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Global Business Enablers in R12+Increase Competitiveness Through Streamlined Global Operations
Sid Perera
Principal Consultant
Oracle Corporation
The following is intended to outline our general
product direction. It is intended for information
purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
Safe Harbor Statement
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
material, code, or functionality, and should not be
relied upon in making purchasing decision. The
development, release, and timing of any features
or functionality described for Oracle’s products
remains at the sole discretion of Oracle.
Globalization
• Manufacturing: Sony, Dell, and Apple use China’sQuanta Computer for laptop manufacturing
• R&D: Procter & Gamble to source 50% of newproduct ideas from global partners by 2012
• Design: Boeing designs navigation and landinggear systems in India
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
“Our strategy is to work with global networks to leverage the best “Our strategy is to work with global networks to leverage the best
technologies on the planet.” technologies on the planet.”
---- HP SVP Dick ConradHP SVP Dick Conrad
• Procurement: Pella sells windows primarily in theUS, but sources many parts overseas
• Shared Services: Citigroup uses a single globalHR system to serve all divisions and geographies
This requires businesses to This requires businesses to ……
� Think Globally to make the right decisions
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
�Work Globally to be more productive
�Manage Globally to lower cost and increase performance
How
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Delivers
Agenda
• Distributed Manufacturing
• Contract Manufacturing
• Buy / Sell Subcontracting
• Landed Cost Management
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
• Landed Cost Management
• Global Lot and Serialized Manufacturing
Distributed Manufacturing
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Plant E & F
Plant D
Central ERP
Distributed ManufacturingToday's Environment
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Plant APlant APlant B & C
Plant D
Support for Global Shared ServicesTo gain efficiencies some functions need to be consolidated and shared
SingleSingle
GlobalGlobal
DatabaseDatabase
SingleSingle
GlobalGlobal
DatabaseDatabase
Shared Shared
Service Service
CenterCenterDrive
Shared Services
with R12
Initiatives
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Increase the efficiency of shared services and single database operations with
streamlined processing, reporting, and access across operating units
Org 3Org 3Org 2Org 2Org 1Org 1
Examples: Payables, Purchasing, Collections, HR
Initiatives
Holland
Legal Entity
Denmark
Legal Entity
Belgium
Legal Entity
Belgium
Operating Unit
Holland
Operating Unit
Denmark
Operating Unit
Perform multiple tasks
across operating units
(OUs) without changing
responsibilities
R12 Multi-Org AccessIncrease the efficiency of shared services and single database operations
with streamlined ACCESS, processing, and reporting across operating units
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Single Responsibility
Operating Unit Operating Unit Operating Unit
• Define and manage OUs from a central location
• View and manage customers across OUs
• Enter and pay invoices across OUs
• Receive goods across any OU
• Negotiate with suppliers for your enterprise, not just your OU
For Example:For Example:
Plant E & FCentral ERP
Global Single Instance Vs Distributed ManufacturingToday's Environment
???
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Plant APlant APlant B & C
Plant D
???
???
Case for “Distributed Manufacturing”Today's Challenges
• Need to support 24x7 operations in geographically diverse plant locations
• Plant MES affected by ERP downtimes
• New MES release features can be up taken only through ERP upgrade
• Managing several software vendor
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
• Managing several software vendor solutions
• Difficult to Integrate with ERP because of different Data Models
• Creating Distributed Application footprint requires additional effort
• Inability to model detailed routings for execution and milestone routing steps for planning or costing purposes
Distributed Discrete MES A deployment option to carry out manufacturing activities independent of central ERP
• Achieved by deploying Discrete MES in separate
standalone instances for different location or groups of
locations
• Manufacturing transactions are reported in the
Standalone instances
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Standalone instances
• Transactions are synchronized with the ERP system to
facilitate global cost collection, accounting and to
provide global overview of manufacturing process.
Plant E & F
Plant D
Central ERP
Distributed Discrete MES
Standalone
Standalone
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Plant APlant B & C
Plant D
Standalone
Central ERP
������������
Resource Transactions
Complete Work Order
Operator Selects
Job in Dispatch
List
Perform Move
Transactions
Material IssueEnter Quality DataCreate Work
Order
Distributed MES Instanceauto
Distributed ManufacturingProcess Flow - Perform Transactions and Synchronize
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Create Work Order
with Milestone
Routing Steps
������������
Resource Transactions
Material Issue
Cost Transactions
Record Milestone
Move TransactionsRecordWork OrderCompletion
ERP Instance
Distributed Discrete MESProcess Flow - Perform Transactions and Synchronize
Oracle Data Data cleansing
Distributed MES Instances
Maintenance Quality MES Inventory Shipping HRReceiving
User, Item, BOM,
Routing, Inventory
setup, WIP setup
New Jobs, Move, Material &
Resource Txns, Job
Completion
Inbound Data Services Inbound Setup Services
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Oracle Data
Integrator
ERP InstancePlanning Planning
Data cleansing
Routing mapping
Transaction Sequencing
User, Item, BOM,
Routing, Inventory
setup, WIP setup
New Jobs, Move, Material & New Jobs, Move, Material &
Resource Resource TxnsTxns, Job , Job
CompletionCompletion
Inbound Txn Services
jobs
Source Data stores
Target Data store
Distributed Discrete MES Oracle Provided Configurable ODI Maps
Source
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Mappings
Install and Setup
Oracle Data
Integrator (ODI)
Distributed Discrete MES Distributed Detailed Routings (Optional)
Setup Master
Entities
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Perform
Transactions &
Synchronize
Setup Detailed
Routing
Benefits of Distributed Discrete MES
Benefits
• Lightweight/Standalone Mfg functionality deployable at each plant
• Minimal setups to get plant up and running quickly
• Can be integrated with EBS 11i/12.1 (No ERP Upgrade!)
