Discrete Manufacturing What’s New in R12 'Discrete Manufacturing in R12 benefits from several valuable enhancements, including: expanded genealogy tracking, a new MES interface for expanded WIP control, unified inventory tracking across Process and Discrete, costing enhancements, sub-ledger accounting and much more. Come and get a run-down on all that's new in R12 Discrete Manufacturing,'   Discrete Manufacturing What’s New in R12 Tom Greene Principal Solution Consultant

Abstract & Agenda expanded genealogy tracking ABSTRACT: Discrete Manufacturing in R12 benefits from several valuable enhancements, including: expanded genealogy tracking a new MES interface for expanded WIP control unified inventory tracking across Process and Discrete costing enhancements sub-ledger accounting and much more AGENDA: Walk through all the new R12 features at a very high level Highlight in more detail the most notable ones Demonstrate the new R12 MFG MES

Safe Harbor Statement 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 decision. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle. You never saw me. I was never here. None of this ever really happened. It was all a dream.

Some things will never change… MRP, ENG, CAP, Mfg Sch are all unchanged in R12

R12 Inventory Overview

R12 Inventory Features Deferred COGS Recognition Depot Repair Enhancements Genealogy Enhancements Ledger Architecture Uptake Legal Entity Uptake Multi Org Access Control Enhanced Reservations Inventory Packing Slip Material Workbench Enhancements Organization Parameter Changes Asset Tracking Transaction Attributes Performance - Pick Release Parallelization Telecommunications Service Orders with Equipment Dual Unit of Measure Control Material Status Control Advanced Lot Control Picking Rules Enhancements Enhanced Manual Material Allocations Material Aging Workflow Support for Indivisible Lots Enhanced Lot Transactions Copy Organization Enhancements Telco Recurring Charges e-Tax

Serials and Lots now have status …

R12 Discrete WIP Overview

Oracle Discrete Manufacturing Solution Planning & Scheduling Manufacturing Intelligence Product Lifecycle Mgmt Warehousing / Transportation Service Asset Lifecycle Mgmt Flexible, Mixed Mode Manufacturing Repetitive ETO ATO / CTO MTS Flow / Lean Standard Discrete Lot-Based Manufacturing Execution Sample Analyze Adjust Quality Mgmt Visibility from Shop Floor to Top Floor Lot / Serial Genealogy Tracking Project Tracking What has driven Development efforts – e-business components Mixed Mode manufacturing capability use the best process for a product family or product Integration with the entire e-business suite Advanced Planning (APS) – provides demand, Planned Orders, Schedule Changes, Component Substitutes, Resources Substitutes Order Management (OM) – provides demand from the customer for configured orders Procurement Warehouse management system (WMS) – to track inventory Product Lifecycle Management – to capture requirements Transportation – to manage shipments Service – to address customer issues and returns Asset Maintenance – to maximize asset utilization and minimize downtime Flexibility to communicate both with the enterprise and outside the four walls The use of Portal technology and direct transaction linkage with XML, Fusion Middleware. Model shop floors of suppliers and contract mfgrs as orgainizations to provide single, real-time view of all WIP - Production Status, Material Availability, Mfg Capacity, Schedules / Changes, Ship Notices, Invoices / Payments Complete management of product data with the entire value chain Track and manage quality data Provide lot / serial genealogy tracking, even outside the enterprise Discussion points from SCM Overview The Oracle Manufacturing solution incorporates: Efficient Manufacturing to address Personalization, Demand Variability and Supply Variability High Quality Production Partner Collaboration Shop Floor Sys Partner Collaboration and Visibility Contract Mfgrs Suppliers CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract

R12 Discrete Manufacturing Features Fixed Component Usage Independent of Build Quantity Optional Inclusion or Exclusion of Component Shrinkage in Material Transactions Inverse Component Usage Scheduling Workbench Enhancements Mobile Return of Assembly Reserved to a Sales Order Reservation of Discrete Job as Source of Supply through Inventory Reservation Form Reservation of Completed Serialized Assemblies through Inventory Reservation Form Serial-Lot Genealogy Enhancements   Job & Resource workbenches have been enhanced through the support of the following features:    Print Gantt Charts  Users now have the ability to print Gantt charts, often used as referable hard copies in a production shop floor. Apart from generating the print preview, this feature supports customizing the printout content such as printing the Gantt chart by  • Specifying the date and time range for the printout • Specifying the level of details in the Gantt Print (Jobs only, Jobs scaled down to Operation level, Jobs with operations scaled down to the resource level, Resource only, Resources scaled down to the Resource instance level, etc) • Printing the snapshot of the “as is” Gantt view • Printing Gantt for a chosen timeline bucket • Limiting the number of jobs or resources to avoid a cluttered display  In addition to the above features, users will be able to specify page setup options and revert back to the original Gantt view after printing.    Restore last-worked customized views  When users of the job and resource workbenches create a preferred view through pane sizing, time bucket selection, row height adjustment, etc., it is possible for that view to be saved and recreated in subsequent launches of the workbenches. This eliminates the tedious task of readjusting the view each time a workbench is opened.  Additional tool tip for Resource and Job Workbench  With the new “Bar Inspector” as a tool tip, users are guided with necessary information (such as, start and end times) while performing a drag & drop to achieve greater scheduling accuracy. This is available for Job bars, Operation bars and Resource Bars in the Job Workbench and for Job Operations bars for Resource and Resource Instance in the Resource Workbenches.  Schedule over long time ranges in the Resource Workbench  Users are also provided with an ‘Edit Schedule’ option in the Resource Workbench, for an easy way to schedule over a long time range, instead of dragging a bar object. Genealogy Enhancements Users now have a combined view of lot and serial genealogy in one inquiry. In addition, operators performing completion transactions can tie component lot and/ or serial numbers directly to the parent assembly eliminating the intervening callout to a job. These enhancements enable stricter controls in material movement such as validation of lot number for component returns from a job back to inventory.

Fixed Quantity Components

Reservations Against WIP

Serial / Lot Genealogy and Tracking Always Know the Source and Placement of Each Part Manufacturing Partner Server (S.No. 512) Ireland Suppliers PCI Board (S.No. 717) Storage (S.No. 929) Boards R’ Us Denver, CO Where Used Composition Acme Chip Fab 12 CPU (S.No. 232) Memory (Lot No. 115) Disk Array (S.No. 892) E. Storage Austin, TX Need Script… Nippon Fab Japan Disk A (S.No. 676) Disk B (S.No. 339) SKD Co. S. Korea Trace a customer shipment back to the original source Trace a lot or individually serialized product through supply base

Serial / Lot Genealogy and Tracking

R12 Quality

R12 Quality Features E-Records Usability Enhancement Redlining of Changes to E-Record ERES support for 21 CFR Part 11 Compliance in Service, Field Service & Quality Genealogy Enhancements Output Quality Charts in HTML UI Quality Audits Solution Quality Enhancements for Multiple Organization Access Control Quality Enhancements for Process-Discrete Inventory Convergence Quality Integration for OPM Batch Process Nonconformance Quality Integration with Asset Operational Status Quality Integration with Depot Repair Tasks Quality Integration with Shop Execution Workstations in WIP, FLM, OSFM

HTML Quality Charts

Quality Audits

R12 Cost Accounting Overview

Comprehensive Costing Methods Analyze Product Cost and Profitability Standard Support for multiple costing methods Develop comprehensive standard or simulation product costs Rollup costs across the enterprise Costing transactions transparent to shop floor personnel Proactively identify, monitor, and analyze potential variances Track periodic average cost simultaneously with other methods Recognize COGS and revenues in the same proportion and accounting period LIFO FIFO Average Complementing costing methods are the analysis tools. Mfg intelligence and discover tools to do analysis. Variance and multi dimensional analysis. Analyze trends and take actions. Support from manufacturing Intelligence Standard costing provides rich variance reporting for each completion including variance reporting by cost element. All three actual cost methods provide actual cost based on purchase price. Invoice price variance can be included in item cost. Reduce your training time, Shop floor procedures and forms are the same across all cost methods. Manufacturing Intelligence provides multi dimensional analysis of variances and actual costs, as well as efficiencies and resource utilization. Deferred Revenue and COGS – One of the fundamental GAAP requirement is that revenue and its corresponding COGS must be recognized in the same accounting period. Prior to R12, COGS was immediately recognized on shipment of goods even though revenue recognition could be deferred to future periods. In R12, COGS is recognized and accounted in the same proportion as revenue recognized. Periodic Avg Deferred COGS

