Insight: Why upgrade from MRP to ACSP

Supply Chain Trends

Information Transforms the Supply Chain

Old Model: Push

Supplier Manufacturer Wholesaler/ Transportation Retailer Customer

Distributor Carrier
New Model: Pull

• Supply-Centric Information
• Demand-Driven
• Vertically Integrated Information • Virtual Supply Chains
• Physical Asset Based Information • Information Based

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Agenda

What is Advanced Planning (ASCP)?

ASCP Benefits over MRP

Common Objections to ASCP

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Evolution of Planning

1960’s
MRP
Material Requirements Planning M
Time Phased Pegging Logic R
Infinite Capacity P
Open Loop – Does not account for capacity

1970’s
MRP II M
Closed Loop – Visibility into constraints R
Visibility into financial budgets P
Financial reporting 2

1980’s
ERP
E
Enterprise Resource Planning
R
Closed loop system
Includes financials and enterprise activities P

1990’s
APS
A
Advanced Planning Systems
Made possible with more computer processing power P
Optimization capability S
More flexible capability

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MRP/Advanced Planning Terms
Separate product from Concept/Process

● MRP Concepts/Process Definitions

– MRP – Time phased Material Requirements Planning process used for
netting requirements to meet demand
– ERP – Enterprise Resource Planning. Closed loop planning process that
takes into account enterprise requirements.
– MRPII – Adds the ability to visualize and manage constraints including
enterprise budgets, etc.
– Advanced Planning – Can include automations, extension of supply
chain to include customers and suppliers
● Oracle Product Definitions
– MRP – Standard MRP single organizational unconstrained planning tool
(Can do MRP or non-automatic MRPII)
– ASCP – Advanced planning tool that is capable of planning single
organizational unconstrained plans through automated enterprise wide
optimized planning (Can do MRP, MRPII, and more)

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Unconstrained ASCP
Make better decisions

● Use a single plan to plan your entire supply chain to reduce planning cycle time
– Simultaneous material and capacity planning
– Plan process and discrete mixed models
– Perform forecast consumption inline

● Plan at aggregate level, as well as detailed level in a single plan, with better
accuracy
– Time granularity in plan horizon
– Account for yields

● Leverage advanced problem solving and analysis tools

– Comprehensive exception management and automation through workflow
– Extensive pegging capabilities
– Easy and intuitive navigation
– User preferences and user defined queries to

● Measure plan to target performance

– Integrated performance management
Holistic Planning and Optimization
Highly adaptable to your business – segment problem as needed

One holistic plan

SCP for all Organizations • Adapts to your current business

One DRP, multiple DRP
DRP for all Orgs
MRP Org 1 MRP Org 2 MRP Org 3
Multiple MPS, multiple MRP
MPS for BU 1
model
– Single plan or multiple plans
• Evolve planning model at your own
pace
– Re-configure easily by
modifying plan options instead
of re-implementing or re-
modeling
MPS for BU 2
• Multiple models can co-exist

MRP MRP MRP MRP MRP MRP

Org 1 Org 2 Org 3 Org 4 Org 5 Org 6

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Scalable and Open Architecture
Database centric architecture: scalable, robust, secure

Trading Partners Internal Users • High performance

– In-memory only when needed
– Multi-threaded snapshot
– Leverages key database features like
materialized views, partitions, and
Portal Portal
analytical workspaces
Internet • Reliable
Analytical – All plan information resides in the
Workspaces
Order Promising
Engine
database
– Hot backup and recovery
Oracle ERP
– Leverages grid computing infrastructure
APIs KPIs Workflows Plans • Open and standards based
Advanced Planning – Runs against all versions of Oracle
XML EBS - 10.7, 11.0, 11i
EDI
Flat file – Deploy against legacy systems
Legacy Systems – XML, flat file, EDI support

Legacy Cochlear, Embraer, FXAP, NCR, Interceramic,

Deployments GE Aircraft Engines, Perkin Elmer, Xilinx, A

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Process Automation
Reduce planner’s workload through workflow automation

• Automated end to end planning process

– DP ► IO ► ASCP ► GOP ► CP

• Automated plan execution

– Auto-release orders and reschedule
recommendations

• Configurable exception management

– Workflow enabled exceptions
– User-defined exceptions
– Configurable thresholds

Kyocera has workflow-enabled their planning

process to the extent where their planners
manage all the plan exceptions by responding to
email notifications

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Agenda

What is Advanced Planning (ASCP)?

