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© 2007 Recycled Paper Greetings Internal and Confidential 1 Scan Based Trading An Oracle Consignment Inventory Solution NCOAUG, August 15 th, 2008 Karen.

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Presentation on theme: "© 2007 Recycled Paper Greetings Internal and Confidential 1 Scan Based Trading An Oracle Consignment Inventory Solution NCOAUG, August 15 th, 2008 Karen."— Presentation transcript:

1 © 2007 Recycled Paper Greetings Internal and Confidential 1 Scan Based Trading An Oracle Consignment Inventory Solution NCOAUG, August 15 th, 2008 Karen S. Janssen, Director of IT Infrastructure Anand Dharwadkar, Manager of IT Development

2 © 2007 Recycled Paper Greetings Internal and Confidential 2 Agenda Understanding Scan Based Trading RPG’s Challenge High Level Solution Design Setup Considerations Maintenance and Conversion Considerations Other Considerations Epilogue: RPG’s results Questions and Answers

3 © 2007 Recycled Paper Greetings Internal and Confidential 3 Understanding Scan Based Trading

4 © 2007 Recycled Paper Greetings Internal and Confidential 4 Understanding Scan Based Trading What is Scan Based Trading? –Scan Based Trading (SBT) is defined as the process where suppliers maintain ownership of inventory within retailers' warehouses or stores until items are scanned at the point of sale. –Typically, Scan Based Trading programs use EDI solutions as the key component to synchronize information between a retailer and its Scan Based Trading suppliers. 816 Organizational Structure 832 Catalogs 852 Product Activity Data (POS) 861 Receiving Advice 810 Invoice 820 Payment Advice

5 © 2007 Recycled Paper Greetings Internal and Confidential 5 Understanding Scan Based Trading What are some benefits? Increased SalesImproved Retailer Relationships Improved visibility of product salesReduced Order Processing Costs Reduced cost of stock overagesLowered Cost of Inventory Improved Time to MarketImproved Financial Metrics

6 © 2007 Recycled Paper Greetings Internal and Confidential 6 Understanding SBT Selling Organization Inventory View Inventory Organization Sub Inventories Product ships from warehouse to customer store Inventory Transfers

7 © 2007 Recycled Paper Greetings Internal and Confidential 7 Understanding SBT Point Of Sale View POS Data Invoice Master Inventory Scrapped

8 © 2007 Recycled Paper Greetings Internal and Confidential 8 RPG’s Challenge

9 © 2007 Recycled Paper Greetings Internal and Confidential 9 RPG’s Challenge Business Perspective Increasing pressure from larger retailer customers to move to a Scan Based Trading model of doing business Each SBT retailer had unique, customer-specific requirements –Store Conversion along side new store openings –Data requirements –Rollout schedules –EDI exchange frequency and schedules RPG needed to maintain the standard order processing, shipping and inventory management for non-SBT customers

10 © 2007 Recycled Paper Greetings Internal and Confidential 10 RPG’s Challenge Technology Perspective RPG had made a significant investment in Oracle Technology Stack and therefore needed to leverage existing functionality in core Oracle Application modules to meet SBT Process requirements –Mission critical systems included Financials, Order Management, Inventory, WIP, BOM, Workflow, Incentive Compensation –Recently Invested heavily in a 11i/9i/10g upgrade –Oracle 9i Application Database –10g Application Server –Oracle Developer –Discoverer –10g Oracle Warehouse Builder –10g Data Warehouse – Oracle Applications

11 © 2007 Recycled Paper Greetings Internal and Confidential 11 RPG’s Challenge Solution Approach –Engaged a consulting team to conduct a feasibility assessment on SBT programs –During the study, a collaborative, cross-functional team gathered requirements and mapped and gapped to various programs –Feasibility study indicated that the Oracle Core Consignment Inventory Solution would meet RPG’s requirements. (Through the study, it was determined that Oracle’s Collaborative Planning was not needed to meet RPG’s need.) –Developed a proof of concept pilot –Demonstrated solution through the pilot and made adjustments –Built Solution –Implementation Solution –Scheduled and slow customer store conversion rollout

12 © 2007 Recycled Paper Greetings Internal and Confidential 12 RPG’s High Level Solution Design

13 © 2007 Recycled Paper Greetings Internal and Confidential 13 Solution Design - Overview

14 © 2007 Recycled Paper Greetings Internal and Confidential 14 Solution Design – Orders Demand/Replenishment Order Fulfillment RPG Headquarters

15 © 2007 Recycled Paper Greetings Internal and Confidential 15 Solution Design – Point of Sale Invoicing Point of Sale (POS) Order Creation and Customer Invoicing Customer EDI RPG Headquarters

