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Turn Service Supply Chain into Profits with Value Chain Planning. Moshin Lee, Sr. Director, Oracle Value Chain Planning Product Management Graham Reid, Oracle Global Process Owner, Spares Planning.

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turn service supply chain into profits with value chain planning
Turn Service Supply Chain into Profits with Value Chain Planning

Moshin Lee, Sr. Director, Oracle Value Chain Planning Product Management

Graham Reid, Oracle Global Process Owner, Spares Planning

slide2

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.

program agenda
Program Agenda
  • Evolving to best in class service parts and MRO planning with Oracle VCP
  • Development Roadmap
  • Case Study: Oracle’s use of VCP for service parts planning
slide4

Oracle Value Chain Planning Solution

Customers

Retail Stores

COLLABORATION SERVICES

Suppliers

Distribution

Centers

Contract

Manufacturers

Carriers

Demand Sensing

Value Chain Networks

  • Common foundation
  • Single source of truth
  • Centralized services
  • Start anywhere, redo nothing

Planners

Analysts

INTEGRATION SERVICES

Planning

Data

Management

Scenario

Planning &

Analytics

Engineered

Systems &

Solutions

Planning

and

Optimization

Asset Intensive

and Parts Planning

Strategic

Planning and

Postponement

Hyperion

Legacy Systems

Supply and

Distribution

Planning

Siebel

Demand and

Trade

Management

Sales and

Operations

Planning

E-Business Suite

PeopleSoft

JD Edwards

slide5
Maintain, repair, and overhaul complex equipment and installations

Repair work order hierarchies

Rotables and serialization

Long range and operational planning – Balance material, resources and budgets

Plan new buys, internal and external contractor repairs; plan maintenance repair schedules

CMRO and EAM based execution

ASCP/DM/IO/PS/GOP – CMRO/EAM integration: Korean Air

Service and Maintenance Planning solutionThe Oracle difference: The right solution for the right problem

DISTRIBUTION CENTRIC

REPAIR CENTRIC

ASSET INTENSIVE

  • Multi-echelon distribution with rebalancing and fair share allocation
  • Standard catalog driven parts, no part condition; standard bills
  • Standard work orders for assembly, new buy orders
  • Forecasting and replenishment, with optionally inventory optimization
  • ASCP/IO/DM: CARQUEST, Orbotech
  • Use part condition (“usable”, “defective”)
  • Internal and external repair
  • Part criticality matrix linked to forecasting rules
  • Optimize redistribution and replenishment
  • Account for supersession (repair to) in forecasting and replenishment
  • Unified forecasting and replenishment UI
  • Release recommendations to Depot Repair and Spares Management
  • SPP/DM/IO: Oracle, Virgin Media, Virgin Mobile, Huawei, Teradata
slide6

Improve spare parts planning

  • Support intermittent demand patterns
  • Leverage highly accurate Bayesian engine
  • Population and failure rate based forecasting
  • Forecasting based on supersession
  • Analyze and fix exceptions
  • Supersession-based planning
  • Plan reallocation and transfer of parts
  • Plan internal and external repair before new buy
  • Release planning recommendations to Execution
  • Single UI for forecasting and replenishment
  • Part and supersession chain centric analysis
  • Zone and enterprise views
  • Planner work lists
  • Personal and public queries
  • Auto-release rules
  • Parts Forecasting
  • Replenishment
  • Analysis
slide7

Integrated planning and execution

Reduce cost via pre-built integration

  • Execute to plan
  • Global parts inventory visibility across all service organizations
  • Out-of-the-box integration with Oracle Spares Management and Oracle Depot Repair
  • Release depot repair orders, reschedules, and transfers
  • Release spares management new buy purchase orders, repair orders, and transfers
  • Improve planner productivity through automation of release
  • Execute internal and external repairs
slide8

Service planner workbench

Work list driven actions

Supersession

Integrated demand and supply planning

Pegging view

slide9

Evolve to best in class spare parts planning

  • Forecast new service level agreements at customer and customer site level
  • Forecast new parts based on part characteristics
  • Centralized demand management for service and manufacturing
  • Enable simultaneous forecasting of end items and spare parts
  • Consider causal factors
  • Analyze impact of new service level agreements on safety stock policies
  • Simulate the impact of inventory budget reductions
  • Simulate trade offs between service levels and cost
  • Manage postponement decisions across all service facilities
  • Monitor service level agreement adherence
  • Monitor repair versus new buy trend patterns
  • Review service parts inventory performance
  • Compare plans and trends over time
  • Involve key managers
  • Advanced Forecasting
  • Multi-echelon postponement
  • Plan analytics
evolve optimize spares stocking
Evolve – optimize spares stocking
  • Account for detailed service level and fulfillment lead time targets
  • Deploy inventory to meet entire SLA portfolio
  • Account for repair, lead time, space, budget constraints
  • Simulate SLA scenarios
  • Minimize SLA portfolio cost