R12 Cost Management Features Multi Organization Access Control Deferred Cost of Goods Sold Sub Ledger Accounting (SLA) Accrued Liability Period End Accrual for Receipts Periodic Average Cost Enhancements Inventory Value Report Enhancements Period Close Diagnostics Process / Discrete Inventory Transfer Accounting Supply Chain Cost Rollup Enhancements Fixed Components Component Yield Multi Organization Access Control Multi-Org Access Control enables companies that implement a Shared Services operating model to efficiently process business transactions by allowing them to access, process, and report on data for an unlimited number of operating units within a single applications responsibility. This increases the productivity of Shared Service Centers as users no longer have to switch applications responsibilities when simultaneously processing transactions for multiple operating units. Data security is maintained using security profiles that are defined for a list of operating units and determine the data access privileges for a user. Deferred Cost of Goods Sold This enhancement synchronizes the recognition of revenue and COGS in accordance with the recommendations of generally accepted accounting principles. The Cost Processor defers the recognition of COGS for a sales order issue transaction by placing the balance of the cost of the shipment into a deferred COGS account and journal line type. The Cost Processor now transfers the balance from the deferred account to the COGS account in the same proportion of revenue recognized for an order line. Oracle Receivables processes post the revenue recognition percentage changes. Oracle Cost Management processes adjust the balances in the deferred and actual COGS accounts to record Cost of Goods Sold such that the percentage of cost recognized is the same as the percentage of sales that have been recognized Sub Ledger Accounting (SLA) The new Oracle Subledger Accounting (SLA) architecture allows users to customize the standard Oracle accounting entries. As a result of Cost Management's uptake of this new architecture, users can customize their accounting for Receiving, Inventory and Manufacturing transactions. Accrued Liability When purchases for inventory are received customers typically credit an accrued liability and when those purchases are vouchered that same accrued liability is debited. The credits from the receipt and the debits from vouchers often offset, but at times they do not offset and the differences must be reconciled. The accrued liability reconciliation solutions are designed to help customers audit and clear balances out in a controlled and auditable manner. These solutions have been significantly improved. Period End Accrual for Receipts When an accounting period ends there may be receipts for expense item purchases that do not yet have a vouchered vendor invoice and those expenses should typically be accrued for the period. The period end accrual for receipts solution automates this effort. The solution has been significantly improved. The calculations for line and distribution level details have been enhanced, the processes performance speeds have been improved, and the reports and audits have been improved. Periodic Average Cost Enhancements The Periodic Costing Process is enhanced in the following areas: The accounting template for periodic costing inter-organization transfers is now consistent with the template used for perpetual cost methods. The template adds inter-org Payables/Receivables, in-transit and accounting by cost group. The Periodic Costing accounting template for internal sales order transfers across Operating Units is now consistent with the template used for perpetual cost methods. The template adds inter-org COGS and accrual using a specified transfer price. The periodic item cost is calculated after taking into account all cost owned transactions rather than being calculated after each transaction. This enhancement minimizes the generation of variances to arrive at a more accurate periodic average cost. Additional functionality added for periodic costed jobs includes a new option that support the material overhand absorption rules for calculating job cost as well as additional options for handling scrap costs and partial completion costs. Inventory Value Report Enhancements On-hand, In Transit, and Receiving valuation reports have a new optional 'As-Of Date' parameter. When the user specifies an as-of date, the reports display valuation data up to the specified 'As-Of Date'. If no date is specified, the report displays valuation data up to the current system date. Period Close Diagnostics The period close process is enhanced to allow users to easily identify the pending and uncosted transactions that prevent period close. The existing Inventory Accounting Periods form now supports drilldown to the associated transaction forms. This allows users to more quickly view the details of the transactions that preventing period close. A new workflow notifies users of transactions that fail the costing process. This facilitates the timely identification and resolution of costing errors and minimizes problems during the period close process. A new report displays the details of all transactions that are in a state that prevents period close. This report, based on Oracle XML Publisher technology can be easily customized to meet user requirements. Process / Discrete Inventory Transfer Accounting Oracle Cost Management adds its support to the OPM (Oracle Process Manufacturing) Inventory convergence initiative. In the past, Oracle process manufacturing customers used OPM's Inventory Management module. With this release OPM customers can migrate to Oracle Inventory for their inventory management needs. This integration provides OPM users with a seamless integration to the e-Business Suite while maintaining the existing user experience for discrete users. It is important to note that the discrete Oracle Cost Management Costing and OPM Process Costing applications are not converged and remain distinct applications. Oracle Cost Management forms, concurrent programs and reports are modified to prevent an OPM organization user from accessing discrete costing setup forms, reports and other programs. This validation is needed to ensure that process transactions are not accounted for in both the discrete and process costing applications. Material transfers between process and discrete inventory organizations are costed based on a specified transfer price. A new "Interorg Profit/Loss" account, captures the difference between the sending organization's cost and transfer price. Back to Top Supply Chain Cost Rollup Enhancements The Supply Chain Rollup process is enhanced to optionally store a snapshot of the Bill of Materials used. The snapshot is copied to an alternate Bill of Material as specified by the user. Assembly Cost Rollup is obsolete and replaced by the Supply Chain Cost Rollup process. The Consolidated Bill of Material report and the Indented Bill of Material report that were previously based on the Assembly Cost Rollup are now obsolete. These are replaced by the Supply Chain Consolidated Bill of Material report and the Supply Chain Indented Bill of Material report. Fixed Components This enhancement adds support for lot-based materials that have a fixed usage regardless of the job size for discrete WIP jobs, OSFM lot-based jobs and Flow Manufacturing. This feature provides a more accurate valuation of assembly cost where fixed quantities of materials are used for a job. Back to Top Component Yield Users now have the flexibility to control the value of component yield factors at the WIP job level. The transaction logic now considers pre-yield BOM quantity per assembly rather than the quantity inflated by shrinkage. This enhancement eliminates the generation of unrealizable decimal quantities in WIP jobs. Users can continue to have the backflush transactions include the yield by using the new "Include Component Yield" parameter in the WIP Parameters form. If the parameter is unchecked, backflush transactions will not consider component yield. The user can control the actual quantities used by either overriding the quantity during backflush transactions or by entering manual component issue transactions

Report Enhancements

R12 Discrete MES

Oracle Discrete Mfg as the MES Oracle Manufacturing Execution Options Confidently Deploy Oracle to Run and Monitor Your Shop Floor In-House Mfg Outsourced Mfg Deliver Real-Time Shop Floor Visibility to Multiple Layers of Management Reduce TCO / Complexity via Integrated Mfg Mgmt & Production Execution with 3rd Party MES Mfg Partner Use Directly You Oracle Discrete Mfg Model Shop Floor Oracle Discrete Mfg as the MES Oracle/ Legacy/ 3rd Party MES MES APIs Oracle Discrete Mfg Legacy/3rd Party MES Share Info Shop Floor Shop Floor Shop Floor Leverage Oracle Discrete Mfg on the Shop Floor in Any Capacity & Gain… Enterprise-wide quality mgmt with complete serial / lot genealogy & traceability Complete configurations mgmt: as designed, as sold, as built, as maintained Compliance with regulations such as RoHS and 21 CFR Part 11 Decision making through built-in business intelligence

Focus: Discrete Mfg with MES Increase OPERATOR Efficiency with Intuitive Workstation Displays Dispatch list type Authorization through badge number entry Jobs not ready to be taken up for production Work Content

View Current Employees working Focus: Discrete Mfg with MES Increase OPERATOR Efficiency with Intuitive Workstation Displays Work Content Actions View Instructions View Current Employees working Work Content is all the information required to perform work on an operation. It includes component and resource requirements, work instructions, attachments and other job property information.

