Using Oracle ASCP Engine in

Developing a Successful Global

Sourcing Strategy
Agenda

• Introduction
• Global Supply Chain Management
• Advanced Supply Chain Planning (ASCP)
Demand and Supply
Planners Workbench
• Other Production Procurement Modules
Purchasing and e-Commerce Gateway
iSupplier and iProcurement
The “Virtual MRB” using Oracle Quality
• Question & Answer
Paul Kirch Qualifications

• B.A. Spanish/ Economics from Dartmouth College

• Certificate, European Studies, the University of Coimbra, Portugal
• MBA in International Finance; CPA (licensed in the State of Maryland);
Stanford’s “Global Supply Chain Management” program; CFA candidate.
• 7 years experience with the Big 4 and 5 years experience with Oracle
Consulting as a Practice Manager in Oracle’s global consulting practice
• Director, Oracle Consulting at The Hackett Group
• More than 5 years experience living and working “in-country” in Europe,
the Middle East, North and South America, and Asia
• More than 12 years experience with Oracle applications and more than
15 years experience in consulting. 20 years experience overall
Agenda

• Introduction
• Global Supply Chain Management
• Advanced Supply Chain Planning (ASCP)
Demand and Supply
Planners Workbench
• Other Production Procurement Modules
Purchasing and e-Commerce Gateway
iSupplier and iProcurement
The “Virtual MRB” using Oracle Quality
• Best Practices Applied
• Question & Answer
Global Supply Chain Context
• A Supply Chain describes the facilities and systems that
support the flow of information between a company and it’s
suppliers – and their suppliers – and itself; as well as the flow of
information between a company and it’s customers

• As supply chains become more global, companies find

themselves challenged managing sales, manufacturing and
distribution across companies and region Sales entities Distribution Entities Manufacturing Entities
North America Houston
Mexico San Luis Potosi
UK/Mechelen Big Blue Stamford

• The typical multinational looks like this: Norway

Italy
Mechelen
Oslo
Milan
Spain Madrid
Dreieich Ingolstadt
Craiova
India Ahmednagar
Singapore Singapore
Australia Australia
China Wuxi
 Definition of Terms

• A company’s operations may

be divided into sales, distribution
and manufacturing operations
External
Customer Order
Order

• Sometimes these operations

Shipment Order Order

Sales Entity Distribution Entity Manufacturing Entity

can be found within one facility, Procure Product from Procure Raw Material
Customer Order Manufacturing or from Suppliers and Sub-
Fulfilment - Supply Distribution Entities. assemblies from Sub-

oftentimes for the modern MNC,

Finished Product to contractors.
External Customers. Procure Parts from
Suppliers. Manufacture Product
Procure Finished

these facilities are scattered Product from Distribution

or Manufacturing
Entities.
Supply Finished
Product to External
Sales Entities.
Supply Finished Product
to External Sales
Entities.

around the world Supply Product to

Distribution Entities.

Shipment Shipment

Shipment
Order

External Shipment
Supplier
Global Supply Chain Issues

• How do you manage reliable delivery lead times to the customers, in the
face of varying supply lead times from factory?

• How do you manage inventory required to respond to fluctuating customer

demand, so that the inventory is available when you need it, but it is not
necessarily “on the books”?

• How do you provide supply chain visibility to internal and external supply
chain partners?

• How can you automate the entire Supply Chain process from initial
Sourcing through PO generation, material receipt, quality inspection, to
create the “touchless PO” (Cisco) or “virtual supply chain” (Qualcomm)?
Identification of “Push” vs. “Pull” Point
FROM: TO:
Predominately “Push” “Pull” from the Customer
Kanbans (mostly), Safety
Build to Stock
Stock Demand Triggers

Sales/ Manu disconnected Sales forecast drives Manu

Poor Information Flow Defined Information Flow

Complex Processes Simplified Processes

McDonalds Wendy‟s
“We do it for you” “We do it your way”
Global Supply Chain Management

