Infosys’ blog on industry solutions, trends, business process transformation and global implementation in Oracle.

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February 28, 2011

Upgrading VCP to R12 was really beneficial

Two years back I attended a workshop on Advanced Planning Command Center. I was impressed with the rich features it had to offer, but a lot of them would work only if APS was on R12 platform. The very same day I was convinced that my client should upgrade VCP (APS) to R12 before rolling it out to Americas. Not that we were planning to roll out APCC any time soon, but it would bring us on a higher platform form where it would be easy to add on other VCP products like APCC. Believe me, it wasn't an easy task convincing the client to upgrade to R12 , but eventually the client got convinced and today we are seeing the benefits of being on R12 platform.

The biggest considerations were

  • This upgrade would bring us on R12 platform from where we can easily plug in any new VCP products like APCC, Demantra and use all the features offered.
  • Performance was another major aspect. We were planning to run Global ASCP plan for Americas, Europe and Middle East and Asia Pacific regions. Plan availability becomes a major factor in this and hence the plan performance. Oracle had promised 20-30% performance improvement with R12.
  • We weren't too keen on using any new features or functionalities offered in R12, but Item Simulation set in ASCP was an exception. Using this feature would let us implement item attribute changes on planning with immediate effect till permanent updates are made in Item Master.

Only EMEA was live on VCP and we decided to upgrade it to R12 before rolling it out to other geographies. While we are already seeing benefits in the areas of performance and new features, other benefit of being on the R12 platform will be seen in future when the client decides to embrace other VCP products. 

Exploring Item life cycle management options

Every country is making its Food and drug administrative control laws more and more stringent. Each country has a different requirement to get the products in specific labels formats, label colors, holograms, compositions etc. Issue is more challenging if item life cycle is short and old SKUs are getting replaced by new SKUs

Organizations with central procurement/manufacturing and global distributions are finding it challenging to manage these requirements in its end to end supply chain. Many companies have decided to have different SKUs for each requirement for specific countries whereas many organizations have decided to create SKU revisions local to each country.

Creating different SKUs helps in identifying/addressing each unique requirement separately whereas it poses a challenge in effective data management, forecasting and planning. Creating different SKU revisions helps in effective planning and forecasting but poses challenge in effective execution of transfer of required revisions in desired destination countries.

Deciding one way or another has its own challenges and it also depends on IT infrastructure and systems capabilities. Different ERP packages have their own solutions and challenges to address these requirements. Keeping discussion focused on Oracle ERP, any thoughts/benefits of handling these requirements one way or another?

Strategizing and Prioritizing of porting ERPs to Mobile Devices

In my earlier blog I had talked about why businesses will have to port ERP applications to mobile platform as smart phones populations and popularity increase and so will demand for mobile based ERP apps driven primarily by on-demand mobile workforce. However, once a business decides to go ahead with this initiative, it would be equally important to prioritize where to start and drawing up a roadmap. It would not be unusual to have conflicting perception of priority across various business units within the organization. In fact the biggest challenge could be to get buy in of senior executives including CXOs especially those who are answerable to the board.
I think the best way to get the buy in is to address needs of CXOs and senior executives themselves first. One of the primary IT tools this group uses are the business intelligence reports. Therefore porting BI reports to mobile and demonstrating how this could make job of this user group happier could be a good way to prioritize and make a start to the initiative.
Though this doesn't sound like a strategy on mobile, it could very well serve as a tactical move on the part of group within a business organization that is actually evangelizing to mobile-enable ERPs. At the same time this group of evangelizers needs to be cognizant of the fact that CXOs would always like to know the roadmap or strategy before going ahead with any initiative even if that serves their interest first. Which means there has to be a mobile strategy as well as roadmap that start with BI reports on mobile. This strategy might not be detailed, but at least should contain so-called next steps that could lead to a strategy.

Though any business unit could have power users who could be capable of evangelizing, the group that is in a better position do this is the IT organization as supposedly they are least likely to be partisan to any operating unit within the organization.

Resourcing is the next step that will need to be decided early on for this initiative. Since an IT organization is not operations-aware sufficiently to create powerful and compelling BI reports, they could or might even need to co-opt power users from other operational groups to come up with a tactical plan and business requirements of the proposed ERP solutions. Obviously, CIO or his/her trusted hands within the organization would be the best person to sponsor such initiative.

Once the right team has been assembled, the actual work would start to create strategy, roadmap, and tactical plans, which eventually will be followed by actually building the applications. Following are some of the questions that this group would need to answer for creating the strategy and plans:

  • Mobile Platform: Should the solution be platform agnostic or platform centric? Deciding this could not only be contentious but crucial for the program to succeed in the long term.
  • Platform Centric: If the solution is platform centric, the apps will be created for popular mobile platforms e.g. iPhone, Android etc.
    • The upside with this approach is that these applications could be made to look pretty and user friendly. Apps are the current trend in mobile phones and could be more readily acceptable by the user community who are already tuned to multitude of apps from Apple's Apps Store and Android marketplace.
    • The downside could be the need to select platform early on and stick to it. Even with iPhone's stellar lead, it is not given that it is going to be the leading mobile platform. In fact, Android has gained lot of market share and analysts highly rate its future success. Windows 7 is also out and its approach and layout has been widely praised by the critics.
    • Another question that arises is how to deal with Blackberries, which have been the stable of the executives over the years but are mediocre at best when it comes to their mobile apps in terms of availability and developer base. Blackberries, just because of the user base and their perceived superior security are likely not to go away that soon. Asking an executive to carry another mobile device for ERP apps in addition to their Blackberries might not be very tempting from the perspective of budget and convenience.
    • If more than one platform is chosen from amongst iPhone, Android, and Blackberry; it would increase TCO, as the solution will have to be re-written multiple times for each platform plus the attendant long term issue of software maintenance.
  • Platform Agnostic: apps will be mobile equivalent web based apps in PCs, unlike user interfaces that were created earlier using proprietary technologies such as Visual Basic, Oracle Forms etc.
  • The upside of this approach is that most applications will work across mobile platforms using their native browsers, albeit with few tweaks that might be browser specific, somewhat similar to PC landscape where apps working across Internet Explorer, Firefox, Safari etc might sometimes need similar tweaks.
  • The biggest downside with this approach is that browser based apps on smaller screens are not that pretty and might not be user friendly. User community, which is used to platform centric apps might reject the solution.
  • Tablets: There is also another angle to platforms, which is the form factor that comes with semi-mobile (not pocket friendly) devices such as iPad and other tablets that are being planned to be rolled out starting 2011. While smart phones are already well entrenched in the corporate world, predominantly the Blackberries, for now, it is not sufficiently clear if an when corporates will embrace such devices.
  • Prioritizing the Reports: While platform is being debated, another group will have to work in parallel to come up the preliminary list of BI reports that could get the most brownie points once deployed from the target CXO user group. Prioritizing is a very importance point for the BI team to consider as it is prone contention depending on who owns it and whomever has a stake in its success (or even failure).
Once the above two steps are in place, the key task to get CXO buy-in would start.

In the next blog post, I will focus on creating newer model of BI reporting.

February 23, 2011

The Business Context behind Outsourced Production

In recent years, OEMs have faced pressures from all directions to evolve innovative business models. Let us talk about some such challenges that relate to subcontracting:

[A] STRATEGIC PRESSURES ON OEMs

  1. Evolve from 'vertical integration' to 'strategic specialization':  Most OEMs started with all activities done in-house. In the recent years, this model of "full vertical integration" has lost its relevance with the emergence of specialist companies catering to specific parts of the value chain. What makes sense today is a mix of in-house activities in which the OEM chooses to specialize and outsourced activities which are not the focus of the OEM.
  2. Adjust production levels to variable market demand: The older model padded the manufacturing processes with inventory and overheads to meet demand dips and upsides. In the new world, the challenge is to adjust production capacities dynamically without incurring extra costs.
  3. Reduce lead times for delivery to a global customer base: With the opening of markets in many emerging countries, the customer base has expanded multifold. The challenge lies in serving this customer base with competitive fulfillment lead times.
  4. Reduce needs for fixed and working capital: Every lever of cost reduction has come under examination recently. The challenge is to free up capital from non-strategic activities to focus on higher value add activities.
  5. Manage shortening product lifecycles and gain access to latest technologies faster: In some verticals (like electronics manufacturing), products and associated technologies become obsolete very quickly. The challenge for OEMs is to ensure immediate access to the latest manufacturing technologies without incurring huge costs.
  6. Reduce production cost and make it a variable component: Traditionally, production costs have had a variable (dependent on production volume) and a fixed (independent of production volume) component. With fixed costs coming under the scanner, the challenge is to convert the entire production cost as a variable component.

The pressures described above have elicited innovative responses from OEMs. Though the responses differ by industry, company size, and strategic priorities among other factors, the common theme seems to be an intense focus on the core.

[B] RESPONSE FROM LEADING OEMs

The response from leading OEMs can be summarized in one statement:

"Outsource non-core value chain activities to external partners to focus on core activities that build competitive advantages"

While this statement talks about a general direction for all non-core activities, the observations specific to manufacturing function are:

  1. Standardize production processes and components and modularize product designs: Standard processes (for example - the burn-in process in electronics manufacturing that tests components and finished products by turning them on for a while and observing failures) and components (for example, the standardization of memory chips or plastics) ensure common understanding with manufacturing partners. This helps in sourcing the right raw materials with options to aggregate purchases to get the maximum quantity discounts. Modular product designs - along with concepts like "Design for Manufacturability" (DFM) - ensure the design considers the details required for manufacturing and offers opportunities to produce multiple modules simultaneously (potentially at different locations in the world).
  2. Leverage product design, manufacturing, and supply chain execution capabilities of external partners: Today, contract manufacturers offer a variety of value added services along with the core service of outsourced assembly. Leading players have developed product design capabilities (For example, Original Design Manufacturers or ODMs in electronics manufacturing). They also offer advanced services like procurement, quality control / testing, forward and reverse logistics, and repairs, to name a few. In the electronics sector, production labor usually accounts for less than 10% of the product cost, while materials account for about 70-80%. Since contract manufacturers cater to multiple OEMs and have a larger aggregated quantity to procure, their increased bargaining power can help OEMs in shaving material costs.
  3. Focus on the core: Brand Management, Demand Generation, Product Lifecycle Management, Supply Chain Coordination, Sourcing, and Customer Service: OEMs now focus on the activities they consider core (defined as activities that provide a competitive advantage) in their value chain. Brand Management, Demand Generation, Product Lifecycle Management, Supply Chain Coordination, Sourcing, and Customer Service are typically seen as core activities, with external partners filling in the voids in the value chain. Everything that is seen as a 'commodity' is typically outsourced!
  4. Shift production closer to customer and supplier hubs: OEMs now have a globally spread customer base, while contract manufacturers now have production sites all across the globe. This is a win-win situation for both parties! Contract manufacturers reduce costs and increase flexibility by locating plants in low-cost regions like East and South East Asia, Eastern Europe, and South America. These regions now have the bulk of the world's production capacity. The spread of manufacturing capacity enables OEMs to cater to customers with production facilities located in the same region. This cuts down the lead time for customers and provides opportunities to localize products and processes as per customer expectations and regulatory requirements.

Key enablers provide a supporting infrastructure to make these best practices viable.

