Conference ID: 574588 / Password: 574588 Electronic Kanbans Audio Conference Dial In Numbers: Americas 888-967-2253, APAC 800-9491-2777 Conference ID: 574588 / Password: 574588 Bill Desmond, CPIM Supply Chain Sales Consultant

Today’s Topics Kanban functions between Astec and its suppliers Setups, variations, planning cycle, etc. Collaboration with suppliers in updating Kanban status (Pull, Replenishment, shipment, etc.) Graphical / workbench view of Kanban card status; Integration with Inventory / Flow Manufacturing / PO / and Financial modules Use of supplier hub inventory (VMI) Functions available in 11.5.9 vs. 11.5.10

Today’s Topics Kanban functions between Astec and its customers (Astec WIP to customer hub inventory, then to customer) Setups, variations, planning cycle, etc. How customer pull from our Oracle Inventory Org can trigger Kanban planning between Hub Inventory Org and Factory Org Use of Kanban in Flow Manufacturing in factory org; Collaboration with customers in updating Kanban status when customer pulls from our Hub Inventory Org Integration with AR / Inventory / Flow Manufacturing, etc. Graphical / workbench view of Kanban Functions available in 11.5.9 vs 11.5.10

Agenda Demonstration of Supplier Electronic Kanban Replenishment Setting Up and Maintaining Kanbans Collaborating with Suppliers Collaborative Planning Vendor Managed Inventory Consigned Inventory Consigned and VMI with Customers Questions and Answers

Kanban Execution Demo Flow Production - Work Order Supplier - Requisition Intra Org – Move Order Inter Org – Xfer Order Supplier logs Into Portal, Sees Release And Ships Shipment Received, Kanban Updated Requisition Auto-Sourced, Blanket Release Created Empty Kanban Scanned Kanban Execution Demo

Kanban Planning Kanban Planning Algorithm will calculate either the Kanban size or the number of cards for a given pull sequence (Number of Cards – 1) X Kanban Size = Average Daily Demand X (Lead Time + Safety Stock Days) Kanban planning logic can be modified for specific needs

Kanban Planning Example Average Daily Demand=200 M498903 Average Daily Demand=100 Average Daily Demand=300 M342855 M587393 (4) (2) (2) M945980 A Pull Sequence is Defined for this component with this locator as the Kanban location Default Supply Locator for this component in these three BOMs Sub: RIP Locator 33-12-65 Average Daily Demand for this component in this location = 1600 Kanban Planning Demo

New Feature w/11.5.10 - Mass Update Production Kanbans Description Allows the mass update of production kanbans based on new or revised planning pull sequences. Who cares and why? The implementation of kanbans may require creating and updating large amounts of information This enhancement reduces the amount of Indirect labor needed to maintain kanbans

Mass Update Production Kanbans What if supplier decreases his lead time by a day? What impact should this have on kanban sizes? If I need them, how can I put new kanbans into production?

Select the Supplier that you are working with Select the Supplier that you are working with. This provides a summary view of all of his related pull sequences.

Right click on the link node and select ‘Update Pull Sequence’ Right click on the link node and select ‘Update Pull Sequence’. Modify the Lead Time attribute of the pull sequence.

Return to the Plan level node and select ‘Simulation Replan’ to recalculate the kanban sizes based on the new lead time.

Before / After comparison Before / After comparison. The kanban size has changed from 12 with a 4 day lead time to 150 with a 3 day lead time.

To use the new calculated values, right click on the node and select ‘Update Production’

Confirm your selection and press ‘Update Production’

Note: Production tab is selected. The production kanban now reflects the new container size.

Old kanban cards have been cancelled and new cards created.

Outbound Broadcast Sequence Do More Synchronize Production schedules with Suppliers Synchronize Production schedules with other Plants Synchronize Material Moves with Production schedules Know More Track the status of specific components in the replenishment cycle. Spend Less Minimize work-in-process inventory Use iSupplier to process kanban replenishments Instructions for this slide <Delete for posting> Choose 3-5 key features for your product to explain and provide screenshots w/instructions on how to demo. Group them within the Corporate Messages categories if applicable: Reduced Risk, Scalability, Better Information, Lower Cost of Ownership

Outbound Broadcast Sequence Minimize work-in-process inventory Description The presentation of some (generally unique) components to a flow line is dependent on the schedule. These component requirements must be communicated to suppliers and other sources after the production schedule has been established. Who cares and why? Operations wants to keep in-process inventory to a minimum. With optional components, they rely on procuring material once the production schedule has been fixed. Suppliers rely on the timely communication of demand signals that they will use to synchronize their deliveries.