• Oracle Sourcing module works in tandem with Oracle Procurement

• Once a supplier has been identified and the contract negotiated, the
relationship with the supplier is maintained through the Approved Supplier
List (ASL) functionality in Oracle
• Oracle Sourcing allows users to:
RFx Quotes
• Source globally Contracts
Auction
Offers
Bids
Counteroffers
/ Catalogs Sourcing
• Conduct auctions on-line Approval
Purchase
• Rank responses Order
Receipt
Procurement Time Entry
• Qualify winner Process Payment /
Reconciliation
Automation
• Negotiate contracts
Global Supply Chain Management
Assess Needs Gather Info Optimize Decisions
• Identify opportunity • Identify sources • Weight attributes
• Establish sourcing • Qualify supplier • Rank bids
strategy • Develop Bidder’s List • Evaluate scores

Analyze Develop Qualify Negotiate Evaluate Award

Develop Requirements Manage RFx Award

• Gather Specifications • Define rules of engagement • Determine winner
• Define key attributes • Initiate negotiation • Notify participants
• Aggregate items & services • Receive Responses • Send POs/Contracts

Monitor Supplier Performance

• Price, quality, delivery, service
• Basis for new supply decisions
Agenda

• Introduction
• Global Supply Chain Management
• Advanced Supply Chain Planning (ASCP)
Demand and Supply
Planners Workbench
• Other Production Procurement Module
Purchasing and e-Commerce GatewayiSupplier and
iProcurement
The “Virtual MRB” using Oracle Quality
• Question & Answer
Functional Footprint

• Demand driven by forecasts and Sales Orders

• Business Process: Demand drops into the Planners Workbench, Planners
route “make” orders to the Shop Floor Control System and Buyers “buy”
items to the supplier; PO’s are created and transmitted to Suppliers via EDI
• Entire production procurement process is automated, end-to-end
Generate Constrained
Generate Baseline Forecast
Long Term Supply Plan
Solution Footprint:
Collaborative Demand Generate Short Term
Planning Manufacturing Plan

Generate Consensus Release Work Orders

Forecast to Contract Manufacturer iSupplier E-Com
Demantra ASCP PO/ AP Portal Gateway
Capture Inventory Release Purchase Orders
Visibility to Component Vendor(s)

Collaborate with Check Availability DBI used for KPI / Metric reporting
Contract Manufacturer & Capacity (ATP)
Demand Management
Sales Forecast Demand
Plan

Demand Forecast
Loaded to Inventory

ASCP Planning Engine

Incoming
Orders Sourcing Sourcing
Internal Inventory Supplier

Planned Planned
Orders Orders

iSupplier
WIP Purchasing Portal/ EDI
Gateway
ERP Module(s) vs. ASCP Module

ERP ASCP
(Dynamic Data) (Static Data)

• Sales Orders
• Customers
• Plan (MFG-REGEN)
• Forecast
• Material Scheduling Method
• Items
• Plan Horizon
• Master Data
• Forecast Spreading
• BOM
• Consumption Rules
• WIP
• Organizations
• Inventory
• Forecasts
• PO
• Netting Rules
• Suppliers
• Planner‟s Workbench
• Cost
• Data Collection
• Shipping Networks
• Sourcing Rules
Plan Names

ASCP Plans defined to the Planners WB …

MFG-REGEN: Weekly Regen

Weekly Production run

MFG-SIMDLY: Nightly Plan

Weekly inventory, order status changes

MFG-SIM: Simulations, „what-if‟ scenarios

Plan Creation

Plan is created by the Master

Scheduler
ASCP Plan Definition

Material Scheduling Method,

Forecast Spreading,
Organizations to include and
Netting are defined (to
name a few plan attributes)
How does the data get from ERP to ASCP?

ERP ASCP
(Dynamic Data) (Static Data)

• Sales Orders
• Customers
• Plan (MFG-REGEN)
• Forecast
• Material Scheduling Method
• Items
• Plan Horizon
• Master Data
Collection • Forecast Spreading
• BOM
• Consumption Rules
• WIP
• Organizations
• Inventory Transfer of ERP • Forecasts
• PO transactional data • Netting Rules
• Suppliers to the ASCP • Planner‟s Workbench
• Cost Engine; new plan • Data Collections
• Shipping Networks generated
• Sourcing Rules
ASCP Supply / Demand
Manufacturing Orgs Sales Orgs

001 050 125 225

Manufacture SO #1 SO #2 SO #3

Demand: Planned Order Demand

Manual Discrete Jobs
Safety Stock Demand: Sales Order
Supply: Inventory
Purchase Order
Forecast
002
Discrete Job
Planned Order
Safety Stock
Mexico

Demand: Planned Order Demand

Supply: Inventory
Manual Discrete Jobs
Safety Stock
Purchase Order
Supply: Inventory Planned Order
Purchase Order
Discrete Job
Planned Order Make or Buy??
006
Sourcing Rules
Bldg W
Purchase from Purch Req  PO
Demand: Planned Order Demand Transfer from  Planned Order
Manual Discrete Jobs Demand
Safety Stock
Supply: Inventory
Purchase Order
Discrete Job
Planned Order
ASCP Output

Supply Demand View

D: Org 225 – Sales Order/Forecast 10-V6991-210

S: Org 225 – Planned Order 10-V6991-210

D: Org 006 – Planned Order Demand 10-V6991-210

S: Org 006 – Planned Order 10-V6991-210

D: Org 006 – Planned Order Demand 20-V9900-1

S: Org 006 – Planned Order 20-V9900-1

D: Org 001 – Planned Order Demand 20-V9900-1

S: Org 001 – Planned Order 20-V9900-1

Planned Order Life Cycle
Sales Order
Forecast Released
Planned Order Demand Unreleased
Discrete Inventory
Discrete Job
Job
Make (WIP)
Planned Order Release
or Buy?

Purchase Purchase
Inventory
Requisition Order

• Demand • Release • ASCP may • ASCP will • Supply

recommend to not move a
• No Demand, No • Sourcing Rules/ ASLs for reschedule Firmed • Discrete
Planned Order Buy items indicate Supplier existing POs, discrete job job
PORs and completions
• Drives Planned • Sourcing Rules for Make discrete jobs • ASCP will become
Order Demand for items specify which Org to generate inventory
components make the assembly in • ASCP will exception
generate messages • PO receipts
• Negative • Unreleased Planned exception to become
inventory drives Orders are regenerated each messages for reschedule inventory
demand time the ASCP plan runs all items as needed
Discrete Job Definitions

Assembly: Item to be stocked at completion of Discrete Job

BOM: Creates the Discrete Jobs Parts List (11 levels deep)

Routing: Applies the Discrete Jobs Lead Time

Supply Type: Dictates how components are issued to the Job

A) Push = issue components to job at job start

B) Assy Pull = backflush components at job
completion
C) Bulk = „as required‟ components, no issue
D) Operation Pull = not in use in phase 2

WIP Acct Class: Contains accounting information for the discrete job
Querying in Planner’s Workbench

Right click over the plan

or organization, select
Supply/Demand and
Supply/Demand
Querying in Planner’s Workbench

Enter your search criteria:

Conditions:
Equals
Is Not
Less Than
Querying in Planner’s Workbench

You can search for the following Criteria:

BOM Item Type New Date Selected for Release
Buyer New Qty Source Organization
Category Old Due Date Source Supplier
Compression Days Old Order Quantity Suggested Dock Date
Day from Today Order Number Suggested Due Date
Demand Satisfied Date Order Priority Suggested Order Date
Disposition Status Type Order type Suggested Start Date
Firm Organization Supplier
First Unit Start date Original Item Task
Implemented Quantity Po Line No Using Assembly
Item Planner VMI Flag
Last Unit Completion Date Planning Group WIP Supply Type
Last Unit Start Date Project
Lending Project Number Quantity in Process
Lending Task Primary Supplier
Line Repetitive
MRP Planning Method Standard Cost
Make or Buy WIP Supply Type
View Planned Orders Current Week
View Planned Orders Current Week
Actions and Exceptions
Supply and Demand
Vertical Plan
Planning Time Fence Setup
Item Master Planning Tab

Indicates an
“Active Item”

