Why To Upgrade To ASCP From MRP

 

Why upgrade to Advanced Planning 11i?  An Oracle White Paper (Short version)  March 2003

 

 

Why upgrade to Advanced Planning 11i?

INTRODUCTION

Oracle Applications has been delivering high quality planning applications for over a decade. More than 2000 companies have been successfully using  planning applications from Oracle to plan their supply ch chains ains and improve their operations. This paper describes incremental benefits that can be gained by upgrading to Oracle’s 11i Advanced Planning applications, and provides step by-step recommendations recommendations on how to start leveraging an evolved evolved planning foundation for your current and future business. Oracle Advanced Planning

Oracle Advanced Planning provides a completely integrated planning solution that spans demand planning, inventory optimization, supply chain and manufacturing planning, global order promising, collaborative planning, exception management, management, and supply chain intelligence. It addresses the common issue of having to deal with multiple disconnected planning processes that are difficult to synchronize and that have no visibility to customer requirements and supplier commitments. commitments. Oracle Advanced Planning reduces the complexity of synchronizing many plans by providing a collaborative, holistic, e-business  planning process that includes includes your trading partners, dramatically dramatically reduces the overall planning process cycle time, and improves the quality of plans.

ASCP Optimized IO GOP

Constrained

CP Unconstrained DP MRP

APS Common Infrastructure

Oracle Applications (10.7, 11.0, 11i)

 

Oracle Advanced Planning offers so many new features and options to customers upgrading from previous versions of Oracle planning products, that it may seem overwhelming. overwhelming. Not all customers may be ready to overhaul their complete planning processes. You may also be wondering where to start, and what to take advantage of first. Over the next few sections we will attempt to take a more incremental approach to describing the new capabilities and benefits  provided by Oracle Advanced Advanced Planning, and provide some ideas that may may help in prioritizing an upgrade path including how to: 

Leverage Oracle Advanced Planning’s backwards compatibility compatibility by running it directly against a 10.7 or 11.0 release of Oracle Applications

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Implement one or more Advanced Planning products in a modular way while taking advantage of the tight integration across all planning  products.

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UPGRADING TO ORACLE ADVANCED SUPPLY CHAIN PLANNING (ASCP)

The most logical place to start your upgrade path is unconstrained planning, which is offered by Oracle Advanced Advanced Supply Chain Planning (ASCP). Oracle ASCP perfectly covers your existing MRP planning processes, yet provides increased benefits with minor additional investment.

Capabilities

ASCP

Master Production Scheduling

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Rough Cut Capacity Planning

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Material Requirements Planning

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Capacity Requirements Planning

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Mixed mode manufacturing support

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Plan all locations, all manufacturing methods, all planning time horizons (short to long term) in a single plan

"Oracle Advanced Planning gives us more time to run our day to day business operations. Instead of dedicating an internal team to  generate updated inputs and running manual tools, we simply generate one plan from which to execute." - Keith Palevsky, Director Director of Business Operations, Primarion

MRP

Plan at aggregate level as well as detailed level in one plan, for each plan time period

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 New productivity enhancing user interface

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Problem solving and analysis tools

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Audit trail and undo

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Advanced reporting

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In line forecast consumption

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Supply chain planning

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Integrated performance management

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Integration with Oracle Process Manufacturing (process support) and Oracle Shop Floor Management (semiconductor support) Component architecture

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While Oracle MRP is a solid product, that has been successfully deployed for many years, it does have some s ome limitations. Oracle ASCP provides all of the features of MRP, and much more. ASCP was developed with MRP as a starting point – to ensure a smooth s mooth transition for existing customers – and was enhanced to provide many of the additional features that our customers requested over the years.

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Many customers start out by using ASCP in an unconstrained mode. In unconstrained mode, ASCP will behave similarly to Oracle MRP or Oracle SCP and the planning output will be exactly the same, ensuring a smooth transition to a new and improved improved planning foundation. foundation. ASCP also provides significant significant improvements improveme nts to address three common MRP problems:   

How can I reduce my end-to-end planning cycle time? How can my planners make better and faster decisions? How can I implement implement a more scalable infrastructure?