ASCP Benefits over MRP

Common Objections to ASCP

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ASCP over MRP Functionality Summary

● Easy and intuitive navigation

● Horizontal and vertical plan display
● Enhanced supply/demand view
● Improved exception management
● Improved multiple planner support
● Improved plan run times
● Change tracking and undo capability
● Enhanced Reporting
● Integrated performance management
● Plan comparisons
● User Preferences

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Customer ASCP Proof of Concept
Compared to Oracle MRP
Functional area
Performance Related Benchmarks
- Compressed planning cycle
- Reduced MRP run times
- More reliable response
More efficient user interface
Reducing manual effort
Multi-tier planning
Benefit
From 17 hours to 4 hours
330 Minutes to 144 Minutes
Consistent/Predictable planning run times
Easier Queries, Exception messages
improvement, easier to use
Fewer process steps, Researching a
demand stream cut from 4 steps to 2
steps
Help global planning efforts
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Customer ASCP Proof of Concept
Compared to Oracle MRP
Functional area
Increased capacity to run “what-
if” scenarios
Improving ability to react to a
ramp
Cycle time improvement on
responding to customer requests
Enabling global growth
Better able to identify supplier
liability
Benefit
Plan comparisons, on-line re-plan, what-if
constraint planning all provide capability
What-if planning, exception messaging, plan
comparisons, multi-tier planning all in a single
tool
ATP Inquiry tool in ASCP, what-if planning
capability to aggregate multiple customer
requests
Single global plan with reduced run times
Multi-Tier planning to provide visibility of
supplier liability across supply chain,
optimization helps prioritize across supply
chain
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ASCP Scope – Planning Run Setup
Solutions Enabled with ASCP

Load Forecasts Single plan with

Standard MRP
Directly Different Aggregations
Sales Sales Sales
Forecasts Forecasts Forecasts
Orders Orders Orders

Holistic
MDS MPS
Plan

MPS MRP

MRP
Simpler processes, however
Implementing with Same different from what is allowed in
scope as Standard MRP standard MRP process

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Planning Cycle Options

Standard MRP Planning Cycles Enabled with ASCP

Create Create Create Create

Forecast Standard MRP Forecast Forecast Forecast

Data Data
Load MDS Load MDS
Collection Collection
ASCP

Data Run
Run MPS Run MPS
Collection Holistic Plan

Run MRP Run MPS Run MRP

Same Process Run MRP

Similar Results

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Oracle’s Solution Provides the Lowest Complexity,
Shortest Implementation and Best Total Cost of Ownership

● Seeded integration with back-end eBusiness

● Integration tools for flexible configurations
● Modular solution that can be deployed
incrementally
● Easily configurable solution
– “Optimization for Planners, Not Programmers”
– Extensive defaulting
– Holistic planning
– Adaptable - change the model as your
business changes; multiple models can co-
exist
● Proven implementation methodology
– Business Flow Accelerators
● Reduced Time to implement
● Lower Cost of ownership

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Oracle Advanced Planning Model
E-Business planning solution: zero latency, real-time collaboration

Customers Suppliers
• Enable closed loop
Tier 2 collaborative planning
processes across your value
Tier 1
chain
• Have complete supply chain
Portal Portal visibility
Internet • Make better decisions
Automated Exceptions
• React immediately to
disruptions in supply chain

Marketing
Manufacturing Build a responsive Supply
Sales Chain on INFORMATION
Demand Hub & Multi- Consensus forecast Single
not inventory
Mfg. dimensional analysis and prod. plan holistic plan

S&OP Process Supply Planning

Business Intelligence

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Agenda

What is Advanced Planning (ASCP)?

