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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,

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Presentation on theme: "Turn Service Supply Chain into Profits with Value Chain Planning Moshin Lee, Sr. Director, Oracle Value Chain Planning Product Management Graham Reid,"— Presentation transcript:

1 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

2 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 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 Oracles products remains at the sole discretion of Oracle.

3 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 3 Program Agenda Evolving to best in class service parts and MRO planning with Oracle VCP Development Roadmap Case Study: Oracles use of VCP for service parts planning

4 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 4 Oracle Value Chain Planning Solution Common foundation Single source of truth Centralized services Start anywhere, redo nothing Planning and Optimization Scenario Planning & Analytics Engineered Systems & Solutions Planning Data Management

5 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 5 ASSET INTENSIVE Service and Maintenance Planning solution The Oracle difference: The right solution for the right problem 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 DISTRIBUTION CENTRIC 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 REPAIR CENTRIC 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

6 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 6 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 Improve spare parts planning

7 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 7 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 Execute to plan Integrated planning and execution Reduce cost via pre-built integration

8 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 8 Work list driven actions Supersession Integrated demand and supply planning Pegging view Service planner workbench

9 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 9 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 to best in class spare parts planning

10 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 10 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 Evolve – optimize spares stocking Minimize SLA portfolio cost 99%, 2 hours 97%, 4 hours 92%, 24 hours

11 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 11 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 360 degree visibility Evolve – Monitor parts planning performance

12 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 12 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 Asset Intensive Planning with VCP Prebuilt integration with EBS CMRO and EAM

13 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 13 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 items 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 Asset Intensive Planning with VCP Prebuilt integration with EBS CMRO and EAM

14 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 14 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 Prebuilt integration with EBS CMRO and EAM

15 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 15 Asset Intensive Planning with VCP Process flow Complex Maintenance Repair and Overhaul Enterprise Asset Management Enterprise Asset Management VCP Demand Management and S&OP VCP Production Scheduling VCP Advanced Supply Chain Planning VCP Inventory Optimization Order Management Order Management Detailed maintenance schedule Visits and Visit WBS Adjusted WO dates Work Orders Planned maintenance requirements & Planned UMP and Production Visit Work Orders Planned repair orders Rebuildable activities, WOs, and Forecasted WOs Historical and projected fleet size Historical and projected fleet utilization Historical visits and usage Planning factors Historical EAM usage Resource utilization Total cost Non-UMP visit forecast History for non-maintenance products ASCP plan results (material and resource requirements) Total material requirements Demand variability Service levels Budgets Target SS Time phased SS Forecast for non-maintenance products Planned orders

16 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 16 Schedule around preventative maintenance Analyze key performance indicators Analyze maintenance schedule exceptions Analyze critical path Maintenance scheduler workbench

17 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 17 Development Roadmap

18 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 18 Recent Updates and Future Plans Service and Maintenance Planning 20122013 2014 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 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 12.1.3.7 and Demantra 7.3.1.3 12.1.3.8 and Demantra 7.3.1.4 VCP 12.2.4 12.1.3.9 and Demantra 7.3.1.5 VCP 12.2.2.3.1

19 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 19 Case Study

20 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 20 Oracle Internal Implementation Oracle Hardware Support Overview Implementation footprint Service Supply Planning Process Benefits Achieved Lessons Learned Looking Forward Deploying Value Chain Planning for Hardware Spares

21 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 21 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

22 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 22 Lockbourne Leipzig Singapore Miami Oracle Spares Warehouse Distribution T2 - 7 T3 - 76 T1 T2 - 11 T3 - 15 T2 - 83 T3 - 58 T2 - 17 T3 - 54

23 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 23 Inventory Organization Structure TierDescriptionPlanned Tier 1Distribution CenterSPP in VCP Tier 2Country WarehouseSPP in VCP Tier 3Local WarehouseSPP in VCP Tier 4Unmanned WarehouseMin-Max Tier 5Managed On -SitesMin-Max Tier 6Field TechniciansSpares Management Tier 7Repair Vendors Tier 8Scrap Agents

24 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 24 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 Spares Planning with VCP Right Part, Right Place, Right Time at the Right Cost

25 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 25 Value Chain Planning Oracle Hardware Spares Supply Chain VCP Footprint Advanced Planning Command Center Collections Items/BOMs Sourcing Rules Purchase Orders Repair Orders Shipments Suppliers Customers Order Types Demand Class Organizations Inventory Locations Contracts Supersessions Collections Items/BOMs Sourcing Rules Purchase Orders Repair Orders Shipments Suppliers Customers Order Types Demand Class Organizations Inventory Locations Contracts Supersessions E-Business Suite - Global Single Instance Service Parts Planning Orders Buy Repair Transfer Orders Buy Repair Transfer Demantra Demand Management Inventory Optimization

26 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 26 Planning Calendar Monthly Statistical Forecast Leading Indicator Forecast Weekly Rebalancing Inventory Optimization Weekly Sub-Set Daily Collections Regional Plans APCC Refresh

27 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 27 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

28 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 28 Reverse Supply Chain Transformation 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 Results

29 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 29 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

30 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 30

31 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 31 Oracle Value Chain Summit 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/VCS14www.oracle.com/goto/VCS14 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

32 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 32


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