Oracle Value Chain Planning Data Sheet


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Oracle Value Chain Planning Data Sheet

  1. 1. ORACLE DATA SHEET ORACLE VALUE CHAIN PLANNING KEY FEATURES Supply chain executives today face a tough battle of trying to adhere to • Predict market requirements and supply chain risk their CEO’s agenda of sustainable growth and shareholder value while • Shape demand for profitability dealing with an ever changing supply chain model. Oracle’s Value using promotion strategies and alignment of new product Chain Planning solution offers companies a complete, integrated, open, introductions • Align operational plans to and modular solution that brings analytics and optimization together corporate goals into a common platform to enable them to profitably and efficiently • Support a continuous and proactive Sales and design, plan, and service their value chains. Operations Planning process • Leverage inventory OVERVIEW postponement optimization to Key drivers for supply chain success are operational flexibility, risk management, and improve customer service levels at lower cost continuous innovation and companies can only realize this by bringing analytics and • Evolve at your own pace from optimization together into a unified holistic solution. To achieve highest value and turn unconstrained to constrained companies into leaders, it is important that this solution supports balancing product, and optimized supply planning • Collaborate with your demand, and supply simultaneously and continuously and helps them effectively manage suppliers and customers to the interplay between their demand chains, design chains, and supply chains automate inventory replenishment processes Oracle Value Chain Planning is the only solution that provides this platform. It enables (VMI) and reduce planning you to predict market requirements and supply chain risk, shape demand for profitability, cycle time • Improve supply chain visibility and align operational plans to corporate goals. In addition, it helps you to continuously via exception management monitor and manage your extended value chain through embedded analytics that operate and integration with Oracle in the context of your strategic, tactical, and operational planning applications. Transportation Management • Continuously monitor and manage supply chain performance across various business scenarios • Leverage out-of-the-box statistics, optimization, extensively defaulting and pre-built best practice templates to start quickly • Implement constrained order promising to ensure improved customer commitments • Manage your order backlog and customer allocations • Improve shop floor throughput Figure 1: Oracle Value Chain Planning – Common platform for Analytics and Optimization through production scheduling • Transform your service Oracle Value Chain Planning components can be deployed stand-alone or integrated with operations to profit centers other Oracle systems. You can start quickly with any solution component to address your • Leverage out-of-the-box integration with Execution most important business problem first and then evolve to a best-in-class solution at your • Deploy stand-alone or own pace, leveraging your existing investments and managing reduced IT budgets. integrated with Oracle 1
  2. 2. ORACLE DATA SHEET PREDICT MARKET REQUIREMENTS AND SUPPLY CHAIN RISK The first key step to improved profitability and efficiency is to be able to translate real- time demand visibility to profitable market strategies. By understanding what your customers’ buying and investment patterns are or where product mix and market shifts are taking place, you can react quickly by shifting your own strategy. Sense demand closer to the point of consumption with real-time visibility to events Rapid response to changing market demand starts with getting demand signals at a very granular level, close to the point of consumption, and by automating the evaluation of those signals. In addition, you need to be able to augment your own shipment records with syndicated point-of-sale data when operating a highly consumer driven demand chain. Designed to enable demand-driven planning, Oracle Value Chain Planning enables you to sense demand from multiple data sources including shipment and order history, distribution center withdrawals, customer collaboration, point-of-sales, and marketing data. Oracle Value Chain Planning helps you analyze demand data at various levels to understand channel dynamics and demand signals by particular grouping or class of customers (for example, industrial versus retail), type of demand (for example, contract versus spot demand), or different sources of demand (for example, internet versus wholesale). Such detailed understanding of origin and relative contribution of various demands enables various demand shaping activities – programs and events designed to stimulate sales and grow market share for individual products or groups of products. Improve forecast accuracy through advanced analytics and improved consensus Better real time demand insight is only useful if you can translate it into a more accurate consensus forecast. First, you need to move away from a static demand analysis to a more continuous process to maintain consensus. Oracle Value Chain Planning enables this by providing a robust workflow and event driven collaboration paradigm across all constituents – Sales, Marketing, Finance, Operations, and even suppliers and customers. While collaborating, each participant still gets the information tailored to their needs to be able to make key decisions. In addition, the system keeps an audit trail of all changes, with notes that capture