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Information Driven Value Chain

Steve Gwizdala
Value Chain Planning – Solutions Specialist
 What is Value Chain Planning?

Enterprise-wide Business Planning that links:

• Strategic and Tactical
Decision Making

• Design/Development
with the Supply Chain

• Financial Planning with

Supply Chain Planning

© 2009 Oracle Corporation – Proprietary and Confidential

 Oracle Value Chain Planning Solution
Complete, best-in-class e-business planning process platform

Service Demand Signal

Parts Management
Planning
Order
Promising

Demand
Risk Management
Plant Management
Scheduling and Performance
Monitoring Management
Sales and
Operations
Planning
Collaboration and
Vendor Managed
Inventory Trade Promotion
Management

Supply and Distribution • Single source of truth

Planning • Integrated with ERP
• SOA enabled

© 2009 Oracle Corporation – Proprietary and Confidential

 Oracle Advanced Planning Solution
Enables best-in-class processes that solve key planning problems
ADVANCED PLANNING
RISK MANAGEMENT
• Design profitable supply chain
• Mitigate risk for (un)planned events
DEMAND SIGNAL MGMT
• Enables Retailer and Mfg-er collab.
• Demand and market intelligence
© 2009 Oracle Corporation – Proprietary and Confidential
BUSINESS PLANNING & PROCESS MGMT
• Business planning scenario mgmt & automation
• Business planning analysis dashboards
SALES AND OPERATIONS PLANNING
• Balance demand, supply, budgets
• Evaluate both strategic and tactical decisions
PROMOTION MANAGEMENT
• Run most profitable promotions
• Promotion lift analysis
SENSE AND SHAPE DEMAND • Execute promotions via Siebel(1)
• Improve forecast accuracy thru better statistics
• Continuous consensus planning process
• New product introductions
OPERATIONAL EXCELLENCE
DISTRIBUTION AND SUPPLY PLANNING • Integrated supply chain execution
• Rebalance inventory position at lowest cost
• 24x7 order promising
• Multi-facility constrained replenishment planning
• Distribution planning
• Supplier collaboration and VMI
• Integrated multi-method
manufacturing execution
• Manage internal and external repair
AFTER MARKET SERVICE PLANNING orders, new buy parts, and part
• Multi-echelon service supply chain redistribution transfers
• Simultaneous forecasting, replenishment, distrib. • Plant level detailed scheduling
(1) Requires Oracle Siebel AIA Connector for Consumer Goods
 Oracle Advanced Planning Solution
Enables best-in-class processes through best-in-class products
ADVANCED PLANNING
RISK MANAGEMENT
• Oracle Strategic Network Opt.
• Oracle Inventory Optimization
DEMAND SIGNAL MGMT
• Oracle Demand Signal Repository
© 2009 Oracle Corporation – Proprietary and Confidential
BUSINESS PLANNING & PROCESS MGMT
• Oracle Advanced Planning Command Center
SALES AND OPERATIONS PLANNING
• Demantra Real-Time Sales & Operations Planning
• Oracle Strategic Network Optimization
PROMOTION MANAGEMENT
• Demantra Predictive Trade Planning
• Demantra Trade Promotion Opt.
SENSE AND SHAPE DEMAND • Demantra Deduction & Settlement Management
• Demantra Demand Management
• Demantra Advanced Forecasting and Demand Modeling
OPERATIONAL EXCELLENCE
DISTRIBUTION AND SUPPLY PLANNING • Oracle Global Order Promising
• Oracle Advanced Supply Chain Planning • Oracle Collaborative Planning
• Oracle Production Scheduling
• Manufacturing Operations Center
AFTER MARKET SERVICE PLANNING
• Oracle Service Parts Planning
 Oracle Strategic Network Optimization
Consider all costs and constraints that impact the decisions
Capacity Constraints (Hard and Soft)
• Supply constraints
• Manufacturing constraints
• Transportation constraints
• Storage and inventory constraints
• Target service levels
• Dynamic safety stock
© 2009 Oracle Corporation – Proprietary and Confidential
Answering the tough questions:
• How do I manage my supply chain risk more effectively?
• What impact do changing costs have on my inventory,
production and/or sourcing strategy?
• Can I meet demand profitably?
• Where should I hold how much inventory, when?
• Should I close down a facility?
• How could I react to a disruption in supply due to
unforeseen events?
• What are my most profitable channels or products to
invest in?
• What is the impact of mergers and acquisitions on my
supply network and capital asset budget?
Costs ($): Variable and Fixed
• Transportation (inbound, outbound)
• Storage and inventory carrying costs
• Fixed costs (startup, shutdown, operating)
• Material supply
• Manufacturing and labor
• Price (for profit optimization)
 Oracle Demantra Demand Management
Real-time demand sensing and collaborative consensus forecasting
• Sense demand real-time
CHANNEL DATA – Sense demand more frequently, closer to the point of consumption
– Capture demand and forecast at more granular level (store, shelf,
attributes, product characteristics)
– Achieve consensus demand number more quickly by involving all
constituents at the same time, including customers
– Quickly identify and react to demand changes and exceptions