16 © 2007 Recycled Paper Greetings Internal and Confidential 16 Solution Design - POS EDI Transactions POS signifies data on product as it is scanned at the cash register. SBT means customer will only pay for what they sell. Depending on the trading partner, POS data is received inbound using one of two methods: 852 – The 852 document contains date of sale, UPC, price, quantity sold and store id. POS DataGentranOracle Billing Customer sends 852 Third-Party VAN sends 810 Oracle Billing 810 – The 810 document contains the same data as on the 852, plus an invoice number for each rooftop. Gentran

17 © 2007 Recycled Paper Greetings Internal and Confidential 17 Setup Considerations

18 © 2007 Recycled Paper Greetings Internal and Confidential 18 Setup Considerations SBT Customer Address Site (Rooftop 1) Inventory Organization Address Site (Rooftop 2) Address Site (Rooftop 3) Address Site (Rooftop n) Sub Inventory Location (Rooftop 1) Sub Inventory Location (Rooftop 2) Sub Inventory Location (Rooftop 3) Sub Inventory Location (Rooftop n) Item 1 Item 2 Item 1 Item 2 Item 1 Item 2

19 © 2007 Recycled Paper Greetings Internal and Confidential 19 Setup Considerations

20 © 2007 Recycled Paper Greetings Internal and Confidential 20 Conversion and Maintenance Considerations

21 © 2007 Recycled Paper Greetings Internal and Confidential 21 Conversion and Maintenance Considerations

22 © 2007 Recycled Paper Greetings Internal and Confidential 22 Conversion and Maintenance Considerations A word about Oracle’s High Volume Order Processor Oracle’s HVOP provides a streamlined and simple process –Tuned –ideal if 90% of orders are common or standard Some features are not integrated –Constraint checking –iPayment Integration Some functionality is not optimized with HVOP –Basic and Advanced Pricing –Shipping Integration –More detail on HVOP is available in an Oracle white paper on CD

23 © 2007 Recycled Paper Greetings Internal and Confidential 23 Conversion and Maintenance Considerations Customer Store Conversion Make a conscientious and informed decision on what stores are candidates for conversion. Carefully consider: Time needed to complete store conversion activity and plan accordingly Plan activity to the minutest of detail Determine what to do with replenishment orders during the store conversion activity Do you want to stock the store in preparation for the conversion Do you want to black out ordering during the conversion cycle Very early in the cycle, determine to do with the product that already exists in the store that is converting. Identify what the customer’s EDI capabilities and required lead times

24 © 2007 Recycled Paper Greetings Internal and Confidential 24 Conversion and Maintenance Considerations Daily Inventory Transactions and Credit Memos Management Inventory Transactions will be generating daily as either a materials transfer to a sub inventory, a decrement to inventory due to a sale, or an inventory return (credit memo or scrap). Orders will be generated for shipment to the customers store and a Bill-only invoice will be generated at the point of sale. Carefully consider: Processing Impact to Production Schedules Impact to closing period activity Adjustments for COGS Automated process could possibly take Inventory levels below tolerance Impact of setting up a new items for release Impacts to cycle counts and physical inventory activity DATA VOLUME Data retention requirements and Purging frequencies

25 © 2007 Recycled Paper Greetings Internal and Confidential 25 Other Considerations –Consignment Inventory and Collaborative Planning requires R11.5..x.x upgrade –Increased disk space requirements for miscellaneous receipts, SBT POS data, Inventory Organizations, sub inventory transactions, and invoices –Impact to financial forecasting analysis and reporting. For example, carry COGS of inventory at a rooftop versus a order from the warehouse that is invoiced upon shipment. –Challenges with servicing existing non-SBT customers while implementing new scan based trading partners –What to do with existing inventory in rooftops that has already been shipped and invoiced.

26 © 2007 Recycled Paper Greetings Internal and Confidential 26 Epilogue A word about Oracle’s Collaborative Planning – RPG’s Perspective

27 © 2007 Recycled Paper Greetings Internal and Confidential 27 Epilogue A word about Oracle’s Collaborative Planning – RPG’s Perspective ADVANTAGES User friendly GUI to interact with customers and suppliers Easy manual execution for replenishment and inventory visibility DISADVANTAGES Extremely data and memory intensive Min/Max plans only at Organization level Untested Customer VMI Solution

28 © 2007 Recycled Paper Greetings Internal and Confidential 28 Epilogue –Since May 2007, RPG has converted to a Scan Based Trading business model with over 2000 customer stores –Recent metrics have indicated that, for at least one of our major customer, sales have been up +13% –Process is solid enough that RPG can now handle converting customer stores at a rate of 150 stores per week. –Collecting POS data has allowed RPG react quickly to market trends –Hot topics can be quickly identified, and within in days the merchandise can be moved into other customer stores –Slow movers can be identified, analyzed for trends and management decisions on what to do with the merchandise can be made proactively.

29 © 2007 Recycled Paper Greetings Internal and Confidential 29 Questions? Q&A Contact Information –Karen Janssen –Office: – ; –Anand Dharwadkar –Office: –


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