99%, 2 hours

97%, 4hours

92%, 24hours

slide11

Evolve – Monitor parts planning performance

  • 360 degree visibility
  • Monitor service level agreement adherence
  • Monitor effective use of repairable parts before buying new
  • Compare changes between plans and analyze trends
  • Analyze spare parts inventory performance
slide12

Asset Intensive Planning with VCP

Prebuilt integration with EBS CMRO and EAM

  • Integrated maintenance scenario to support total cost of fleet operation – CMRO Unit Maintenance Plan, EAM Budget Forecast, Demantra non-Maintenance Forecast, ASCP Planned Repair Orders
  • Projection of resource utilization – Global, organization, department
  • Projection of total material requirements – Calculate retention levels and justify disposal actions
  • Projection of maintenance cost
  • Calculate planning factors
  • Scenario planning: select specific CMRO product classification (simulations) and EAM budget forecasts as basis for planning
  • Match defective demands with defective supplies
  • Plan repairs of complex subassemblies and components
  • Plan purchases, internal maintenance, and contractor maintenance
  • Consider repair capacity and material availability
  • Consider CMRO and EAM repair BOMs and routings
  • Consider resource (equipment) downtime due to preventive maintenance
  • Maintenance scenario planning and S&OP
  • Balance supply and determine repair
slide13

Asset Intensive Planning with VCP

Prebuilt integration with EBS CMRO and EAM

  • What is the non-routine material and resources associated with a Maintenance Requirement (MR)?
  • What is the total material and resources associated with a components item’s repair?
  • What is the difference between Engineering failure rates and actual failure rates?
  • What are the material and resources associated with flight operations?
  • Calculate planning factors based on non-routine resource and material requirements and incorporate into CMRO MR definition
  • Supports routine historical analysis contrasted to CMRO Engineering definition
  • Forecast non-UMP visit forecast and leverage to build flight schedules in CMRO (pre-flight, post-flight and transit visits are not contained in Unit Maintenance Plan)
  • Planning Factors – Business needs
  • Solution
slide14

Asset Intensive Planning with VCP

Prebuilt integration with EBS CMRO and EAM

  • Which visits are early, on-time or late and why?
  • What tasks are on the critical path?
  • What is the total machine, crew, and tool utilization across visits, or for a specific visit?
  • How much of the utilization is associated with routine versus non-routine work?
  • What is the impact of taking down production equipment for maintenance? What is impact of rescheduling the EAM maintenance?
  • What is the average visit duration by visit type (PDM, Engine Overhaul)?
  • How can Visit throughput be maximized?
  • Schedule CMRO Visits taking into account visit dates, milestones, task hierarchies, and prec. constraints
  • View CMRO work breakdown structure and critical path
  • Schedule Visits while considering EAM preventative maintenance
  • Override EAM preventative maintenance
  • Model key constraints on the shop floor (crew, machine, tool – capacity and calendars)
  • Manually re-sequence visits
  • Respect inventory reservations
  • Constrain dates based on outside processing schedule
  • Create multiple simulations and compare (on time, now late, KPIs)
  • Maintenance Scheduling – Business needs
  • Solution
asset intensive planning with vcp process flow
Asset Intensive Planning with VCPProcess flow

Resource utilization

Total cost

Non-UMP visit forecast

Detailed maintenance schedule

Planning factors

VCP Demand Management and S&OP

Complex Maintenance Repair andOverhaul

Historical and projected fleet size

Historical and projected fleet utilization

Historical visits and usage

History for non-maintenance products

Visits and

Visit WBS

Enterprise

Asset

Management

Order

Management

Historical EAM usage

Adjusted

WO dates

Forecast for non-maintenance products

Planned maintenance requirements & Planned UMP and Production Visit Work Orders

Rebuildable activities, WOs, and Forecasted WOs

Total material requirements Demand variability

Work

Orders

ASCP plan results (material and

resource

requirements)

VCP Advanced Supply Chain Planning

VCP Inventory Optimization

VCP Production Scheduling

Service levels

Budgets

Target SS

Planned repair orders

Time phased SS

Planned orders

slide16

Maintenance scheduler workbench

Schedule around preventative maintenance

Analyze key performance indicators

Analyze maintenance schedule exceptions

Analyze critical path

recent updates and future plans service and maintenance planning
Recent Updates and Future PlansService and Maintenance Planning

