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  • My presentation looks at the pro’s of implementing Demantra & SCP from ResMed’s perspective, and some of the tricks and traps we have experienced
  • ResMed manufactures in two main sites in Sydney and Singapore and distributes through a central warehouse in Europe and a network of distribution centre’s globally to customers
  • In many cases we talk about the financial benefits we expect to achieve from these types of systems, however there are many non-financial reasons to implement, and these were some of the major reasons for ResMed going down this path with Oracle. Our existing systems were already performing reasonably well.
  • At ResMed we have achieved much of the tangible benefit from improved forecast accuracy. Increasing forecast accuracy at this point is not the path to reduced inventory because much of the inventory holding is required to support variation in the supply chain, not variation in sales. Resmed’s shipping lead time from plant to customer is around 8 weeks. Supply chain planning becomes a critical element here as an effective system is required to ensure that production and shipping occur to optimise service and minimise freight costs. Objectives will be to ensure that stock is held at an optimimum position in the supply chain hub, that distribution around the wheel occurs if it is desirable to meet objectives, and that stock is distributed on a “fair share” basis in a short supply position
  • Addressing or achieving the “intangible benefits” was one of the key drivers for ResMed to implement both Demantra and ASCP
  • My presentation focuses more on the intrinsic benefits of implementing Demantra & SCP from ResMed’s perspective, and some of the tricks and traps we have experienced
  • Demantra and ASCP both have possibilities that to some extent will be unlocked based on the calibre of people you have. Key users are System developers, database administrators, power users, casual users. In terms of ownership, we have placed this in the hands of the business, rather than IT, which creates more autonomy to develop the system. This won’t be the case for ASCP due to greater complexity.
  • We see these as the key users, each will require certain skills levels in order to perform effectively
  • One of the key considerations is how and where will data be loaded into ASCP, and how will the determination of destination be determined?
  • We captured data by warehouse/customer combination as that was the most feasible at the time. We didn’t perceive a problem as supply sources are largely handled by Sourcing rules within Oracle ERP. It is only with the move to multiple central warehouses shipping direct to customers that this has become a problem. In hindsight perhaps we should have changed to Customer/Region relationships and tried to fix the underlying data problems.
  • Using Customer/Region relationships
  • Data stability will help improve the quality of forecasts generated by Demantra. Managing supply chain processes and variations could help improve results.
  • It was felt that capturing data for all customers would lead to discontinuous and erratic forecasts, and degradation of system performance, however we still wanted the ability to analyse sales at a customer level. The compromise was to capture individual customer sales where the customer was big enough to generate good forecasts, and bucket sales where they were not
  • Within our database there are many items and parameters that haven’t been maintained over time. This has turned out to be problematic in implementing ASCP particularly as this “unclean” data makes it difficult to get to real issues. In addition, inappropriate use of fields through lack of foresight in some cases made what could have been simple/effective solutions difficult or impossible.
  • Utilise experience and knowledge of consultants to avoid hidden pitfalls during system development
  • We see constraint based optimisation through ASCP as our solution to replacing our existing systems (which are effective but not robust) with an effective and efficient alternative


  • 1. Using Oracle Demantra & ASCP in a Global Planning EnvironmentPhillip BrownResMed16 August 2010
    The most comprehensive Oracle applications & technology content under one roof
  • 2. Presentation Outline
    Overview of ResMed operation
    Reasons for implementing Oracle Demand Management/Advanced Supply Chain Planning
    Key elements
    People, integration, improving forecasts, tips & traps
  • 3. ResMed…overview
    • Earnings >1Billion USD annually
    • 4. manufacturing sites Sydney & Singapore
    • 5. 95% of production exported
    • 6. Demantra implementation commenced March 2008
    • 7. Approximately 100 Demantra users globally
    • 8. Interfaces with Oracle ERP for manufacturing & distribution
  • ResMed…global operations
  • 9. Why implement?