Collaboration
• Improve forecast accuracy
Workbench – Leverage advanced statistics for more accurate demand number
– Use any combination of quantitative or qualitative data to establish your
Marketing Order base line forecast
forecast history – High precision statistical forecasting, no statistical background required –
Superior Bayesian-Markov forecast analytics
– Forecast based on attributes and characteristics
Customer Shipments – Leverage Advanced Forecast Modeling for promotion lift decomposition
sales and causal analysis

• Shape demand for profitability

– Plan new product introductions
– Plan promotions and sales incentives
– Identify cross selling opportunities

Demand Hub and Seeded Worksheets

• Evolve to real-time S&OP
– Profitably balance supply, demand, and budgets

© 2009 Oracle Corporation – Proprietary and Confidential

 Oracle Advanced Supply Chain Planning
Holistic Planning and Optimization providing one solutions for
supply chain, distribution and manufacturing planning

Suppliers Transportation Manufacturing Transportation Distributors Transportation Customers

• Supply Chain and Distribution Planning • Manufacturing Planning

– Product family and item level planning – Sequence dependent setups/changeovers
– Alternate components, resources, processes, suppliers, facilities, – Simultaneous resources
and ship methods
– Batch resources
– End-item substitution
– Alternate resources
– Critical items and resources; aggregate resources
– Minimum transfer quantities
– Bills of distribution and transfer rules
– Redistribution (circular sourcing), load consolidation, allocation
– Complex, network routings
rules – By-products and co-products
– Include customer and supplier facilities – Line rates and take times

© 2009 Oracle Corporation – Proprietary and Confidential

 Oracle Collaborative Planning
Improve global visibility and react quickly to changes through collaboration
with trading partners

• Increase global visibility and reduce supply shortages

– Multi-enterprise visibility
– Monitor supplier performance

• Implement vendor managed and consigned inventory

– Provide value-add services as a competitive differentiator
– Reduce inventory carrying costs through automation

• Reduce planning cycle time through multi-enterprise

planning
– Collaborative supply planning
– Comprehensive waterfall analysis

• React quickly to supply chain exceptions

– Seeded and user configurable exceptions
– Fully integrated with Oracle E-Business Suite

© 2009 Oracle Corporation – Proprietary and Confidential

 Oracle Production Scheduling
Maximize shop floor throughput and optimize resource utilization

• Maximize throughput of bottleneck resources

– Automatic detection of bottlenecks
– Minimize setup with intelligent sequencing

• Improve shop floor performance

– Minimize the effect of unplanned downtime
– Easy identification of issues
– What-if rescheduling
– Drag and drop

• Quickly determine the best schedule

– Fast easy simulation
– Scenario comparison and key performance indicators

• Implement quickly by leveraging out-of-the-box

integration
– Integrated manufacturing planning and scheduling
– Fully integrated with Oracle E-Business Suite

© 2009 Oracle Corporation – Proprietary and Confidential

 Oracle Inventory Optimization
Respond quickly to demand, supply, and lead time fluctuations

Old way Push Inventory

Central Regional
Contract Final Distribution Distribution
Suppliers Manufacturers Assembly Centers Centers Customers

New way Postpone Inventory

• Increases flexibility and reduce costs by moving inventory away from the
customer to the point of postponement
• Accounts for demand, supply, and lead-time variability when determining the
point of postponement and inventory levels
• Synchronizes inventory levels and policies across the supply chain
• Helps you move from a push model to a pull model
• Increases visibility to supplier and contract manufacturer inventory

