Oracle's MTO Solution for Process Industries
This is followup blog to:
In Last Blog, I discussed about Oracle’s MTO solution for process manufacturer. Let’s go a little deeper to understand how it will benefit Process as well as hybrid manufacturer. We will also see how this solution has evolved through various releases of OPM.
Start Manufacturing only after receiving customer's orders means to start a pull-type supply chain operation i.e. supply being pulled by demand. From the viewpoint of supply chain management, it has been proven that those who can meet due dates promised with customers, along with keeping inventory to bare minimum, maintain competitive advantage, irrespective of Economic Scenario. MTO forms the basis of JIT manufacturing.
Now let’s talk about the way it worked in OPM. In 11i, Reservation Rules for the item were defined. As and when Customer Orders were received, production department was asked to create a Production Batch depending on the Order and later Batch was linked with the Sales Order in the system, a crude way of getting MTO functionality with lots of manual intervention.
In R12.0 there was one more problem associated with it, no reservation rules could be defined due to which as soon as the Item gets created it could be reserved against another Sales Order defeating the very purpose.
With R12.1.1, Oracle provides separate screen to define rules specifically for MTO. It also has the functionality for checking the inventory on-hand balance, so that if there is any item available in the inventory that could be used against the Sales Order. Further, it defines against which Warehouse/ Item Type/ Item Number/ Customer the MTO rules are to be used. A new event “GME Batch Supply Reservation Notification Business Event” also needs to be enabled to notify Customer Sales Representative.
Upon creation of Sales Order for MTO enabled item, “Process Manufacturing Make to Order” concurrent request is run, which create the Batch directly from Sales Order. Item reservation window also contains the details of the Sales Order on the Demand Tab and of the Batch on the Supply Tab.
While Oracle has indeed provided MTO solution for Process Manufacturer, it is still yet to be worked in integrated fashion along with Discrete. In Hybrid environment, where both, process as well as discrete manufacturing is used, user will have to follow two different processes. But, for Process Only Manufacturer, it is a great relief; there long pending demand is finally addressed.
Release of R12 clearly shows Oracle’s increasing focus towards process industries. We are seeing more and more process specific solutions from oracle. “Outside Processing” enhancement which is pending from long time also seems to see light of day in coming future releases. For Oracle Latest Updates & Infosys solution in this space, keep visiting this blog.