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Bob Collins, CFPIM, CIRM


SSI North America
Chicago, IL
August 15, 2003
Agenda
( Why consider ATO?
( Advantages to ATO?
( Example of Oracle ATO
ATO ± Assemble-to-Order
( A production environment where a good or
service can be assembled after receipt of a
customer¶s 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)
ATO Bills and . . .
( Modular Bills
( Planning Bills
( PTO Bills (Oracle)
( Hybrid Bills (Oracle)
Why consider ATO?
( Options make planning and stocking
EVERY possible end item unrealistic
to impossible
( Difference between customer
delivery lead time vs. procurement
and manufacturing lead time
Stock issue
( When options are considered, there
may be hundreds of thousands of
end items
( Potentially millions of dollars of
inventory
( Many potential configurations are
never ordered
( Space problems, maintenance issues
Lead Time issue
( Customer delivery lead time = 4
weeks
( Procure materials, fabricate and
assemble ± 28 weeks!

Total Lead Time

Customer
Delivery
Lead Time
MTS ± MTO
Total Lead Time
MTS

Customer Delivery
Lead Time

Total Lead Time


MTO
Customer Delivery
Lead Time
ATO

Customer Delivery
Lead Time
Total Lead Time

Subassembly Lead Time Final


Assembly
Lead Time
Inventory Implications
MTS MTO
Inventory End Items End Items

Raw Materials Raw Materials Inventory

Order placed
ATO and Inventory
End Items

Order placed
Inventory Sub
assemblies

Raw Materials
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
Example: Computer
Computer
Options

Processor RAM Hard Drive Graphics Card


(1 of 8) (1 of 4) (1 of 6) (1 of 5)

Monitor Speakers Printers Optical Drive


(1 of 6) (1 of 3) (1 of 7) (1 of 6)

Ethernet Card Modem Software package


(1 of 3) (1 of 3) (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!


Maintenance Nightmare?
8x4x6x5x6x3x7x6x3x3x5=
32,659,200 end items
OR
8+4+6+5+6+3+7+6+3+3+5=
56 items at the option level

ATO allows you to create fewer Bills!


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.
Level
Example
0 Pentium 4 Family ATO Model
ATO Option Class
1 Processors Hard Drives Monitors

1.4 GB 2.1 GB 17´ Flat 21´ Super


2 .30 .70 .40 .60
ATO Items
60 GB 80 GB 120 GB
Subassemblies
.20 .60 .20
Components
3
Planning Percentages
Planning Process
( 100 Pentium 4¶s in September
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Configurator
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
Configurator Rules

( E.g., Automotive Manufacturer


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Level
Configured Bill (*)
0 Pentium 4 Family*1234 ATO Model
ATO Option Class
1 Processors Hard Drives Monitors

2 2.1 GB 80 GB 21´ Super


.70 .60 .60 ATO Items
Subassemblies
Components

3
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
Creation of Configured Item
( Kick off the configuration item
workflow process, which completes
the following:
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Affect on Forecast
( Forecast at the Model level, using
planning percentages
( Configured items will consume the
forecast for the Model
Want to try it?
Metalink.oracle.com

Flow for ATO Configuration

Step-by-step instructions
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.
Thank you!

Bob Collins, CFPIM, CIRM


SSI North America
Chicago, IL
Bob.collins@us.ssiworldwide.com

August 15, 2003