• Support for all standard mfg modes
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
• Support for all standard mfg modes
• Detail Routing in MES and Master routing in ERP
• Framework to create custom user interfaces with zero coding
• Integrate Shop floor devices
Contract Manufacturing
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Support for Contract Manufacturing
Cust
Cust
OEM
OEM--US
US
SOSO
OEM
OEM--EE
OEM
OEM
DISTDIST
DESIGNDESIGN
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
OEM
OEM--AA
C MFG
C MFG
SUP
SUP
MAKE?MAKE?
MAKEMAKE SHIPSHIP
Support for Contract Manufacturing
Cust
Cust
OEM
OEM--US
US
SOSO
OEM
OEM--EE
OEM
OEM
DISTDIST
DESIGNDESIGN
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
OEM
OEM--AA
C MFG
C MFG
SUP
SUP
MAKE?MAKE?
MAKEMAKE
COMPCOMP
SHIPSHIP
Buy/Sell SubcontractingDescriptionOEMOEM MPMP
Sales Orders
for Components
Create
Purchase Orders for
Components
Order
Components
Create Work Order
for Assembly
Send
Subcontracting Order
Create
Subcontracting
Order for
Outsourced
Assembly
• OEM completely outsources
the manufacturing of an
assembly by buying the assembly from a Manufacturing
Partner (MP) and sells the components (used to build the
assembly) to the MP.
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
2323
Ship components against
Sales Orders
Manufacture
Assembly
Receive
Components
Ship Ship
AssemblyAssembly
Receive
Outsourced
Assembly against
Subcontracting
Order
Buy/Sell SubcontractingSolution OverviewOEM MP • Involves modeling of OEM and
MPs as inventory Orgs.
• Eliminates the need to manually ..
• Create Discrete Jobs, Component Purchase and Sales Orders
Create
Subcontracting
Order for
Outsourced
Assembly
Send
Subcontracting Order
Auto Create
Sales Orders
for Components
Auto Create
Purchase Orders for
Components
Auto Create Discrete Job
for Assembly
Order
Components
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
24
• Perform Component Receipts, Assembly Completions and inventory transactions are
performed in the MP Org
• Supports both Synchronized and Pre-Positioned Component supply modes.
Automated
Ship components against
Sales Orders
Auto Receive
Components
Manufacture
Assembly
Ship
Assembly
Receive
Outsourced
Assembly against
Subcontracting
Order
Auto Complete
Discrete Job
Buy/Sell SubcontractingSetup – MP Organizations
Select Check box for
Manufacturing Partner
Organization MP organization is a simulated
organization, Accounting transactions
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
25
organization, Accounting transactions
in this organization should not be
transferred to GL
Check this for outsourced
assembly,
Profile JMF:Enable
OEM Organization
Buy/Sell SubcontractingSetup – Outsourced Assemblies in OEM
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
26
Profile JMF:Enable
Subcontracting is Yes
Defined as either “Synchronized” or
“Pre-positioned”
OEM Organization
Buy/Sell SubcontractingSubcontracting Components in OEM
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
27
Buy/Sell SubcontractingSubcontracting Component Types
• Synchronized
Components are shipped to MP with reference to a
specific Subcontracting Order along with the order.
• Pre-positioned
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
28
• Pre-positioned
Components are shipped to MP without reference to
any Subcontracting Order ahead of assembly
requirements.