ASCP Benefits over MRP

Common Objections to ASCP

Q&A

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Common Objections
Why companies choose to not implement APS

●“We are not ready for Advanced Planning”

●“Advanced Planning is too complicated for our planners”
●“Our data is not good enough for Advanced Planning”
●“APS is much more expensive to implement”
●“Training is much more difficult”

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Answers to common Objections

●Need to separate the concepts from the products

●APS can be implemented with the very same scope as MRP
●The planning processes can be very similar
●APS uses the same setups as MRP
●APS can be implemented in an unconstrained mode
●Implementing additional APS functionality can be
incremental

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Impact of data on advanced planning implementations

For the most partB. Data

requirements and setups
Impact of Data/Risk

are the same, reliance on

good data is greater

Oracle ASCP Scope can match any of these concepts

MRP MRPII Advanced Planning

Planning Concept

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Bad Data Impacts all Planning – BOM Example
The more you rely on the system, the greater the impact

End Assy
● Data dependency is the similar for MRP and
Qty 1 Advanced Planning
Mfg Lt 3
– Effective MRP requires good data

Sub Assy Purch 1 ● Negative impacts can be significantly increased in

Qty 2X 3 Qty 1
Mfg Lt 2 Purch Lt 5 advanced planning
– Constraints can automatically move related
items
Purch 2 Purch 3
Qty 1 Qty 1
– Automated actions based on exceptions
Purch Lt 3 Purch Lt 5

Advanced Planning (APS) Material Requirements Planning (MRP)

● Not enough subassy, purch2, purch3 ● Not enough Subassy, Purch2, or purch3
● Schedules for End Assy and Purch1 ordered
moved out
● Automatic messaging

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ASCP - Managing Scope
Scope Decisions to keep costs/complexity down

● Very easy to add additional scope to solve business problems

– Additional functionality can be easy to justify
● Additional scope adds complexity, timing, and costs
– If these are a concern then scope can be limited
– Incremental scope increase may not seem significant
● If deciding between ASCP or Standard MRP to do simple
organizational MRP
– It is possible to keep scope similar to Standard MRP
– Implement additional functionality post MRP
– Control the launching of the plan (manage options)
● Unconstrained Planning
● Using MDS (same as MRP Approach)
● Planning Instance as a part of source instance
– Minimal implementation costs associated with separating
instance
● Plan by single Organization
● Sourcing complexity

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Deployment: Focus on Most Important Problem
1. Improve the quality of your plans – constrained and optimized planning

• Improve plan quality

– Automatically recommend alternative
suppliers, components, resources,
facilities, and routings
ASCP – Generate feasible plans that respect your
material and resource constraints
Optimized

Constrained • Make better decisions faster

– Cost based optimization: maximize profit,
Unconstrained
inventory turns, and customer service
– Out-of-the-box optimization
MRP APS Common Infrastructure
– Priority based decisions
– Drag-and-drop rescheduling
Oracle Applications
(11.0, 11i) • Improve resource scheduling
– Schedule simultaneous resources
– Batch resources
– Minimum transfer quantities

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Deployment: Focus on Most Important Problem
2. Expand to other areas as your business requires

• Sales and Operations Planning

Sales and Operations Planning
– Balance demand, supply, inventory and
budgets
Demand
Planning
• Demand Planning
Inventory ASCP
– Improve forecast accuracy
Optimization
Optimized
Collaborative
Planning Constrained
• Inventory Optimization
– Improve service level at lower inventory cost
Global Order Unconstrained
Promising
• Global Order Promising
MRP APS Common Infrastructure – Promise more reliable dates to customers

• Collaborative Planning
Oracle Applications
(11.0, 11i) – Automate inventory replenishment and
supply chain collaboration with your trading
partners

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Integrated, Yet Modular
Integrated demand, inventory, and supply planning solution

Sales and Operations Planning

Strategic Network Optimization

Agg. Supply Plan

Demand Planning
Detailed Forecast and
Supply Plan Forecast
demand variability
Inventory Optimization

Time-phased safety stocks

Network Model
Advanced Supply Chain Planning
Constrained
plans
Global Order Promising Supply Order Order Customer
commits forecast forecast forecast
Supplier capacity

Collaborative Planning

Suppliers Customers

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Do you have any of these challenges? If Yes, APS is the
answer

Customer service issues
Multiple source systems

Constant reschedules
Competitive issues

Too much of the wrong
Inflexible planning tools
inventory

Fragmented planning data

Manual disconnected
planning processes (Excel)
Poor forecasting capability

Too much obsolete
Global supply chain
inventory requirements

No formal S&OP Process
Changing business

Disparate Planning conditions
Systems

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Key Takeaways

● ASCP can be implemented with a similar scope as MRP

● Even Unconstrained ASCP has significant business advantages
over MRP
● ASCP is a foundation for continued business process
improvement and an opportunity to sell more APS products
● Oracle APS is significantly less expensive then implementing
other APS point solutions and provide much more business value

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