key decisions and assumptions. It also generates exceptions to ensure responsiveness to rapidly changing demand signals. You can use any combination of qualitative and quantitative data to establish your base line forecast and forecast based on product attributes and characteristics. As a key component of Oracle Value Chain Planning, Oracle Demantra offers a patented Bayesian analytical forecasting engine that generates the most accurate forecasts possible. Automated algorithms consider many industry-standard and proprietary forecasting models, mixed in an infinite number of combinations to handle a wide range of product life cycles and demand patterns including intermittent demand. Causal correlations and other analytic parameters are automatically maintained at appropriate hierarchical levels where statistically relevant and adequate data points are available. Oracle Demantra hides statistical complexity from demand planners (“PhD in a box”), yet can be extensively modeled by statisticians as required for your business. 2
  3. 3. ORACLE DATA SHEET Predict the impact of supply chain risk by simulating planned and unplanned events Oracle Value Chain Planning helps you design more resilient supply chains. Leveraging the strategic network design and optimization capabilities, you can evaluate value chain strategies in the context of risk and net delivered cost; determine the risk and benefits of single versus dual sourcing strategies using local and global suppliers; analyze the effect of increased lead times and increased logistics costs on working capital and cash flow as a result of outsourcing and off-shoring; and consider increased buffer stock needed to hedge against increased variability. Another important aspect of risk mitigation is to be able to identify ‘choke points’ in your extended supply network and to understand the cost and disruptions of planned and unplanned events. It is imperative to perform this analysis more frequently as it enables you to develop contingency plans more quickly, especially in the current environment of rapidly changing market conditions. Oracle Value Chain Planning also enables you to determine the most profitable sourcing strategy considering manufacturing, purchasing, and logistics costs. In addition, you can rationalize your asset strategy for profitability by determining the right number of assets in your supply chain, and their best locations, while considering all costs and constraints. Account for variability in your inventory positioning and postponement strategy Another important element that drives supply chain resiliency and profitability is to identify the right inventory postponement strategy. To determine how to meet your customer service commitments at the lowest cost, you need to consider all distribution, manufacturing, customer and supplier locations; account for all demand, supply, and lead time uncertainty; and have visibility to new product introductions and product phase-outs. By simulation what-if scenarios, you can quickly determine how to allocate your scarce inventory investment to most profitable channels, products, as well as manage contractual commitments to key customers. Oracle Value Chain Planning’s inventory postponement optimization enables you to choose the best service level strategy based on costs (inventory carrying cost, production cost, procurement cost, transportation cost), revenue, profit, target service levels, capacity constraints, and budgets. You can simultaneously evaluate all fixed and variable cost impacts of sourcing strategies and the cost impacts of variability and service level objectives – this enables you to assess the true net delivered cost of strategic decisions. For example, when making a sourcing decision between ‘a remote supplier with a low unit cost and a long delivery lead time’ against ‘a local supplier with a higher unit cost and shorter lead time’, you need to know if the increased inventory cost from the safety stock (required to buffer you against variability over the long lead time) can offset the unit cost savings. 3
  4. 4. ORACLE DATA SHEET SHAPE DEMAND FOR PROFITABILITY The next step to profitability is to move from only reacting to demand to profitably shaping demand. Traditionally, companies treat demand as a fixed input to the supply planning process and simply ask Operations to determine the best way to fulfill it. However, demand can be shaped by leveraging instruments like promotions and incentives, product lifecycle events, and supply events. Oracle Value Chain Planning provides unique capabilities like predictive trade planning and real-time sales and operations planning that enable you to shape your demand and profitably balance supply and demand to meet your financial objectives. Impact demand via promotions planning Faced with escalating trade spending, leading companies are rethinking their approach to trade promotion planning. Most of the existing systems focus on the transactional aspects of promotions and sales incentives. As a result, they streamline administration, but they do little to address key issues such as promotion effectiveness, on-shelf availability, category growth, and customer profitability. Oracle Value Chain Planning predictive trade planning and promotion optimization addresses both transactional and strategic trade challenges. Using Oracle’s trade planning solution, your industry sales teams can control spending, exceed sales targets, and maximize promotion return on investment. First, it helps you gain a better and detailed understanding of the financial and operational impacts of sales incentives (for example, decompose lift to understand halo effects, cannibalization, and consumer stock piling). Second, you can develop integrated strategies to adjust demand to constrained supply (for example, by pulling in or delaying promotion programs; or, by leveraging excess supply capacity to influence demand). Manage new product introductions to shape demand and maximize revenue With product life cycles getting shorter, you need to be able to quickly add new products and forecast their demand based on the sales history and characteristics of ‘like’ products. Oracle Value Chain Planning helps you to determine in which channels and locations to introduce new products first, before expanding globally. In addition you can identify the revenue impacts and profitability of new product introduction schedules, evaluate the cannibalization of existing products on revenue and inventory goals, and determine price breaks and promotions that can be leveraged for sell-off or ramp-up. Maximize sales and improve execution by balancing supply and demand in a continuous and proactive Sales and Operations Planning process Evolving from a periodic reactive to a real-time iterative and proactive sales and operations planning process is another recommended step to become a leader. Oracle Value Chain Planning uniquely enables a best practice sales and operations planning process that ensures that management can interactively engage in the S&OP process by reviewing performance to baseline, assigning execution to baseline, comparing alternative business scenarios that address performance deviations, and by analyzing corporate metrics by various dimensions and aggregation levels (with the ability to drill down to root-cause planning information). Oracle Value Chain Planning enables you to get started quickly by leveraging best practice templates that can be adapted quickly to support your unique business processes. 4
  5. 5. ORACLE DATA SHEET ALIGN OPERATIONAL PLANS WITH CORPORATE GOALS Another important step to establish leadership is to effectively execute to plan and measure operational performance to corporate objectives. Plan your extended value chain with holistic supply and distribution planning Oracle Value Chain Planning helps you align your operational plans with your corporate goals. You can perform simultaneous material and capacity planning across multiple facilities and time horizons in a single planning run, while at the same time accounting for the latest consensus forecast, sales orders, production status, purchase orders, and inventory policy recommendations. As a single solution for both supply chain distribution and manufacturing planning, it is based on a common supply chain model and setup. Its flexible configuration, however, enables you to define different models that can co-exist and evolve as your organization grows. You can choose to immediately start with more advanced constrained and optimized planning constructs, leveraging the out-of-the-box optimization, or decide to get to that point gradually by starting with unconstrained planning. In addition, you can make different constraint choices on a plan by plan basis and use plan comparison to determine which plan yields the best results for your business. Improve on-time delivery with ‘zero downtime’ constrained order promising Oracle Value Chain Planning improves on-time delivery by accurately promising orders across a global supply chain based on material, manufacturing, transportation, and supplier capacity to determine the best location to fulfill demand. Its unique database- centric order promising engine helps you effectively deal with allocation and backlog scheduling problems, whether you promise orders from a web store, call center, or your order management application, on a ‘zero downtime’ 24x7 basis. Improvements in customer service and profitability can be achieved by leveraging the robust rules-based allocation engine to manage allocation and ensure service to your key customers. Maximize your shop floor throughput with real-time production scheduling After you have promised your orders, you can still be faced with throughput issues on the shop floor as a result of poor bottleneck visibility and production disruptions. Oracle Value Chain Planning enables you to model your shop floor in a flexible way and react quickly to changes on the shop floor for either actual or planned work. You can model sequence dependencies, batching, production campaigns, alternate resources, operations, and routings, co- and by-products, contiguous operations, complex setup and change-over scenarios, and lead times to rapidly synchronize multi-stage production schedules and effectively reduce work in process and maximize throughput, regardless of operating a process, discrete, or semiconductor manufacturing environment. 5
  6. 6. ORACLE DATA SHEET Improve supply chain visibility and align trading partners via collaboration To reduce your planning cycle even more, you can directly involve selected customers and suppliers in your supply chain planning processes. Having full visibility to their demand and supply changes enables you to adapt more quickly to changing business conditions and therefore reduces planning cycle time. Highly configurable exception management enables you to implement a high degree of automation on how to deal with supply-demand mismatches in your collaboration process. Also, you can fully automate your inventory replenishment processes that span planning and execution: consigned and vendor managed inventory scenarios with both customers and suppliers are fully supported, along with stock-out analysis and simulation. Finally, you can quickly react to transportation events in your production plan through the pre-built integration with Oracle