Reducing End-to-End Planning Cycle Time

Running fewer plans faster enables you to reduce end-to-end planning cycle time. Oracle ASCP provides a holistic planning planning approach that allows you to simultaneously plan all facilities, all time horizons (days, weeks, periods), all material and all resources, using flexible aggregation levels, in a single holistic  plan. In addition, multiple planners planners can analyze the output of a plan at th thee same time and perform individual changes and simulations, while preserving the integrity of the overall solution. solution. Finally, we obsoleted separate planning planning steps where applicable. For example, forecast consumption consumption now runs inline with  planning. Better and Faster Decisions by Planners

Oracle ASCP was developed from the start with planners’ productivity in mind and has continuously evolved over over the years. Planners can leverage the unique unique features of the new horizontal and vertical plan views, drill down to related exceptions, use a configurable planning detail report and a plan comparison report, as well as graphics and many navigational improvements through context-sensitive right-mouse clicks, to speed up to analysis of planning output. In addition, we embedded workflow throughout to allow automation of many  planning tasks. Last but not least, we allow planners planners to make decisions that aare re in line with overall business objectives by providing embedded performance indicators in the planner workbench. Increased Scalability and Performance through Database-centric Planning

Planning cycle time is a key factor that controls your organization’s ability to quickly respond to problems in your supply chain. Recognizing that, a lot of emphasis has been placed on further improving the performance of the Oracle ASCP planning processes beyond what Oracle MRP or SCP offer. Oracle ASCP uses a patented database-centric architecture and has been optimized to leverage the architectural improvements improvements provided by Oracle RDBMS 8i and 9i such as  partitioned tables, materialized materialized views, autonom autonomous ous transactions, and so on. This ensures that the planning process spends the least amount of time to move the data in and out of database, which significantly reduces planning cycle time. For instance, the Snapshot program that took several hours to complete with Oracle MRP now completes in a fraction of the time.

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How to Get There

One logical question at this point would be: “If I’m an existing Oracle customer and already use MRP, what would it take to start using unconstrained ASCP?”. First, you need to install ASCP, which can be done in two ways, using the 11i rapid install process:  ykrolis went from using 10.7  RP to using unconstrained ASCP and implemented in 30 days. “Mykrolis processes approximately 3,000 orders per day. Before Oracle, 70% of these were delivered on time, but with Oracle this rate has improved to over 90%. The Oracle solution provides our planners with instant access to  global information, and simulation simulation tools for reacting to changing market conditions. The result is more accurate plans, fewer errors, and improved bottom line service to our customers” – Mike Dapcic, CIO Mykrolis Corporation

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If you want to deploy ASCP against Release 10.7 or Release 11.0 (source), you need to install ASCP in a separate 11i instance (destination); during installation, we create the additional attributes on the source as well as link one or more sources to the destination system

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If you want to deploy ASCP against Release 11i (source), you have the option to either install ASCP in the same instance, or to create a separate planning instance (often done when performance and scalability are of concern); in case of a separate source, we also link the source to the destination system If you deploy a mix of 10.7, 11.0, and 11i source systems, you will install ASCP in a separate 11i instance; we create the additional attributes in the 10.7 and 11.0 source systems, and you define the links  between source and destination destination in the same way.

Once the instance has been defined, there is a concurrent program called Data Collection that needs to be run. This takes a snapshot, in net-change mode, of transactional data for planning. To start running plans, you define a plan name, set up the plan options, and run your plan. The definition and launching of a  plan is identical to in Oracle MRP, with some some additional options that can be used. These are the only steps required to implement unconstrained ASCP! 

Starting with a new, stronger foundation as the basis for your future

Upgrading to Oracle Advanced Supply Chain Planning could also be the first step towards using some of the other new products in the Advanced Planning Solution. Not all customers implement these products in the same s ame order. To determine what the logical step might be, you need to look at where the pain  points in your business processes are, and where you can can receive the most  benefit. The rest of this paper will discuss discuss the other components components of Oracle Advanced Planning and what benefits they can bring to you.

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CONSTRAINT BASED OPTIMIZATION

“The most exciting feature of the system to a manufacturer is constraint-based planning. Oracle provides the ability to lan, including resource and material constraints, based on  suppliers’ capacities”inventories – Mr. V.A.and Raghu, anaging Director, Tube  Investments Ltd.

If your most urgent problems is to deal with various constraints in the supply chain planning process, like the use of alternate suppliers, components, substitute items and other material and resource constraints, you should invest and move towards constraint constraint based planning. If you want to weight cost and  profit, as well as inventory turns as strategic strategic objectives, and you want to leverage the use of penalties to weigh which (short) supply should be allocated to which (prioritized) demand, you should implement optimized planning.The Constraint Based Optimization (CBO) option for ASCP is designed to let you grow at your own pace and add new features when you are ready, and provides solutions to planning problems that are completely absent in MRP. Constrained Planning

Constrained planning lets you create feasible plans that take into account your resource and material constraints. You can control which constraints are considered, and in what time horizon they are to be considered. For example, in the short term you may be constrained by both resources and material, while in the longer term you could plan to hire or negotiate for more material from suppliers. Constrained planning, or finite scheduling, also lets you know immediately immedia tely what orders are liable to be delayed due to your constraints, as well as what needs to be done to resolve the issues. Key features to consider ar are: e: 

Automated choice of alternatives – use alternate resources, substitute components, alternate bills of material and routings, alternate facilities, alternate suppliers, and substitute products.

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Detailed scheduling - create detailed (to the minute or hour) schedules that you can be executed on your shop floor and use scheduling features like batch resources, simultaneous resources, and minimum transfer quantities

Optimized Planning Optimization For Planners, Not Programmers™

Optimization will help you make more profitable decisions. Optimized plans take costs and profit into account to determine the best possible planning decision. To ease the level of comfort with optimized plans, planners can start using the out-of-the-box optimization capabilities, supported by extensive defaulting of penalties - without any any coding. The definition of the optimization optimization  parameters is presented presented in clear and understandable busi business ness terminology and the extensive defaulting does not require planners to define all costs and  penalties at all levels levels in the system. Instead, they can fine-tune as the they y go and as they become more familiar with the optimized plan results and the related data accuracy.

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DEMAND PLANNING

If your current demand planning processes don’t provide you the capability to collaborate on a consensus demand number that will drive all your downstream  planning processes, you should consider implementing implementing Oracle D Demand emand Planning.

 Intersil conservatively conservatively estimates that it will see a $13 million benefit over 5 ears and the projected ROI over 5 years is 246%. “Oracle Advanced Planning

We focused on three key areas in improving demand planning processes:

has taken Intersil’s business rocesses to the next level, allowing us to reduce the time and cost of our demand lanning efforts, which ultimately makes us a better  supplier to our customers” customers” –  Don Cross, Director of Operations Planning and Customer  Service, Intersil Corporation 

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Achieving consensus demand Improving forecast accuracy Manage events, promotions, and new product introductions.

Achieving Consensus Demand

Demand planning is more than forecasting. Demand planning is the collaborative process of generating consensus among all of the stakeholders in the demand planning process. Oracle Demand Planning provides a robust web based OLAP architecture to to allow you to gather and consolidate all the sources of demand information, including sales forecast, marketing forecast, manufacturing forecasts, customer forecasts, events and promotions, new  product introductions, and point of sale data data into a central place. You can see, manage, report, and manipulate your data along multiple user-definable dimensions and aggregation levels, without reorganizing the data, manage and compare an unlimited number of scenarios that can represent multiple views of the forecast, or perform what-if simulations. Customizable alerts can be triggered and their resolution and escalation can be automated as required since they are workflow enabled. Improving Forecast Accuracy

Oracle Demand Planning provides robust support for statistical s tatistical forecasting and consolidation of quantitative quantitative and qualitative data. Statistical methods methods for generating forecasts include moving averages, exponential smoothing, HoltWinters, seasonal adjustment, adjustment, and linear and non-linear non-linear regression models. A forecast wizard guides demand planners through the choice of products, dimensions, demand streams, and time horizons to be included in the plan and also assists in picking the forecasting method that best fits the historical demand  pattern for each item and dimension to be forecast. forecast. Manage Events, Promotions, and New Product Introductions

Oracle Demand Planning allows you to define and manage events and  promotions. You can define lift lift factors that represent the effe effect ct of the events. Events can be assigned along any dimension in your demand plan. For example, you may have a promotion that will only affect a family of products in one geographical region. 

Baseline demand forecast Promotion event planned Total demand forecast

time-- t1 time

t2 t2

 

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In addition, you can model new products based on the life cycle of existing  products, or you can model new products products or versions that supersede existing  products. You can also represent how your new new products phase in and phase out.

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GLOBAL ORDER PROMISING 

“We now have the ability to see when the product really will be available so we can give the customer valid promised ship dates. We also have the stability to ship from any manufacturing  site directly to any customer, which was very difficult with our old systems” – Randy Kjell,  Director of IT, Knowles  Electronics

For many customers, the art of promising orders on-time has often not been mastered, especially especially in a 24x7 business model. Fast, accurate order promising promising is the key to retaining existing customers and attracting new customers. Oracle Global Order Promising allows you to make quick delivery promises your customers can rely on. It allows you to consolidate supply and demand information from multiple transaction systems to provide a consolidated global  picture of demand and and supply. It is accessible from m multiple ultiple Order Entry systems, or order capture systems such as web stores and call centers. Multi-level Supply Chain ATP, CTP, CTD

You can perform a multi-level component and resource availability check across your entire supply chain for the products requested. You can control the organizations and suppliers to be included in the availability inquiry, and you can control the number of levels in your supply chain bill to be considered in your check. At each level in the supply chain, you can specify the key components and bottleneck resources for which to check availability. In addition, multi-level ATP also considers transit lead-times. Allocated ATP for Maximum Profitability

 Not all customers or demands demands are completely completely equal. You have commitments commitments to key customers. You also have new markets you are trying to enter or grow, and new sales channels you are trying to develop. When the total supply is not adequate to meet total demand, intelligent allocation needs to be done to ensure you meet your strategic objectives. Allocated ATP allows you to allocate or ration your scarce materials and resources among multiple sales channels or customers based on your business strategy. Improved Scalability and Performance through Database-centric Database-centric Order Promising

The Oracle Global Order Promising engine has a unique architecture. In contrast to the conventional wisdom of providing a memory-based memory-based ATP engine, the Oracle Global Order Promising engine runs completely inside the Oracle database. This provides significant architectural benefits that translate to unparalleled scalability and performance. performance. For instance, you do not need to wait for the memory-model to be loaded before providing promise dates to your customer, the data is instantaneously available to the engine as it resides in the database. Further, the database provides built-in multi-threading while ensuring consistency of available material and capacity, which is leveraged by the engine to process ATP requests in parallel to provide a higher degree of scalability. Additionally, the Oracle database provides a high degree of uptime and fail-safe recovery which enables a 24x7 ATP operation; a very critical requirement for global operations.

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INVENTORY OPTIMIZATION

Competitive pressures drive the need to improve customer service and cost simultaneously. Knowing how to provide superior customer service at the lowest possible cost is imperative to survive and prosper in the current competitive environment. Inventory Optimization dramatically reduces your inventory investment while improving the service level you provide your customers and improving your revenue and cash flow. Inventory Optimization considers the demand, supply, constraints, and variability in your extended supply chain to optimize your strategic inventory investment decisions. decisions. It allows you to provide higher service service levels to your customers at a significant lower cost by applying inventory postponement recommendations, recommen dations, while simultaneously weighing the impacts on revenue and sourcing. Supply Variability

Demand Variability

Dealing with Supply Chain Uncertainty and Variability

Least Risk Inventory Investment Strategy

Lead Time Variability

Service Level Requirements

 

You can capture the uncertainties in your demand and supply. Demand variation may be due to seasonal factors, forecast errors, consumer promotions, or new  product introductions. Supply variation variation may be due to lead-ti lead-time me uncertaintie uncertaintiess or supplier performance issues. Capturing the inherent variability in supply and demand allows you to overcome the limitations of deterministic optimization techniques. Flexible Definition of Service Levels

Your customer service target is not a single number. You can have different goals for different products, customers, or sales channels. With Oracle Inventory Optimization, you can define targets by item, organization, category, customer, and plan. You can also specify ABC classes as input with service level requirements for items in each class. Achieving Achiev ing Higher Customer Service at Lower Cost through Inventory Postponement

Determining the optimum inventory inventory strategy is a process of answering several strategic questions. One is determining what service level objectives to attempt to achieve for each of your product lines and what customers or channels to target. Not all products are equally profitable, and the cost and risk characteristics change change over time. Another critical question question is where in the supply chain inventory should be held. When products are closer to the end customer, the time required to respond to customer demand goes down, but at the cost of increasing levels of inventory investment, carrying costs, and risk of obsolescence. The cost of inventory decreases dramatically when it is kept as close as possible to a raw input state, but at the cost of increasing the risk of not  being able to rapidly respond to customer customer demand. Determ Determining ining the optimal

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 balance of these objectives objectives is known as developing a postponement strategy, strategy, and  properly executed it can can dramatically improve improve customer service and and reduce costs.

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COLLABORATIVE PLANNING 

 Alcatel implemented implemented Collaborative  Planning in three weeks and operates operates a 100% virtual supply chain. “Because of the visibility we now have across our virtual supply chain, we have been able to significantly reduce inventory liability. liability. Instantly sharing information about changes in demand or supply with our outsourcing partners  gives us all the most most precise view of where bottlenecks might occur. To me, this is a real competitive advantage” – Gary Schliekelman, Director of  Planning, Alcatel e-Business e-Business etworking Division.

Today’s planning processes are often a collection of multiple disconnected  processes. In most cases, limited limited collaboration with customers customers leads to low forecast accuracy; low visibility to customer forecasts and supplier commits leads to holding too much ‘just in case’ inventory, increasing inventory costs; 2nd-tier suppliers that deliver key components have no means to interact directly with you; and, indirect costs are high because of extensive expediting and inefficient communication. communication. The entire process has little collaboration, requires multiple steps, and takes a long time. If involving your customers and suppliers in your supply chain planning processes is one of your priorities, you can leverage Oracle Collaborative Planning to get you there fast at lowest cost. Collaborate with Customers and Suppliers

You can provide your customers with an easy to use portal to enter forecast information and receive exceptions when their forecast doesn’t align with your  published order commits. commits. You can use that customer fore forecast cast directly in your demand planning process and instantly achieve a more accurate picture of your customer’s expectations versus your own commitments. commitments. Oracle Collaborative Planning waterfall analysis to allowthem you with to compare customer forecasts provides over timecomplete while at the same time comparing your sales forecasts. On the supplier side, you can compare compare order forecasts and supply commits, view exceptions for demand-supply mismatches, and analyze supplier commit performance performance over time through waterfall analysis. Automate Inventory Replenishment

You can also automate your inventory replenishment by leveraging the Vendor Managed Inventory processes of Oracle Collaborative Planning and use the embedded workflow to tailor your out-of-stock signals to your suppliers. Supply Chain Exception Management

You can define and monitor exceptions across the entire supply chain, and use thresholds to avoid getting inundated inundated with alerts. You can also define which exceptions are visible to your suppliers and customers, and with what priorities they should be treated. Secure Access through Portals

Collaborative Planning provides robust data security and leverages secure  portals to allow trading partners partners to access the supply chain information information that you want to share with them. You can define flexible security rules that govern which data your suppliers and customers can view and enter, and which exceptions they receive at what thresholds. When used with iSupplier Portal,

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suppliers can view and act on both execution and planning information from a central place.