Exceptions-based management Focus: Discrete Mfg with MES Empower SUPERVISORS with Quick Access to Shop Floor Status Exceptions-based management The logical starting point for a Supervisor Provides a snapshot of the current shop floor status and issues requiring resolution Immediate “one click” access to supervisory functions Resolve exceptions Expedite orders Reorder dispatch list Report resource usage Review shop floor trxns View jobs in process and projected capacity shortages with drill downs to dispatch list CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract

R12 Flow, Project, OSFM Manufacturing Overview

Oracle Discrete Manufacturing Solution Planning & Scheduling Manufacturing Intelligence Product Lifecycle Mgmt Warehousing / Transportation Service Asset Lifecycle Mgmt Flexible, Mixed Mode Manufacturing Repetitive ETO ATO / CTO MTS Flow / Lean Standard Discrete Lot-Based Manufacturing Execution Sample Analyze Adjust Quality Mgmt Visibility from Shop Floor to Top Floor Lot / Serial Genealogy Tracking Project Tracking What has driven Development efforts – e-business components Mixed Mode manufacturing capability use the best process for a product family or product Integration with the entire e-business suite Advanced Planning (APS) – provides demand, Planned Orders, Schedule Changes, Component Substitutes, Resources Substitutes Order Management (OM) – provides demand from the customer for configured orders Procurement Warehouse management system (WMS) – to track inventory Product Lifecycle Management – to capture requirements Transportation – to manage shipments Service – to address customer issues and returns Asset Maintenance – to maximize asset utilization and minimize downtime Flexibility to communicate both with the enterprise and outside the four walls The use of Portal technology and direct transaction linkage with XML, Fusion Middleware. Model shop floors of suppliers and contract mfgrs as orgainizations to provide single, real-time view of all WIP - Production Status, Material Availability, Mfg Capacity, Schedules / Changes, Ship Notices, Invoices / Payments Complete management of product data with the entire value chain Track and manage quality data Provide lot / serial genealogy tracking, even outside the enterprise Discussion points from SCM Overview The Oracle Manufacturing solution incorporates: Efficient Manufacturing to address Personalization, Demand Variability and Supply Variability High Quality Production Partner Collaboration Shop Floor Sys Partner Collaboration and Visibility Contract Mfgrs Suppliers CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract

R12 Project Manufacturing Features Project Manufacturing Inquiry Enhancements  Purchasing Summary Lines in Project Mfg Inquiries Transfer Project Invoice Charges Enhancements Changes related to Multi-Org Access Control In previous releases, Project Manufacturing Inquiry supported viewing of Project related data across Inventory Organizations but within a single Operating Unit. In Release 12, Project Manufacturing Inquiry includes all the information related to a Project across Operating Units. Prior to R12, while querying for a specific Project/Task/Seiban Number through Project Manufacturing/Seiban Portals, Purchasing Summary Lines represented the Line Amount as a total of all the distribution amounts at a PO Line Level. In Release 12, while querying for a specific Project/Task/Seiban Number, Purchasing Summary Lines now display the amounts with enhanced granularity at a PO/Line/Shipment/Distribution level. This enhancement applies to viewing information related to Purchase Orders and Blanket Releases through the Project Manufacturing/Seiban Inquiries. "Transfer Projects Invoice Charges" functionality in Project Manufacturing has been enhanced to include Tax Rate Variance (new in R12) while posting Invoice charges as additional project costs to Projects in addition to IPV, ERV, Tax IPV, Tax ERV, Miscellaneous and Freight charges. Tax Rate Variance is also captured in the Transfer Project Invoice Charges Execution Report. This enhancement was made as an impact of the changes made by Oracle Payables and the new E-Business Tax product in R12 Multi-Org Access Control enables companies that have implemented a Shared Services operating model to efficiently process business transactions by allowing them to access, process, and report on data for an unlimited number of operating units within a single applications responsibility. This increases the productivity of Shared Service Centers for users no longer have to switch applications responsibilities when processing transactions for multiple operating units at a time. In Release 12, following changes have been made in PJM as a result of the MOAC project: • For products that have MOAC dependencies such as Purchasing and Order Management, based on the new Security Profile settings, PJM provides secure views to Projects and Tasks information across Operating Units. Prior to Release 12, Project/Task information is retrieved based on the Profile: 'MO: Operating Unit' tagged to the responsibility. • For products that do not have MOAC dependencies, such as Work In Process and Flow Manufacturing, Projects and Tasks information is retrieved based on the Operating Unit derived from the Inventory Organization. Prior to Release 12, Project/Task information is retrieved based on the Profile: 'MO: Operating Unit' tagged to the responsibility. • Projects Commitments: Commitments views have been changed in R12 to allow Project Status Inquiry (PSI) display project commitments across Operating Units based on the MOAC Security Profile settings.

R12 Flow Manufacturing Features Enhanced Flow Execution Workstation Fixed Component Usage Support Maintain Schedule Number when Rolling Schedules Forward

R12 Shop Floor Management (OSFM) Features Component Shrinkage Enhanced BOM to Capture Inverse Usage Enhanced Shop Floor Execution Capabilities Fixed Component Usage Support for Lot-Based Jobs Genealogy Enhancements Planning Enhancements for OSFM Sales Order Reservation for Lot-Based Jobs Support for Lot Attributes During Inventory Lot Transactions Support for Lot and Serial Controlled Assemblies Support for Partial Move Transactions Support for RosettaNet Transactions

R12 Purchasing Overview Bonus!

Oracle Advanced Procurement The Integrated Suite that Dramatically Cuts All Supply Mgmt Costs Spend Categories Reduce Spend on Goods and Services Supplier Collaboration Spend Analysis Category Management Online Sourcing Orders Indirect Goods Supplier Portal Streamline Procurement Processes Logistics Services Approval Routing Touchless Buying Automated Payment Engineered Goods Settlement Budget-Based Procurement Supplier Network Contract Management Supplier Performance Direct Materials Profile Management Enforce Policy Compliance

R12 Purchasing Features Professional Buyer's Work Center Procurement for Complex Services Multi-Org Access Control (MOAC) Document Publishing Enhancements Communicate Document Attachments to Suppliers Maintain Sourcing Rules/ASLs for Agreement Items Support for Contractor Purchasing Users Compliance to Packaging Constraints Auto-Approval Tolerance for Change Orders eAM Support for Services Procurement Model Complex Pricing for Blanket Line Items Advanced Approval Support for Requisitions Subledger Accounting for Budgetary Control Actions New User Interface for Oracle Purchasing Setups Material Status Control Sub-lot Control Depot Repair Enhancements E-Business Tax

R12 Advanced Supply Chain Planning Overview Bonus!

What does ASCP do? Purchased parts planning Oracle Advanced Supply Chain Planning (ASCP) is a comprehensive, internet-based planning solution that decides when and where supplies should be deployed within an extended supply chain (for example, inventory, purchase orders and work orders). This is the supply planning function. Oracle ASCP addresses the following key supply planning issues: Purchased parts planning Capacity Modeling and Forecasting Supplier Demand Forecasting Production Planning and Scheduling Available to Promise calculation Sourcing Optimization, Supply Constrain Resolution Excess and Obsolete Planning and Simulation Distribution Planning

R12 Supply Chain Planning Features Distribution planning Item attribute simulation sets Sequence-dependent setups Gantt chart enhancements Order queries Reports Discrete Manufacturing integration enhancements Forecast spreading for Gregorian calendars