.1 instance - fully integrated with EBS R12 and EBS R11i10*• Standalone - integrated with other ERPs through legacy integration* • Single instance - combined EBS+APS instance, when EBS 12.1 is available

later this year• Availability:

• GA now as a part of R12.1 APS Feature Pack – deployable on a separate APS 12.1 instance

• Controlled Availability process in effect to help track initial sales• Pricing:

• $1750/$M of Cost of Goods Sold (COGS)• More Information:

• www.oracle.com• apps.oraclecorp.com• www-apps.us.oracle.com/aps

* - Available soon