Buy/Sell SubcontractingSetup – Shipping Networks
Select “Buy/Sell” as the
Subcontracting Type to
define the Subcontracting
relationship between OEM
and MP
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
29
An OEM can either have a Buy/Sell or a Chargeable Subcontracting
relationship with a particular MP
Chargeable Vs Buy/Sell Subcontracting
• Chargeable
Component Sale is provisional and ownership lies
with the OEM
• Buy/Sell
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
30
• Buy/Sell
Ownership is transferred to the MP once the
components are shipped
On the Workbench users can search
subcontracting Orders and verify
the receipts
Subcontracting order headers of
Outsourced Assembly
Buy/Sell SubcontractingTracking Subcontracting Orders through Subcontracting Workbench
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
31
Outsourced Assembly
Subcontracting order line shipment
or releases
Details of the
Components to be
shipped to MP
Complete Accounting for Intercompany Transactions
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
ASCP Supports Global Planning
Cust
Cust
OEM
OEM--US
US
SOSO
OEM
OEM--EE
DISTDIST
DESIGNDESIGN
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
EEOEM
OEM--AA
C MFG
C MFG
SUP
SUP
MAKE?MAKE?
MAKEMAKE
COMPCOMP
SHIPSHIP
Landed Cost ManagementCosting Global Supply Chain Transactions
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Costing Global Supply Chain Transactions
LCM Simple ExampleInbound Shipment
Minneapolis US PortVessel CarrierHK PortShipment to HK
Customer
Issue PO: 123
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
$100 $2 $3 $20 $3 $2 $140
China Manufacturing Buyer
An additional 40% is added on to the purchase price of the item
$5
Duties
$5
Broker Fees
PO: 123Item A Cost
Item ATotal Landed
Cost
35
Estimated Landed Cost
Landed CostUnit Cost
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Charges
Oracle Landed Cost ManagementKey Features
• Prior to Receipt
• Simulated Landed Costs
• At Receipt
• Calculated / Estimated Landed Cost
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
• Calculated / Estimated Landed Cost
• At Invoice Processing
• Actual Landed Cost
LC Calculation at Receipt User Actions
Ship Goods
Supplier /
Carrier
Create PO
Buyer
Receive Goods in
receiving
Receiving Clerk
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Automated Actions
Accrue Receipts
Update Item
Cost
Costing
Capture Estimated
Charges
Calculate Estimated
Landed Cost
LCM
Integrate with Costing
RCV
Integrated with
LCM
Actual Landed CostUser Actions
Supplier
Item
Invoice
Charge
Invoice
Review Actual
Calculation Process
LCM ClerkPayables Clerk
Enter Invoices
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Automated Actions
Accrual Reversal /
Accounting
Validate Invoices
Payables LCM
Calculate Actual
Landed Cost
Update Actual
Cost (OH)
Costing
Invoice details
Compliance Clerk
Enter LCMShipments
Oracle Landed Cost ManagementPre-Receiving –Simulations (Optional)
User Actions
Payables Clerk
Enter Invoices Review ActualCalculation Process
LCM Clerk
Ship Goods
Supplier /Carrier
Create PO
Buyer Receiving Clerk
Receive Goods in Receiving
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Capture Estimated Charges
Calculate Estimated Landed Cost
LCM
Actions
RCV
Manage Landed Cost from the PO
Actions -> Manage Landed Cost -> Go
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Buyers/Brokers can estimate landed cost directly from the purchase order.
Receiving LCM Shipments
• Receive by LCM Shipments
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Global Serialized ManufacturingKnow the Source and Placement of Every Part
Boards R’ Us
Denver, CO
IrelandManufacturingPartner
Composition
Composition
Where Used
Where Used
Suppliers
Server
(S.No. 512)
Storage
(S.No. 929)PCI Board
(S.No. 717)
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Acme ChipFab 12
E. Storage
Austin, TX
SKD Co.
S. KoreaNippon Fab
Japan
Composition
Composition
Where Used
Where Used
Disk B
(S.No. 339)Disk A
(S.No. 676)
Disk Array
(S.No. 892)Memory
(Lot No. 115)CPU
(S.No. 232)
Track and Trace a Customer Shipment, Lot, or Individually-Serialized Product Back to the Original Source Across the Globe
Manufacturing Practices for Global OperationsSatisfy local requirements to compete in key outsourcing regions
Chargeable SubcontractingAutomatically create replenishment orders and
track component allocations & inventory for sub-
contracted manufacturing (e.g. Shikyu)
Golden Tax Support for ChinaProvide compliant VAT calculation, invoicing, and
tax reporting via China-certified “Golden Tax”
software
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
contracted manufacturing (e.g. Shikyu)
Customer Acceptance, Deferred Revenue and
COGSRecognize and account for COGS and revenues in the
same proportion, based on flexible contingencies &
within the same accounting period
Periodic Average CostingSupport accounting compliance requirements in
countries such as China/Taiwan
Summary
• Shared Services
• Distributed Manufacturing / MES
• Contract Manufacturing
• Buy/Sell Manufacturing
• Landed Cost management
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
• Landed Cost management
• Global Lot/Serial Tracking
• Golden Tax – China
• Periodic Average Costing – China, Taiwan, Etc.
• Customer Acceptance / Deferred Revenue - Japan
• Lot more!
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract