Process Manufacturing Development Update Russ Bayles, EBS Manufacturing Product Strategy Manager

1. Process Manufacturing Development Update Russ Bayles, EBS Manufacturing Product Strategy Manager

2. 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 relied upon in making purchasing decisions.The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

3. Agenda • OPM Development Update • R&D Investments • Future Direction • MOC

4. Continued Investment for Process Industries 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 NewRecipes Prod Data Mgmt Release OPM 11i MOC for Process Mfg. PIM* Oracle Process Mfg (OPM) Release 11Oracle Technology POS Integration High Volume Order Processing ASCP* LCM for Process Mfg. Order Mgmt Demand Planner 1SYNC Cert Deduction Mgmt Customer Data Mgmt Sales Contracts Advanced Pricing Datalogix Acquisition Promo Fund Mgmt DemantraAcquisition Global ATP MES for Process Mfg. Trade Mgmt UCC Net GDSN G-LogAcquisition AgileAcquisition RFID Transactions Maintenance Mgmt SiebelAcquisition Psft/JDEAcquisition * ASCP = Advanced Supply Chain Planning * PIM = Product Information Management © 2008 Oracle Corporation – Proprietary and Confidential

5. R12: Update

6. OPM R12 Customer update • Live OPM – 53 • New Installs – 48 • Upgrades – 5 • 3 migration • 2 re-install • Current R12 Implementations: • R12 in progress - 14 • Upgrading - 9

7. Summary of OPM R12 Features Common Inventory Dual unit of measure control Advanced lot control Material status Enhanced inventory allocation rules Migration Scripts Views for historical data Process Product Development S88 Compliant Org Structure Item Revisions Least Cost Formulation Ingredient Substitutions Regulatory Integration to Third Parties Process Quality Enhanced receiving inspections Corrective action request and processing Process Execution Item Revisions Reservations Move orders More MSCA transactions Dispatch List MES for Process Manufacturing Batch Journal/Electronic Batch Records Dispensing and Pre-weigh Label Management Deviation Management Improved UI/ Processing instructions

8. Resource Dispatch Report

9. Post - R12: Update

10. Summary of OPM 12.0 RUP Features MES for Process Manufacturing Touch Screen Dispensing Supervisor Workbench (Dispense Planning) Process Execution LPN Support in Desktop Forms Fixed Process Loss Regulatory Extended Regulatory Data Support Process Quality LPN Support in Desktop Forms Common Inventory Intercompany Shipping Flows for Process

11. Touch Screen Dispensing Single screen, step by step processing, reducing processing time and risk R12.0 - RUP • Touch Screen design • Bold Graphics to view status across room • Process guides operators through work instruction view, progress reporting, and material • consumption tracking • Integration to Scales and other devices • Check in – check out locks operation • Electronic Signatures • Quality data collection and lot data capture for genealogy Complete Process Support for Work Instruction Display, Dispensing, Batch Progress Tracking, and Ingredient Consumption Reporting

12. Supervisor Workbench (Dispense Planning) Graphical Mode R12.0 - RUP Display Bucket (Daily / weekly) Dispense Planning details at Area/booth, Resource, Storage Area Dispense Capacity Plan Vs Actual

13. LPN Support in OPM Desktop Forms Streamline operator actions through online support of container management LPN Support added for Item Reservations for Process organizations LPN Support added to Select Available Inventory LPN Support in the Batch Material Transactions form LPN Support added for Item Samples, LPN Support added to all of the Sample Group related forms Support of Delayed LPN Entry added for Quality Samples, independent of Delayed Lot Entry. R12.0 - RUP 13

14. Fixed Process LossAdjust batch quantities to account for material loss due to changeovers R12.0 - RUP • Fixed Process Loss represents the production loss quantity that is fixed irrespective of the quantity of product being produced or ingredient being consumed. For example, residual material left in pipelines during production changeovers. • Fixed Process Loss can be defined in Routing Class, Routing, Recipe and Recipe validity Rules levels, with the default values coming from the level above, similar to Variable Process Loss. • The Fixed Process Loss is applied after calculating the variable loss and it is added to the ingredient quantity or reduced from the product quantity. 14

15. Extended Regulatory Data Support Provides the ability to define, import and store user-defined Regulatory data values R12.0 - RUP • Users can create new field names, field name classes, and field name properties and then enter organization specific values for the new field name properties against a Regulatory item. • Users can associate text based risk and safety phrases to organization specific Regulatory items. • Users can maintain property values in multiple languages without the installation of the languages in the application . • Users have the ability to create new field names, field name classes, field name properties, risk phrases and safety phrases through the use of APIs. 15

16. Intercompany Shipping Flows for Process Simplified Financial processing through automatic creation of Invoices R12.0 - RUP • Users can identify the chain of operating units and associated inventory organizations involved in the costing, transfer of liability, and revenue so intercompany invoices can be automatically created when material is shipped from source to destination. • Users can define logical transactions that may differ and be independent from the physical flow of goods • Users can define different accounts for Trade and Intercompany COGS and Sales Revenue to eliminate intercompany profits • Users can leverage Advanced Pricing to define which rules, based on price list, are used to derive the invoice price for an item. 16

17. R12.1: Update

18. Summary of OPM 12.1 Features Process Execution Make to Order Multi-Batch Actions Process Financials/Costing Costed IBOM Report Regulatory Regulatory Partner Certification Process Planning OPM Batchable Resources Common Inventory Lot Genealogy Enhancement On-Hand Material Status

19. Make to Order - Process Manufacturing Reduce Lead Time by Linking Supply and Demand Directly Create a FPO/Batch from Sales Order Rules based Order creation Automatic reservation of supply to demand Workflow based messaging to production R12.1

20. Group Multiple Batches for Mass ActionsIncreased productivity for batch flow transactions Grouping multiple batches for a user selected criteria Simple and user friendly window to perform select action on a group of batches Mass transact batches for all Batch actions Release, Complete, Close, Un-Release, Re-Open, Revert to WIP, Auto Detail R12.1 Check off batches Select Action Execute Change

21. Robust cost reporting capability with drill-down to costing data from summary to cost component and item level details with multiple views Granular view of the costs, enables management to control costs and measure efficiencies Costed Indented Bill of Materials ReportProvides sound basis for performance management, control by exception reporting and establishing product margins R12.1

22. OPM Batchable Resource Increase efficiency of resource usage Define OPM Plant Resource as Batchable Batchable Resource in ASCP and Production Scheduling Plan & Schedule multiple batches together in a resource User defined attribute values, temperature, color, duration Min/Max spot capacity Pull forward window R12.1

23. Lot Genealogy Enhancement Faster access to information through improved form navigation Refresh Genealogy Tree with a different top level node, no longer needing to go back to the query window Expanded levels of detail in the Navigator Window R12.1

24. On-hand Material Status Streamlines material handling, supports separation of material handling and quality control roles Allows strict separation of responsibility between material transfer and status update, with material movement maintaining current status Allows multiple statuses for a lot in different locators AND multiple statuses for different lots in the same locator Track and update status of material at the on-hand level (e.g. item/subinventory/locator/lot combination) Track material status for the contents of a LPN R12.1 Loc: RECV Lot A: QCHOLD Lot B: QCHOLD Loc: MFG-STAGE Lot A: USEATRISK Lot C: ACTIVE

25. R12.1.2 Update

26. Summary of OPM 12.1.2 Features User Interface Improvements Landed Cost Management Integration

27. User interface improvements • Redesigned Home Page • Navigator and Favorites Links added to global header • Look-ahead LOV enhanced to become suggestive • Inline list appears after user types in 1 or more characters and pauses • Up to 200 rows are shown at a time with scrolling • Inline list can be further filtered on typing more characters • InlineText Attachments

28. US Port Shipment to HK HK Port Vessel Carrier Kansas City $2 $3 $20 $140 Oracle’s Landed Cost Management • Oracle’s Landed Cost Management application is a new product released on EBS r.12.1. • Oracle Landed Cost Management captures extended supply chain costs (freight, insurance, duties, taxes, etc.) and attributes them back to the products which incurred them • Costs can be estimated during PO creation and receiving • Actual costs calculated when invoices arrive to identify variances • Receiving estimates and any variances automatically update inventory valuation and accounting Issue PO Customer China Manufacturing Buyer Duties Broker Fees $5 $5 $100 $3 $2 Total Landed Cost An additional 40% is added on to the purchase price

29. Landed Cost Functionality for OPM • Support of Landed cost for all receiving transactions • Receive • Correction • Return • Support LC adjustments • Actual Cost Process • Lot Cost Process • Introduced new Profile GMF: Landed Cost Adjustments Transfer Method to Inventory In Actual Costing with • Apply whole LC Adjustment to Inventory • Apply LC Adjustment based on the Period Opening Balance • Post LC Adjustment journal entries in OPM Accounting Pre-Process • Introduced New event types: • LC Adjust Deliver, • LC Adjust Receive, • LC Adjust Expense Deliver • LC Adjust Valuation

30. Future:

31. Outsourced Manufacturing and Outside Processing PLM Integration – A9 and PLM for Process Support for Lean Manufacturing Concepts independent of Flow Manufacturing Product Make generic concepts available to other Mfg methods eKanban / Kanban Scheduling Lean Accounting Analytics Continued investment in MOC Manufacturing BI More Mobile Supply Chain Apps for Process Industries Future R&D Investment Considerations Selected Key Initiatives

32. Now Recruiting R12 Customers for OPM CAB Overview • Average of 15-20 customers per CAB • Management level of typical member: Manager/Director • Number of meetings per year: • In person: 1-2 • Virtual: 1-2 • Managed by Oracle’s Product Management and Strategy Organizations Strategic Tactical

33. _ • _ • _ • _ CAB Benefits Benefits to Customers • Direct influence on product designs and direction. • Direct contact with product team. • Inside track on future functionality and releases to help plan implementations better. • Knowledge of industry best practices from participating companies. Benefits to Oracle Development • Direct customer feedback on product requirements and designs. • Develop relationships for customer references. • Feedback on competing solutions. • Develop relationships for customer references. • Customer quotes for marketing materials.

34. CAB Member Selection Criteria • Has licensed and implemented (or in the process of implementing) a current version of an Oracle Applications product or products. • Must sign the Oracle Confidential Disclosure Agreement. • Required to participate in both sales and marketing reference activities with Oracle. • Has commitment and sponsorship of Customer’s executive management. • Willing to travel at own expense to CAB meetings.

35. Q & A Q U E S T I O N S A N S W E R S