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Why upgrade from MRP to Advanced Planning
OracleAdvanced Planning
Sid PereraPrincipal Consultant
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• Response 1: Maintain Excess Inventory
• Response 2:Reserve Production Capacity
• Response 3: Expedite Everything!
Traditional Approach
Multi-step planning processes, high latency, limited collaboration
Supply chains built on INVENTORY
Customers Suppliers
Tier 2
Tier 1
MarketingForecast
SalesForecast
MfgForecast
DistributionPlans
ProductionPlans
ManufacturingPlans
t = weeks
?
Demand PlanningProcess
Supply PlanningProcess
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Build your supply chain on INFORMATION not inventory
• Enable closed loop
planning processesacross your value chain
• Provide total supply chainvisibility
• Make better decisions• React immediately to
changes in supply chain
Move To A More Competitive Model
E-Business planning solution: zero latency, real-time collaboration
Internet
Customers Suppliers
Tier 2
Tier 1
Marketingforecast
Salesforecast
Mfgforecast
Single holisticplan
t = hours
Consensusforecast
Automatedexceptions
PortalPortal
Collaborativedemand plan
Collaborativesupply plan
Automatedexceptions
Automatedexceptions
Collaborative PlanningProcess
Demand PlanningProcess
Supply PlanningProcess
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4 Copyright © Oracle Corporation, 2003. All rights reserved.
Our Solution
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Oracle Advanced Planning
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 OperationsPlanning
SC Exception Management CP
Develop
MarketSellOrder PlanProcure
Make
Fulfill
Service
MaintainFinance
HR
Projects
All Product,Customer,& Supplier Information
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
Complete e-business planning solution
* Coming in 11i.10 ** Coming in 11i.10+
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Oracle Advanced Planning
● 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
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Oracle Advanced Planning
● 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:
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WHERE TO START?
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… 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
Oracle Applications(10.7, 11.0, 11i)
Unconstrained
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Implementing Unconstrained ASCP
Upgrade to 11i (optional)0 Upgrade to 11i (mandatory)0
Discrete 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!
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What our customers say …
Mykrolis30 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 accurateplans, 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 guessworkout 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 ofBusiness Operations, Primarion
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STRONGER FOUNDATION
FOR THE FUTURE
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Two Growth Paths
1. Improve the quality ofyour plans
• Constrained planning
• Optimized planning
2. Take advantage ofadditional functionality
• Demand Planning
• Collaborative Planning• Global Order Promising
• Inventory Optimization
MRP APS Common Infrastructure
ASCP
Oracle Applications(10.7, 11.0, 11i)
Unconstrained
Use an incremental approach to extend your foundation
ASCP = Advanced Supply Chain Planning
Constrained
Optimized
DemandPlanning
CollaborativePlanning
InventoryOptimization
Global Order Promising
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1. Improve the quality of your plans
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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: maximizeprofit, inventory turns, and customerservice
– Out-of-the-box optimization
– Priority based decisions
– Drag-and-drop rescheduling
● Improve resource scheduling – Schedule simultaneous resources
– Batch resources
– Minimum transfer quantities
MRP APS Common Infrastructure
ASCP
Oracle Applications(10.7, 11.0, 11i)
Unconstrained
Constrained
Optimized
For planners, not programmers
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What our customers say …
Tube InvestmentReduced 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 onsuppliers' 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 hassignificantly improved our response time." -- Clair Walizer,Senior Developer and Analyst, Canon Virginia, Inc
Sony Semiconductor Improved delivery performance, reduced planning cycle time from multiple weeks to
days, increased productivity, improved plan quality with holistic, integrated globalplans for the entire supply chain, real-time integration between planning and execution
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2. Take advantage of additional functionality
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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
MRP APS Common Infrastructure
ASCP
Oracle Applications(10.7, 11.0, 11i)
Unconstrained
Constrained
Optimized
DemandPlanning
CollaborativePlanning
InventoryOptimization
Global Order Promising
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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 keycustomers
– Re-schedule and re-sequence your backlog
Promise more accurate orders with zero downtime, 24x7
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Multi-tier Collaborative Planning
● Plan your extended supply chain
– Share forecasts and supply commitswith customers 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 viaworkflow
Full visibility and synchronization across extended supply chain
ContractManufacturer
You Supplier Customer
Run plan
Optional
Forecast
‘memory’
Supply commit
‘boards’
Supply commit
‘memory’
Demand
‘boards’
Run plan
Demand‘systems’
Supplyforecast
Consensusforecast
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VMI and Consigned InventoryWith suppliers and customers
YouSupplier Customer
Receive items
Pay on receipt/use
Checkinventorystatus
Ship items
VMI Agreement(with supplier)
VMI AgreementVMI Agreement -
Receive items
Pay onreceipt/use
Ship items
VMI Agreement(with customer)
Sendconsumptionadvice
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25 Copyright © Oracle Corporation, 2003. All rights reserved.
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
Supplier short of
commitment
Your forecastis short of
commitment
Supplier commits
more capacity
Customer loweredforecast
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What our customers say …
IntersilProjected 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 ultimatelymakes us a better supplier to our customers." -- DonCross, 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 beenable to reduce our inventory by more than a million dollars a month just because we nowknow where it is. We now have the ability to see when the product really will be available sowe 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 indemand 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." -- GarySchliekelman, Director of Planning, Alcatel e-Business Networking Division
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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
Take Advantage of Seamless IntegrationIntegrated demand, inventory, and supply planning solution
Suppliers Customers
Forecast
Customer forecast
Order forecast
Constrainedplans
Supplier capacity
Time-phased safety stocks
Forecast anddemand variability
Supplycommits
Order forecast
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Scalable and Open Architecture
● Runs against all versions ofOracle E-Business Suite
– Supports 10.7, 11.0, 11i
– Can be deployed in
distributed mode
● Standards based
– Deploy against any otherERP 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
API
S
Trading partners Internal Users
Internet
Oracle 10.7, 11.0, 11i
Legacy Systems
XMLEDIFlat file
Order Promising Engine
Portals
ExpressOLAP
KPIs Workflows Plans
Open and Scalable
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Summary
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Move from black and white …Multi-step, high latency, limited collaboration
Customers Suppliers
Tier 2
Tier 1
Distribution
Plans
Production
Plans
Manufacturing
Plans
t = weeks
Supply Planning Process
?
Marketing
Forecast
SalesForecast
ManufacturingForecast
Demand Planning Process
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… to Color: Oracle Advanced PlanningE-Business planning solution: zero latency, real-time collaboration
Internet
Customers Suppliers
Tier 2
Tier 1
Marketing
Forecast
SalesForecast
ManufacturingForecast
Single HolisticPlan
t = hours
Demand Planning Process Supply Planning Process
ConsensusForecast
Automatedexceptions
PortalPortal
Collaborativedemand plan
Collaborativesupply plan Automated
exceptionsAutomatedexceptions
Collaborative Planning Process
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33 Copyright © Oracle Corporation, 2003. All rights reserved.
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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AQ&Q U E S T I O N S
A N S W E R S
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