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Supplying Your Business Advantage
Oracle APS & Demantra Specialists
• Consulting firm founded by former Oracle APS Development & Consulting managers.
• Consultants have tremendous business process / domain knowledge and have provided support, advice, and consulting services to over 75+ Oracle APS implementations
Introducing Inspirage
Agenda
• Outsourced business environment • Business challenges in collaboration• Introduction to Collaborative Planning • Modeling the supply chain• Leveraging Collaborative Planning • Conclusions
Supplying Your Business Advantage
Supplying Your Business Advantage
Outsourced manufacturing and distribution
FoundryContractManufacturer
OEM
Distribution
Assembly & Test
Customer
Customer
Customer
•Completely outsourced business environment
•Globally dispersed operations
•Common to see materials go through several continents before it reaches customers
•Growing number of products are manufactured and distributed in an outsourced environment
Supplying Your Business Advantage
OEM
Contract Manufacturers
Component Manufacturers
Multi tiered supply chain
•Some suppliers interact with OEMs directly - Tier 1 suppliers
•Other suppliers are removed at least one level away from OEMs - Tier 2 suppliers
Sub assembly suppliers
Subsidiaries
TIER 1
TIER 2
Supplying Your Business Advantage
OEM OEM
Contract Manufacturer
Component Manufacturer
Operational challenges •Work is outsourced but execution across the companies should be seamless
•Companies operate in different tiers but are part of the same supply chain
•Service levels achieved depends on performance of all companies in all tiers
•Monitoring demand across the extended supply chain is crucial
•Timely exchange of information on supplies are very important
•Value of inventory forces OEMs to track inventories across all tiers
•Need systems that operate across enterprises
Supplying Your Business Advantage
OEMAustin
Contract manufacturerChina
Component manufacturerDallas
Order forecast
Order forecast
Supply commit
Supply commit
TIER 1 SUPPLIER
TIER 2 SUPPLIER
OEM
• OEM provides forecast to Tier 1 suppliers
• Tier 1 supplier provides forecast to Tier 2 suppliers
• Tier 2 supplier provides commits back to Tier 1 supplier
• Tier 1 supplier provides commits back to OEM
• Tier 2 provides commits to both Tier 1 and OEM
Collaboration process
Supplying Your Business Advantage
OEMLos Angeles
Contract manufacturer 2Taiwan
Order forecast
Component manufacturerDallas
Order forecast
Contract manufacturer 1China
Order forecast
Component manufacturerDallas
Order forecast
•Both Tier 1 suppliers order the same part from Tier 2 supplier
•OEM does not want individual Tier 1s to place orders for the part
•OEM would like to collect the demand across all suppliers for the same part for better prices and delivery
•In addition inventory of these parts need to be carefully managed as it could be very expensiveDemand for 1000 chips Demand for 2000 chips
Total demand is 3000 chips
TIER 1
TIER 2
Operational control
Supplying Your Business Advantage
Contract Manufacturers
Component Manufacturers
Authorized order forecasts
Sub assembly suppliers
Subsidiaries
OEM
•Not all Tier1 suppliers can provide forecast for Tier 2 suppliers
•Only specific Tier 2 suppliers are authorized to receive order forecasts from Tier 1 suppliers
Order forecast
authorizedOrder
forecast not
authorized
Supplying Your Business Advantage
Contract Manufacturers
Component Manufacturers
Authorized supply commits
Sub assembly suppliers
Subsidiaries
OEM
•Tier2 suppliers cannot provide supply commits to all Tier 1 suppliers
•Only specific Tier 1 suppliers are authorized to receive supply commits from Tier 2 suppliers
Supply commit
authorizedSupply commit
notauthorized
Supplying Your Business Advantage
Contract Manufacturers
Component Manufacturers
Permissions
Sub assembly suppliers
Subsidiaries
•OEMs authorize specific Tier 1 suppliers to provide order forecast to specific Tier2 suppliers
•Tier 2 suppliers provide permission to Tier 1 suppliers to view supply commits based on OEMs instructions
Business issues - Users in the system
Supplying Your Business Advantage
Contract manufacturer-SITE1
Component Manufacturer –SITE1
Component Manufacturer –SITE 2
Order forecast
•Privileges provided at very granular level i.e. specific item, order type, site, user etc.
•Ex: User 1 at Contract Mfr. SITE1 is provided privileges to provide Order forecast for part ‘X’ to procure from Component Mfr. SITE1
•Once users are provided access to the system, the access should be restricted to relevant data to the users
• OEM should be able to monitor all forecasts published by Tier 1 suppliers
• OEM should be able to override Tier 1 forecasts and provide overrides as necessary
• OEM should be able to monitor all supply commits from all tiers
Business issues – OEMs operational control
Supplying Your Business Advantage
Supplying Your Business Advantage
Traditional collaboration
Response 1: Maintain Excess Inventory
Response 2: Reserve Production Capacity
Response 3: Expedite Everything!
Long planning cycles
Supply PlanningDemand Planning
Distribution plans
Sales
Marketing
Mfg.
