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Demand to Deliver Solution—Remedy for Supply Chain Cost Inflation in Hi-Tech Companies

Previous post:
http://www.infosysblogs.com/oracle/2010/03/invigorating_the_topline_of_hi.html#more


"May you live in interesting times"—Chinese curse or not, this adage is truer for the recession hit Hi-Tech companies in recent times, as they struggle with challenges around shrinking margins, pressures on new product introductions, globalization and increased supply chain complexity. Our recent experience in the field has shown that Hi-Tech Clients are increasingly looking at process centered open framework driven IT investments to serve as a source of competitive advantage instead of taking a module centric approach to Enterprise Applications. The expectation is to have a seamlessly integrated, end to end ecosystem of applications that provide visibility to all demand signals, balance demand, supply and budgets in one system, reduce inventory carrying costs, enable partner negotiations and have access to concurrent analytics and Business Intelligence. The Demand to Delivery (D2D) solution jointly developed by Infosys and Oracle caters to this paradigm shift in expectations from the players in the Hi-Tech value chain. The solution comprises of 8 key process sub areas, namely—Sales and Operations Planning, Demand Management Sensing and Shaping, Strategic Sourcing, Operational Planning and Production Scheduling, Fulfillment and Warehouse Management, Logistics and Retail Execution.

What’s in it for Hi-Tech players and what is the value proposition of the solution, one might ask. The value levers for the D2D solution primarily centers on Net Revenue Improvement and Cost Reduction. In an earlier blog post on the D2D solution, we covered the operational levers through which Net Revenue Improvement can be achieved and how the D2D solution enables them. The solution can also be used derive value on the cost of side of the P&L statement and the operational levers for cost reduction primarily come under the following categories:

  • Optimized Inventory using a combination of Sales and Operations Planning, Production Planning & Scheduling
    • Complete visibility to support revenue and margin growth plans leading to Inventory Optimization
    • Optimized production plan integrated with shop floor execution
       
  • Higher Efficiency using Sales and Operations Planning, Strategic Network Optimization and Manufacturing Execution
    • Due to a balanced network to support strategic business objectives
    • Ability to React immediately to disruptions in the supply chain
    • Reduced manufacturing costs with integrated MES
    • Ability to Manufacture the most profitable product mix
  • Lesser Capital expenses using Manufacturing Execution System and Warehouse Management Systems
    • Ability to integrate outsourced manufacturing to reduce capital expenses
    • Improved manufacturing productivity through integrated and balanced MESIncreased asset utilization
    • Improved warehouse space, labor and resource utilization
    • Maximized utilization of labor, space and equipment
  • Lower Sourcing Cost using Strategic Sourcing applications like Oracle Sourcing, Sourcing Analytics, Price Protection and Ship and Debit
    • Online negotiations and bids with automatic recommendations
    • Cross-functional collaboration with internal and external partners
    • Sourcing knowledge capture and total cost analysis
    • Reduce sourcing event times and sourcing costs
    • Drive sustainable savings by enforcing negotiated terms
    • Improve effectiveness and efficiency of sourcing
  • Lower Transportation Cost using features of Oracle Transportation Management
    • Reduced transportation costs resulting from load optimization
    • Ability to Assess the financial impact of proposed rate changes
    • Reduced transportation costs by optimizing bid execution
    • Reduced claims management costs

While this provides a 20,000 feet view of the benefits, watch this space for more ground level details on the solution……

 

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