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  IMPROVED ARCHITECTURE, FOR A MORE SCALABLE SOLUTION Distributed, Database-centric Architecture

Oracle Advanced Planning allows you to optionally deploy planning on a separate server from your transactional instance. This allows you to run  planning at any time with with no conflict with transactions, transactions, as well as to perform unlimited simulations without ever impacting performance of other activities. It is also open and allows you to bring in data from other sources or instances. One of the most important implications of this is that Advanced Planning is completely backwards compatible with any supported version of Oracle Applications. There is no dependency on upgrading the rest of your Oracle Applications, and ASCP can be implemented implemented against your existing Release 10.7 10. 7 or Release 11.0 Applications. Workflow Based Process Automation

Oracle Advanced Planning makes extensive use of workflow to enable process automation and automated corrective action. This allows you to significantly reduce the non-value added costs of manual activity. Workflow notifications will be send when exceptions arise, or for example when orders cannot be delivered on the requested date, or when supply is directed from a lower ranked channel to a higher ranked channel. Seamless Integration

Even though all Advanced Planning products can be implemented individually, they provide greatest benefits benefits when deployed together. Demand Planning (DP), for example, can receive customer forecasts from Collaborative Planning (CP), and publish your sales forecast to CP to allow selected customers and suppliers to view. Inventory Optimiza Optimization tion can use DP’s demand variabi variability lity as input and calculate time-phased time-phased safety stocks that can feed directly into Advanced Supply Chain Planning (ASCP). ASCP also uses demand plans from DP and supplier capacity published in CP as input to the manufacturing and supply chain  planning process; resulting order commits commits and order fore forecasts casts can be published  back to CP, to be shared with customers customers and suppliers.

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SUMMARY – WHY UPGRADE TO ADVANCED PLANNING 11i?

This paper described the benefits and a path to upgrade to Oracle Advanced Planning from Oracle Manufacturing Planning (MRP), or any other MRP system. The most critical and and first step is to lay a new foundation for your future planning processes by moving to a new Advanced Planning common foundation. By migrating to unconstra unconstrained ined Advanced Supply Chain Planning you get exactly that, at the low risk and low cost that you require. Once you have put your new foundation in place, you have a wealth of options to further improve your planning planning processes in your organization. organization. You can start leveraging constrained or optimized planning to improve the quality of your  plans, or you can start leveraging other Advanced Advanced Planning products to autom automate ate  planning processes in the demand demand planning, order promising, invento inventory ry optimization, or collaborative planning areas. All of the Advanced Planning products share a common plus: Oracle’s proven, robust, scalable database-centric and seamlessly integrated planning model, that allows you to integrate with your legacy as well as existing Oracle Applications system. In the latter, we support running against Releases Releases 10.7, 11.0, 11i – or even a combination. All the capabilities and advantages described will help you make the decision to move to a new planning and supply chain management foundation, at the lowest cost and risk possible. Contact us today if you have more more questions about upgrading to Oracle Advanced Planning 11i.

Customers

Suppliers

Internet Portal

Portal Collaborative Demand Plan

Exceptions

Collaborative Supply Plan

Single Plan

Marketing Forecast

Exceptions

Process Automatio n

Sales Forecast Mfg. Forecast

Demand Planning Process

Consensus Forecast

t = hours

Supply Planning Process

 

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Why Upgrade to Advanced Planning 11i? (Short version) March 2003 Authors: Scott Malcolm, Roger Goossens Contributing Authors: Nadeem Syed Copyright © Oracle Corporation 2003 All Rights Reserved Printed in the U.S.A. This document is provided for informational pu rposes only and the information herein is subject to change without notice. Please report any errors herein to Oracle Corporation. Oracle Corporation does not provide any warranties covering and specifically disclaims any liability in connection with thi s document. Oracle is a registered trademark and Enabling the Information Age, Oracle Advanced Planning, Oracle Demand Planning, Oracle Advanced Supply Chain Planning, Oracle Global Order Promising, Oracle Constraint-based Optimization, Oracle Inventory Optimization, Oracle Coll aborative Planning, Oracle Supply Chain Intelligence, and For Planners, Not Programmers  are trademarks of Oracle Corporation.

 

Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores, CA 94065 U.S.A. Worldwide Inquiries: 650.506.7000 Fax 650.506.7200 Copyright © Oracle Corporation 2003 All Rights Reserved

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