© 2009 Oracle Corporation – Proprietary and Confidential

 Oracle Service Parts Planning
Manage both forward and reverse material flows
• Simultaneously forecast, replenish and
redistribute your service parts across your
service supply chain
• More accurately forecast your service parts
– Demantra statistical forecasting engine inside for highest
accuracy
– Account for intermittent, seasonal, and fast moving demand
patterns
– Leverage composite forecasting (shipments, usages, returns)
– Use service failure rates

• Optimize the replenishment and redistribution

of parts across the extended service network,
integrated with Service Execution
• Integrate with other Advanced Planning
products for additional business processes
– Manage spare parts at customer locations (via CP)
– Manage service contract customer demand (via Dem DM)
– Manage targeted service levels and budgets (via IO)
– Produce parts in manufacturing facilities (via ASCP)

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© 2009 Oracle Corporation – Proprietary and Confidential

 Oracle Advanced Planning Command Center
Business Insight for Supply Chain Executives

Planning Analytics for Supply Chain Decision Makers

Analyze
• Get the right answers
• Self service, pre-built
• Rich content and KPIs
Analytical
• Seamless integration
Data with planning apps Pre-Built Dashboards and Reports

Analyze and compare scenarios and plans

Business scenario planning
• Decide which scenarios Plans and Archived Plans
to plan

Plan
• Compare baseline to Execute Archive plans
scenarios
alternative scenarios Scenario and
• Assign scenarios to Activity Management
planners for execution
Execute automated processes

Planning process automation

Orchestrate
• Notify constituents of Preconfigured Planning Processes
assigned activities Forecasting Supply Planning
• Link processes for manual
or automated execution
• Auto-archive plans Web Service enabled
Planning Processes

© 2009 Oracle Corporation – Proprietary and Confidential

 Oracle Manufacturing Operations Center

• Consistent mfg information for all users Contextualize Plant

• Convert equipment data into useful business info Floor Data and
• Ensure rapid response to manufacturing issues Synchronize with ERP

• Deliver performance metrics & trends by role Provide Real-Time

• Easily build dashboards to your unique needs Intelligence for
• Identify performance improvement opportunities Plant Operations

• Leverage existing plant IT infrastructure Leverage Next Generation

• Enable gradual upgrade of plant systems Manufacturing
• Simplify IT support for your core mfg strategy Operations Architecture

The Foundation for Continuous Improvement in Manufacturing Operations

© 2009 Oracle Corporation – Proprietary and Confidential

 Sample customers achieving significant benefits

• reduced ending level inventory from $200M to $50M, saving $8M annually
by automating supply chain processes
• reduced monthly inventory levels for largest customer by over $1M per
month and scenario analysis from days to 2 hours
• increased forecast accuracy from 50 to 85%, and reduced planning cycle
time from 21 to 5 days
• improved on-time delivery to 98%
• improved inventory turns by 37%
• reduced order fill rate from 55% to 95%, increase inventory turns by 100%,
reduced price protection claims by 40%
• reduced inventories by $350M, carriers from 200 to 12
• yielded a $12 million reduction in average inventory, improved forecast
accuracy from 35% to 73%, improved fill rate from 80 to 93%
• reduced order cycle time by 30%, raw material inventory by 17%
• increased service level by 12% for same inventory investment

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© 2009 Oracle Corporation – Proprietary and Confidential

 Many customers across all industries

Discrete
Manufacturing

Process
Manufacturing

Consumer
Goods /
Distribution

High Tech

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© 2009 Oracle Corporation – Proprietary and Confidential

 Oracle Value Chain Planning Solution
Enables leading edge and transformational business processes

MONITOR and MANAGE with Embedded Analytics

Predict market requirements and manage supply chain risk

– Sense demand closer to the point of consumption with real-time visibility to demand events
– Improve forecast accuracy through advanced analytics and improved consensus forecasting
– Predict impact of risk to your network by simulating planned and unplanned supply chain events
– Account for variability in your inventory positioning and postponement strategy

Shape demand for profitability

– Drive demand via promotions planning
– Manage new product introductions and marketing to shape demand and maximize revenue
– Maximize sales and improve execution by balancing supply and demand in a continuous S&OP process

Align operational plans with corporate goals

– Plan your extended value chain with holistic supply and distribution planning
– Synchronize plans and actions across the extended enterprise
– Improve supply chain visibility and align trading partners via collaboration
– Transform your service operations from cost to profit centers

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© 2009 Oracle Corporation – Proprietary and Confidential

Questions