Create Supply
to Match
Demand

Defines period
for which
releases created
ASCP Process Overview
Agenda

• Introduction
• Global Supply Chain Management
• Advanced Supply Chain Planning (ASCP)
Demand and Supply
Planners Workbench
• Other Production Procurement Modules
Purchasing and e-Commerce Gateway
iSupplier and iProcurement
The “Virtual MRB” Using Oracle Quality
• Question & Answer
iSupplier Functionality Overview

• Self-Managed Supplier Profile

• On-line Invoicing
• View and Acknowledge Purchase Orders
• Supplier Change Requests
• Audit Purchase Order Changes
• Access Attachments
•Advanced Shipment Notices (ASNs)
• Advanced Shipment Billing Notices (ASBNs)
• Supplier Owned & Vendor Managed Inventory
• Supplier Forecast
Oracle iSupplier Registration
Register Existing Supplier
Responsibility: iSupplier User Administrator
Navigation: Supplier User Creation > Register Supplier User

The iSupplier User Registration

portal will open
Oracle iSupplier Functionality
Purchase Order Summary Screen
One of the benefits of the iSupplier portal is the ability to view Purchase
Orders and Releases. The Orders At A Glance region will display the 10
most recently submitted Purchase Orders.
iProcurement Implementation
Pre-Phase II Post Phase II
Div2 Div3 Div4
Non-Prod EMR
Div1 AME
Div5 Div6 Div7
Div8 Non-Prod
Div9 Div10 Prod PO
FG

EMR AP
FG
PO R
QFlow
R AP QCT GL
BU1 BU2
GL
PS PS

• Used EMR as iProcurement “stand in”

• iProcurement rollout potentially complex
• “Chicken and the egg” problem
Supplier Owned/ Vendor Managed Inventory

Is Does Supplier
1.0
Supplier Set Have Access to
Define No
Up for Pay On iSupplier
Consigned
Use? Portal?
Relationships
Buyer

Yes 9.0
Send
6.0 Consumption
2.0 7.0
Consumption
Purchase (or Run „Pay on Advice to Supplier
Advice (Blanket
Bring In) SOI Receipt Auto
Release)
Invoice‟ Program
Created
Receiver

3.0
Receive SOI

4.0
Yes
Material Coordinator

Consume SOI
for Usage

5.0
Run Create
Consumption
Advice Program

12.0
8.0
Payables

15.0 Invoice
Invoice Entered for
Import Invoice
Automatically SOI
into Payables
Created Consumption

13.0
10.0
View
11.0 Receive
Consumption
Send Invoice Consumption
Advice via
Advice
iSupplier Portal
Supplier

Create Invoice
14.0
Yes via iSupplier No
Create Invoice
Portal?
“Virtual” MRB Process/ Oracle Quality
Material Receipt into MRB Inventory
Factory

Work Order
NC Rework
NC
MRB Process
Sub Start
Repair
Vendor
Inv Move
OSP
RTS
(Buyer) Disposition “Accept,
Sub (SQE) Use as Is”
Scrap
RTS/RTV
Supplier ( Credit/ SOI) Hold
Key
Scrap Automated
Manual
Agenda

• Introduction
• Global Supply Chain Management
• Advanced Supply Chain Planning (ASCP)
Demand and Supply
Planners Workbench
• Other Production Procurement Module
Purchasing and e-Commerce Gateway
iSupplier and iProcurement
The “Virtual MRB” Using Oracle Quality
• Question & Answer
Conclusion

• Q: How do you manage reliable delivery lead times to the

customers, in the face of varying supply lead times from factory?
• A: Delivery lead times can be managed setting the delivery time
fence parameter and ASL parameters.
• Q:How do you manage inventory required to respond to fluctuating
customer demand, so that the inventory is available when you need it,
but it is not necessarily “on the books”?
• A: Use SOI/ VMI to mange vendor inventory and ensure that
inventory from critical suppliers is available when needed.
• Q: How do you provide supply chain visibility to internal and external
supply chain partners?
• A: iSupplier Portal
 Next Steps

• Copy of presentation  business card

• Needs assessment  meeting
• More information  e-mail

Paul Kirch
Director, Oracle Consulting
The Hackett Group
[email protected]
cell phone: 408-316-5899
Q&A