Fax
Tier 2
Tier 1
CUSTOMERS SUPPLIERS
Production plans
Manufacturing plans
Paper Paper
?Manual
reconciliation
Supply Chains built on INVENTORY
Supplying Your Business Advantage
Oracle collaboration process
Enable closed loop collaborative planning processes across your value chain
• Have complete supply chain visibility
• Make better decisions
• React immediately to disruptions in supply chain
Supply Chains built on INFORMATION instead of
Inventory
CUSTOMERS SUPPLIERS
Consensus forecast and production plan
Supply Planning
Demand Hub & Multi-dimensional analysis
Automated Exceptions
S&OP Process
Singleholistic plan
Business Intelligence
Sales
Marketing
Mfg.
Manufacturing
PortalPortal
Tier 2
Tier 1
E-Business planning solution: zero latency, real-time collaboration
Supplying Your Business Advantage
Collaborate with suppliers
• Reduce shortages and improve supplier delivery performance
– Provide order forecasts to your suppliers– Identify supply-demand mismatches
• Respond better to supplier exceptions
– Get visibility to your supplier’s constraints– Review constraints in your S&OP process
• Reduce non-value added costs and exception overload
– User-configurable exceptions– Automated exception handling via workflow
Forecast
Supplier
Constraintcapacity
Plan, Spreadsheet
Supply commit(capacity)
Consensus forecast
OEM
Plan
SalesForecast
OrderForecast
Supplying Your Business Advantage
Multi-tier collaboration
Run plan
Forecast ‘memory’
Supply commit
‘boards’
Supply commit ‘memory’
Demand ‘boards’Run plan
Demand‘systems’
Supplyforecast
Consensusforecast
SUPPLIERCUSTOMER OEMCONTRACT
MANUFACTURER
Full visibility and synchronization across the extended supply chain
Supplying Your Business Advantage
OEMLos Angeles
Contract manufacturerSan Jose
Component manufacturerDallas
Order forecast
Order forecast
Supply commit
Supply commit
Modeled as Inventory
Organization
Modeled as ‘Supplier’
Organizations
Modeled as suppliers
OEM Employees
Supplier users
Supplier users
Modeling – trading partners
Modeling – trading partners
Supplying Your Business Advantage
• OEM is set up as User company as OEMs own and administer ‘Collaborative Planning’ application
• OEM facilities need to be modeled as regular inventory organizations
• Tier 1 suppliers need to be modeled as ‘supplier organizations’
• Tier 2 suppliers can be modeled as regular suppliers with multiple sites as necessary
Modeling – Users
Supplying Your Business Advantage
• OEM users are modeled as employees• Users from Tier 1 modeled as ‘supplier’ users • Users from Tier 2 are also modeled as ‘supplier’ users • Supplier users from Tier 1 are associated with
corresponding supplier contacts in procurement• Tier 1 supplier is on OEM’s Approved Supplier List• Tier 2 supplier is on Tier 1’s Approved Supplier List
Supplying Your Business Advantage
Modeling – Supplier users (both contract and component manufacturer users)
Approved Supplier Lists
Supplying Your Business Advantage
OEMLos Angeles
Contract manufacturerSan Jose Component manufacturer
Dallas
Contract manufacturerSan Jose
Approved Supplier List and Sourcing rules Approved
Supplier List
Inventory Org Supplier Org
Security rules
Supplying Your Business Advantage
• Security rules in CP specify specific data that can be shared by trading partners
• Do not need rule to view your own data• Need to specify rules to enable data from other trading
partners• Examples
– OEM specifies a rule for a Tier 1 supplier to share order forecast with specific Tier 2 supplier
– Tier 2 provides a rule that enables Tier1 to view supply commits from Tier2
Supplying Your Business Advantage
Security rulesAccess given by COMP MFR OEM
Order Type Supply Commits Order forecast
Order number
Item
Org
Customer
Customer Site
Supplier COMP MFR COMP MFR
Supplier Site XXXX XXXX
Privilege view update
Access given to company company
Assigned to CONTRACT MFR CONTRACT MFR
Effective from Date
20-Nov-2006 20-Nov-2006
Effective to Date
Process
Supplying Your Business Advantage
OEM to Tier 1
• OEM prepares and publishes order forecast for contract manufacturers (Tier 1) based on over all end demand
• Order forecast is available for Contract manufacturer
• Contract manufacturer logs into the system, reviews demand (order forecast from OEM)
Tier 1 to Tier 2
• Contract manufacturer provides order forecast for Component manufacturer (Tier 2)
• Component manufacturer logs into the system, reviews demand (order forecast from Contract manufacturer – Tier 2)
• Component manufacturer (Tier 2) provides commits to Contract manufacturer (Tier 1)
Tier 1 to OEM
• Contract manufacturer provides commits to OEM
• OEM logs in and reviews commits provided by Contract manufacturer
Over all control by OEM
• OEM monitors Order Forecast provided by Contract Manufacturers (Tier 1) to Component manufacturers (Tier 2)
• OEM monitors commits provided by Component manufacturers (Tier 2) to Contract manufacturers (Tier1)
Summary
Supplying Your Business Advantage
• Outsourced business environment poses significant operational challenges
• Key challenges involve collaborating with trading partners in several tiers
• Oracle collaborative planning offers comprehensive capabilities to address collaboration requirements in an outsourced environment
• Attention to modeling, set ups, data security, and processes are required
• Seamless collaboration can be achieved across tiers with careful system planning