VCP 12.2.2.3.1

12.1.3.7 and Demantra 7.3.1.3

12.1.3.9 and Demantra 7.3.1.5

  • Asset Intensive Planning
  • Material planning for complex maintenance
  • Asset material planning for equip maintenance
  • Maintenance detailed scheduling (critical path)
  • Long term maint forecasting tied to fleet fcst
  • Inventory Optimization
  • Warehouse capacity
  • Service Parts Planning
  • Sourcing priorities for inventory rebalancing
  • Service Planning Analytics (APCC)
  • Performance enh (archive plan)
  • Inventory Optimization
  • Category level service level targets
  • Unified planning and analytics
  • Extreme intermittency enh
  • In-Memory applications R2
  • Front port of 12.1.3.9
  • Front port of Dem 7.3.1.5
  • Technology upgrades

2014

2012

2013

  • Asset Intensive Planning
  • Aggregate work order support
  • Service Parts Planning
  • Reserve safety stock
  • Service Parts Planning (candidates)
  • Maximize repair vs. demand lateness tradeoff
  • Replenish before rebalancing
  • … and more

12.1.3.8 and Demantra 7.3.1.4

VCP 12.2.4

oracle internal implementation
Oracle Internal Implementation

Deploying Value Chain Planning for Hardware Spares

  • Oracle Hardware Support Overview
  • Implementation footprint
  • Service Supply Planning Process
  • Benefits Achieved
  • Lessons Learned
  • Looking Forward
oracle systems support overview
Oracle Systems Support Overview
  • 167 product lines
    • 17K unique spares
    • 376 spares Inventory Organizations
    • 2.6M item-org combinations
  • 285 physical warehouses
  • 4600 employees in Systems Support
  • $2.4B systems Support Revenue
slide22

Oracle Spares Warehouse Distribution

T2 - 7

T3 - 76

Leipzig

T1

Lockbourne

T1

T2 - 83

T3 - 58

T2 - 17

T3 - 54

Miami

T1

T2 - 11

T3 - 15

Singapore

T1

slide24

Oracle Spares Planning with VCP

Right Part, Right Place, Right Time at the Right Cost

  • Disparate, local planning, procurement, stocking and repair processes
  • Disjointed view of inventory levels, purchasing activity and delivered level of service
  • Focus on Service as a profit center
  • Implement a single, global VCP solution
  • Single source of truth
  • Utilize intelligent forecasting, optimized stocking strategies to drive lowest cost of operations while increasing level of service
  • Business Challenges
  • Solution
oracle hardware spares supply chain vcp footprint
Oracle Hardware Spares Supply ChainVCP Footprint

Value Chain Planning

Collections

Items/BOMsSourcing Rules

Purchase Orders

Repair Orders

Shipments

Suppliers

Customers

Order Types

Demand Class

Organizations

Inventory

Locations

Contracts

Supersessions

DemantraDemand Management

Service Parts Planning

Orders

Buy

Repair

Transfer

Inventory Optimization

Advanced Planning Command Center

E-Business Suite - Global Single Instance

key success factors
Key Success Factors
  • Shared vision and cross-functional executive sponsorship
  • Invest in process governance
  • Define global, standard process
  • Align business process with application technology
  • Data validation & migration
  • Change management
reverse supply chain transformation
Reverse Supply Chain Transformation

Results

  • Spare parts inventory $800 million to $400 million
  • MAPE improved by 20% , BIAS down to single digits
  • Backorders reduced by 50% , Service level @ 90+%
  • Risk pooling used in Inventory Optimization
    • $20M reduction in spare parts safety stock
  • Improved collaboration across Support organization
  • Better decisions based on a single source of truth
looking forward
Looking Forward
  • Differentiated Stocking Strategies
    • Rationalize placement of non-critical spares to maximize risk pooling
    • Focus on high value, critical spares close to point of use
oracle value chain summit
Oracle Value Chain Summit

Empowering the Modern Value Chain

Explore How New Solutions Within Social, Mobile, Analytics & the Cloud are Helping Companies Transform Supply Chains into Modern Value Chains

  • February 3-5, 2014 – San Jose McEnery Convention Center
  • Hands-on workshops, solutions demonstrations & more than 200 sessions on topics in 6 complementary solution areas: Product Value Chain, Manufacturing, Enterprise Asset Management, Logistics, Planning & Procurement
  • Early bird registration opens soon – www.oracle.com/goto/VCS14