    Positive ROI
    Reduce inventory
    Reduce backorders or lost sales
    Manage increased business complexity
    Introduce process stability
    Reduce dependence on specific individual knowledge
    Provide foundation for future growth
  • 10. Why implement…tangible reasons
    Maximum inventory reduction from forecast accuracy achieved
    Current forecast accuracy ~90%
    Variation in supply chain now greater challenge
    Variations in shipping times
    Delays through customs
    Stock discrepancy & quality issues
    The need to rebalance between nodes without triggering new builds
  • 11. Why implement…intangible reasons
    Key drivers for Demantra
    Increasing distribution complexity
    Risks associated with reliance on individuals
    Risks with lack of robustness in existing system
    Need for seamless global system that facilitates accountability and visibility
  • 12. Why implement…intangible reasons
    Key drivers for ASCP
    Increasing distribution complexity
    Need for more effective optimisation model
    Need to remove reliance on individuals
    Risks with lack of robustness in existing system
  • 13. Musings about Demantra & ASCP
    Why Demantra wont improve your forecast accuracy…further
    Do I have the right people?
    Getting ASCP & Demantra to work together
    Tips & traps…I wish I hadn’t done that!
  • 14. People puzzle…
    Demantra, & to some extent ASCP evolution will be influenced by…
    caliber of people available to perform various roles
    defining ownership between Business Process and IT
    Degree of autonomy of users
  • 15. People puzzle…
    Key users involved with the running of Demantra…
    System developers
    Database administrators
    Power users (demand planners)
    Casual users
  • 16. Integrating ASCP & Demantra…
    Loading forecasts to ASCP
    Create customer/warehouse combinations in Demantra
    Load based on warehouse
    Create customer/region combinations in Demantra
    Map regions to warehouses through dynamic combinations table
  • 17. Integrating ASCP & Demantra…
    Using Customer/Warehouse combinations in Demantra…
    simple distribution operation
    creates visibility of warehouse demand in Demantra
    data integrity for customer/region combinations is not available from source
    changes in Warehouse source for a given customer is not easy to update in Demantra…can lead to erroneous forecasts
  • 18. Integrating ASCP & Demantra…
    Using Customer/Region combinations in Demantra…
    allows greater flexibility to change distribution network without impacting forecast
    could facilitate forecasts by territory/sales person or other similar splits
    requires available data integrity to support this…ResMed didn’t have this on a global basis
  • 19. Improving forecast accuracy…
    Modify buyer behaviour rather than modifying forecasts
    Many sales incentives encourage customers to buy in erratic patterns. Erratic demand makes forecasting difficult.
  • 20. Tips & Traps…tips
    Bucketing of demand
    Not too much/not too little gives a balance between system performance and quality info
    ResMed option
    Capture data by customer for top 50% revenue
    Bundle data of customers for next 30% revenue
    Bundle data for remaining 20% revenue
  • 21. Tips & Traps…tips
    Capture demand not sales
    To give true indication of future potential demand
    Recognises customer orders in the period they were requested, whether shipped or not, as opposed to shipped or invoiced orders
    Forecasts in future periods are then based on customers desires rather than operation capability at a previous point in time
  • 22. Tips & Traps…tips
    Create separate inputs for functions
    Such as separate series to create visibility of user inputs
    create clear override hierarchy for forecast modification
    Creates opportunity for input of reference forecasts for future comparison or negotiation (eg Marketing/Finance series)
  • 23. Tricks & Traps…traps
    Maintaining data for full spectrum of items
    Ignoring data for “inactive” codes may present problems later for things like exception reports
    Avoid inappropriate use of fields
    inappropriate/inconsistent use of fields such as “Territory” makes them difficult to use for meaningful data capture later
  • 24. Conclusion
    Support through implementation
    Oracle consultants provided effective guidance in the direction we took
    This was useful in either tempering our expectations, developing our ideas or providing alternatives to arrive at effective solutions
    Few changes were made after implementation largely as a result of an effective collaborative approach between Oracle & ResMed during development
  • 25. Conclusion
    Future direction
    Our key challenge now is implementation of ASCP
    Objective is constraint based optimisation
    Horizon of at least 12 months to enter this phase
    Implementation of unconstrained ASCP as precursor to this
  • 26. Tell us what you think…