Flow Schedule has been established and ‘firmed’ Flow Schedule has been established and ‘firmed’. Scheduling is performed ‘n’ days beyond today to account for supplier lead time

Date is a stopping point in the process. Run the Concurrent program ‘Auto Replenish’ off the Flow Scheduling Menu Date is a stopping point in the process. Build Sequence is a stopping point in the process.

Notice the ‘Non Replenishable’ Kanban card type Notice the ‘Non Replenishable’ Kanban card type. Once this card is sourced, it will be set to ‘Full’ and put on hold so no other activity can take place. The Quantity is set to the Flow Schedule quantity times the BOM usage amount.

A new attribute has been added to the Pull Sequences. Here the values are used as search parameters.

The search returned all ‘Auto Request’ pull sequences The search returned all ‘Auto Request’ pull sequences. The flag is available on the ‘Kanban’ tab.

Specific Kanban card has been created and sourced. Initial status is Empty and Active.

A Purchase Requisition has been created and released against a blanket PO. Always Recommended!

The PO Release has changed the Kanban card status to ‘In Process’ The receipt changes the Kanban card status to ‘Full’ and ‘Hold’

Collaborate With Suppliers

Collaborate with Suppliers Supplier collaboration through a single Portal Suppliers Execution - Oracle iSupplier Portal Involve suppliers in your procurement process Suppliers view or maintain agreements, orders, ASNs, receipts, returns, quality, delivery and shipment schedules, invoices, and payments Planning - Oracle Collaborative Planning Involve suppliers in your planning process VMI, including exceptions Waterfall analysis - compare customer forecasts with supply commits Global inventory and fulfillment visibility User-configurable exceptions Seamless integration with ERP Generate replenishment orders in Oracle Purchasing Share products, suppliers, order modifiers, ASLs, sourcing rules Portal Execution Planning Vendor Managed Inventory Orders Exceptions Oracle Collaborative Planning also uniquely provides integrated planning, execution, and collaboration. When both the iSupplier Portal and Collaborative Planning are licensed, they are provided to suppliers in a single unified portal. This allows you to provide your suppliers one point of entry for planning and execution data. ASNs Forecasts Receipts Capacity Invoices Pegging Waterfall Analysis Payments Suppliers, products, order modifiers, ASLs, sourcing

VMI and Consigned Inventory Automate inventory replenishment with suppliers and customers You Customer Supplier VMI Agreement - VMI Agreement VMI Agreement (with customer) VMI Agreement (with supplier) Check inventory status Send consumption advice Ship items Receive items Let’s take a closer look at the VMI and consigned inventory processes that are supported via Collaborative Planning Receive items Ship items Pay on receipt/use Pay on receipt/use

Traditional Procurement vs. VMI You Supplier Run plan Create POs Receive items Match receipt and pay invoice Create SOs Ack Ship items Send invoices You Supplier VMI Agreement - Establish inventory policy Receive items Pay on receipt Check Inventory Status Ship items VMI Agreement

AutoCreate VMI Shipment VMI Flow Clerk AP Invoice match Buyer AutoCreate VMI Shipment Plant Mgr Receive VMI Stock Consume Supplier Create Replenish. Request Ship Goods Create Invoice

Create Consumption Advice Receive consigned stock Consignment Flow Clerk AP Invoice match Buyer Create Consigned Shipment Create Consumption Advice Plant Mgr Receive consigned stock Consume Consume Consume Supplier Ship Goods Create Invoice

Create Consumption Advice VMI and Consigned Flow Clerk AP Invoice match Buyer AutoCreate Shipment Create Consumption Advice Plant Mgr Receive stock Consume Supplier Create Replenish Signal Ship Goods Create Invoice

Vendor Managed Inventory Capability Using the Approved Supplier List (ASL), enable a given item/supplier/supplier site for VMI Provide minimum and maximum values for maintaining inventory levels Supplier can optionally create blanket releases in Oracle Purchasing.

Vendor Managed Inventory Capability Trigger replenishments when available inventory falls below minimum levels Send notification to the planner of that item Available inventory equals (on-hand + requisitions + POs + ASNs + receipts) Suggest a replenishment quantity that equals (maximum – available inventory) Supplier and customer monitor inventory levels using the inventory status screen

Vendor Managed Inventory Example You Vision (M1) Vision (S1) Item: CM66354 Min: 1000 Max: 5000 Item: CM66354 Min: 1000 Max: 10000 CM66354 Allied Manufacturing,Santa Clara Supplier

Vendor Managed Inventory Blanket PO Established

Vendor Managed Inventory Item enabled for VMI at the Supplier-Site level

Vendor Managed Inventory Schedule the VMI Replenishment Engine Schedule VMI Replenishment Engine Provide Replenishment Time Fence (RTF) multiplier Supplies that fall within the time period [RTF x Processing Lead Time] are considered as available inventory Example: RTF multiplier = 1 On-hand PO1 PO2 PO3 t 1 x Processing Lead Time Total Supply = on-hand + PO1 + PO2

Vendor Managed Inventory View replenishment notification Supplier receives notification seeking approval of replenishment

Vendor Managed Inventory Viewing replenishments Suggested Replenishment Quantity, Replenishment Quantity, In process quantity Forecast:

Vendor Managed Inventory Inventory Status 1. on-hand = 0; on-order qty *= 0 2. on-hand < minimum; on-order = 0 3. minimum <on-hand < maximum; on-order = 0 4. minimum < on-hand + on order < maximum ; on-hand < minimum 5. on-hand < minimum and onhand + on-order > maximum on-hand > maximum; on-order = 0 6. 7. on-hand = 0 ; minimum < on-order < maximum * on-order quantity = Requisitions + PO + In transit + Receipt

Vendor Managed Inventory Creating Advanced Shipment Notices

Vendor Managed Inventory Receiving a VMI Shipment

Vendor Managed Inventory Viewing VMI on hand

Vendor Managed Inventory Viewing VMI requisitions and releases

Consigned Stock Features and Benefits Single receiving interface Inventory valuation, A/P accrual and item cost are not affected by consigned stock Co-mingle consigned and regular stock Full consigned stock visibility and audit On line supplier collaboration

Consume Consigned Stock Features and Benefits Explicit transfer to regular stock Rule based implicit consumption Use material regardless of consigned status Flexible and secure Affect inventory valuation, A/P accrual and item cost Current pricing Drive latency out of the supply chain by delaying the lock-in of costs

Consumption Advice Features and Benefits Automatically generated blanket release marked as a consumption Closed for receiving and not updateable Summarizes consumption transactions according to flexible billing cycles Simplify control and administration Notification vehicle for the supplier Basis for invoicing process

Consumption Invoicing Features and Benefits Consumption advices are invoiced like other purchasing documents Control invoices received from the supplier No additional training needed for AP users Suppliers can submit matched invoices through iSupplier Portal Minimize the invoice processing costs

Pay on Use Features and Benefits Automatically generate approved invoices based on the consumption advice Allows the buyer to self-bill the consigned stock usage Minimize administrative overhead for both buyer and seller while preserving full audit of the consigned stock Based on the Pay on Receipt infrastructure

Monitoring Supplier Performance Oracle provides multiple tools for monitoring supplier performance: iSupplier Portal Daily Business Intelligence Balanced Scorecard

Consigned VMI with Customers Definitions Vendor Managed Inventory - You manage inventory at your customer’s sites Monitoring of on-hand Replenishment Consigned - Pay-on-use Material ownership remains with you until it is consumed by your customer

Customer Consigned VMI Key capabilities Establish VMI replenishment policies (min/max, ROP/ROQ) Receive forecasts, on hand from customers VMI dashboard Recommend VMI replenishments Execute shipments to customers Transfer ownership / request payment on actual use by customer You Customer VMI Agreement - VMI Agreement Post forecast, consumption Receive items Ship items Consigned VMI with Customers Is defined as the process that allows you to manage inventory at your customer’s sites (monitoring of on-hand, as well as the replenishment), and to operate a consigned inventory (pay-on-use) scenario where the material ownership remains with you until it is consumed by the customer. Traditionally, this process is highly laborious and transactional oriented and provides little visibility into the customer’s inventory and demand position. It is prone to stock outs and increased expediting costs. What you want to do is move to a more automated planning and execution process. You will typically use a customer’s forecast as input to your consensus forecasting process; your own consensus forecast is input to your supply planning process, which generates the replenishment orders. On-hand at your site increases through fulfillment of the replenishment orders. This on-hand can then be used by the VMI execution process. Consigned VMI programs deliver significant benefits to both you and your customers. Key among these are inventory reduction, reduction in lead times, improved fill rates, and increasing your flexibility to react to changes in demand. Consigning the material ensures that your customer’s working capital outlay is reduced. Your ability to consign material to customers also raises the competitive bar within your industry, and will contribute to a deeper relationship with your customers. Pay on use

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