Transportation Management – short-term changes in arrival and shipment dates can result in unexpected supply exceptions that require planners to address immediately to avoid impacts on critical customer orders and scheduled production. Transform your service operations from cost to profit centers The world’s leading organizations have realized that operational efficiency combined with customer service can drive marketplace success. Service organizations are instrumental in achieving top line growth, profitability, and customer loyalty. Oracle Value Chain Planning’s enables you to simultaneously analyze forecast and replenishment decisions, as well as release plan recommendations for execution for all service parts while considering key constraints such as part criticality, part condition, and part supersession. For example, it automatically plans to repair returned defective parts and consumes inventory of older revisions before planning new buy orders to fulfill the shortfall, minimizing the total cost of meeting service demand. MONITOR AND MANAGE SUPPLY CHAIN PERFORMANCE IN REAL TIME Oracle Value Chain Planning puts key decision makers in charge by enabling them to analyze high level demand and supply trends and metrics. Key managers as well as planners can leverage the embedded analytics to quickly analyze the root-cause of problems. Prebuilt dashboards and reports enable slicing and dicing of planning information across key dimensions and at various levels of aggregation. In addition, you can directly drill-down, in context, to the powerful planning workbenches to simulate possible solutions or take actions. Configurable alerts enable decision makers to proactively respond to deviations in performance and focus on the immediate problems. Oracle Value Chain Planning helps you orchestrate planning processes that span demand management, inventory optimization, sales and operations planning, network design, and supply planning by leveraging web services. This web services-based approach enables Oracle Value Chain Planning to support systemic operational improvements in a wide variety of functional areas through integration with other applications – even in highly heterogeneous application environments. You can also include approval and review steps to ensure proper manual intervention where needed. 6
  7. 7. ORACLE DATA SHEET KEY BENEFITS LEVERAGE MODULAR AND OPEN ARCHITECTURE FOR QUICK ROI KEY BENEFITS: Oracle Value Chain Planning leverages the scalability and security of Oracle’s RDBMS • Provide business insight for executives and monitor and Fusion Middleware technology to provide an open architecture that can deployed performance based on real- ,integrated and out-of-the-box, with Oracle E-Business Suite or with heterogeneous time information back-end systems. • Predict market requirements and manage The modular architecture also enables you to start your implementation with any supply chain risk product, helping you to address your most important business problem first. Additional • Shape demand for profitability products can be plugged in quickly as you gradually extend your solution and leverage • Align operational plans with the same platform foundation, avoiding expensive reconfiguration and modifications. corporate goals For example, you can decide to start with improvements to your demand management • Deploy stand-alone or integrated with Oracle ERP process because you have a forecast accuracy problem, and then implement constrained • Leverage the modularity of supply planning or a sales and operations planning process. the solution for incremental deployment SUMMARY Oracle Value Chain Planning offers an industry leading and unique solution for RELATED PRODUCTS: customers that need a competitive edge in today’s continuously changing business • Oracle® Demantra: conditions – it enables companies to efficiently design, plan, and service their value Demand Management, Advanced Forecasting and chains from ‘factory to shelf’. By offering a solution that seamlessly integrates Demand Modeling, Real- analytics, statistics, and optimization Oracle helps you to more accurately predict Time Sales and Operations market demand and supply chain risk, shape demand for profitability, and align your Planning, Predictive Trade Planning, Trade Promotion operational plans with your corporate goals. In addition, key decision makers can Optimization, Deductions monitor and manage supply chain performance interactively and on a real-time basis, and Settlement Management enabling you to proactively analyze and solve supply chain problems. The secure, open, • Oracle® Advanced integrated, and modular architecture enables deployment in heterogeneous Planning Command Center environments, helping you to start quickly for fast return on investment, while • Oracle® Advanced Supply deploying solution components at your own pace. Chain Planning • Oracle® Collaborative Planning • Oracle® Demand Signal Repository • Oracle® Global Order Promising • Oracle® Inventory Optimization • Oracle® Production Contact Us Scheduling For more information about Oracle’s Value Chain Planning solution, please visit • Oracle® Service Parts or call +1.800.ORACLE1 to speak to an Oracle representative. Planning • Oracle® Strategic Network Optimization Copyright ©2008, Oracle. All Rights Reserved. This document is provided for information purposes only, and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor is it subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document, and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission. Oracle, JD Edwards, PeopleSoft, and Siebel are registered trademarks of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners 7