[C] KEY ENABLERS FOR CONTRACT MANUFACTURING MODELS

  1. Emergence of low-cost regions specialized in outsourced production (Enables rational and low-risk outsourcing decisions) In addition to this, as each contract manufacturer matures in handling increasing responsibilities, the OEMs have broader choices and lower overall risk.
  2. Reforms in international trade and regulatory barriers(Enables international outsourcing of production activities) With overall reduction in protectionist measures like tariffs and controls and with formation of special trade groups (like NAFTA and ASEAN), outsourcing relationships have become more viable and cost effective.
  3. Maturity in international telecom infrastructure (Enables real time collaboration between value chain partners) New technologies based on the Internet and social media enable real time enterprise collaboration through portals, web services, and standardized message exchanges. This increases the value chain visibility - which in turn alerts the OEMs of operational risks in advance.
  4. Establishment of standards in international transport (Enables free flow of goods with short lead times) The transport industry now offers many guaranteed service levels (like overnight shipment) at optimized costs. The emergence of specialized external providers in the transportation sector provides opportunities to access value-added services like transportation spend optimization, shipment consolidation, shipment tracking, border clearance, and denied party control to name a few.

February 22, 2011

Oracle SOA 11g - One Less, One More

Guest post by
Prasad Jayakumar, Technical Lead, Oracle Practice, Enterprise Solutions, Infosys Technologies Ltd

 

One Less, One More™ -  "one less negative thought or action, and one more positive thought or action, and soon our lives will be less stressful, and if practiced as a community [...]  would move in the direction of our collective goals, dreams and desires" by Robbie Vorhaus,  Communications, crisis and reputation advisor.

Oracle acquired many best-of-breed products on SOA landscape may be for architecture excellence or for concept/idea or for market share or to fill the void or based on some other strategy which only acquisition experts know.  But, what's interesting is how Oracle managed to unify all the acquired products and paved a path to Success as a corporate and for Oracle SOA practitioners.

In my personal opinion, I believe Oracle adopted "One Less, One More™" to build less stressful Oracle SOA 11g.  To me, I see the transition from Oracle SOA 10g to 11g as follows-

Oracle BPEL & Mediator

One less negative - Oracle BPEL and ESB in 10g had different engine, different console, different error handling framework, different deployment strategy and few more.  One good aspect was both complemented each other.  In an over-simplified way, I could tell Oracle BPEL and Mediator (ESB) is unified in Oracle SOA 11g. Unified console, Unified exceptions handling, end-to-end instance tracking and many more.

One more positive - Oracle SOA 11g has been re-architected based on Service Component Architecture (SCA) standards.  By this Oracle had taken a major step towards aligning to standards and simplifying SOA.  Service Data Objects (SDO), Event Delivery Network (EDN), Meta Data Services (MDS) and few more have been introduced in Oracle SOA 11g. Extreme performance and scalability has been provided based on the default JEE infrastructure which includes Weblogic Server, JRockit and Coherence.

Oracle B2B

One less negative - Oracle B2B 11g shows phenomenal transition from not so good user interface in 10g to the more intuitive one in 11g.  Sometimes I feel Oracle B2B 10g user interface is like a maze and most often I get lost without manual.  Oracle B2B 11g is a smooth sail.  I could complete the entire work end-to-end without much external help.

One more positive - With Oracle B2B 10g already supporting an extensive set of protocols and standards, 11g provides few notable features which mainly revolve around operations, security and performance.

Oracle BAM

One less negative - Oracle BAM 10g was an odd-man out being .NET application running on Microsoft IIS. Probably Oracle acquired for sheer architectural excellence.  Oracle BAM 11g is based on JEE, a complete rework.  How else Oracle can tell SOA practitioners about their commitment level in achieving unified and simplified SOA? Kudos

One more positive - Rich data source integration, better security, improved internationalization and localization, enhanced real time alerting & action and many more

There are similar radical changes in Business Rules, Oracle Web Services Manager, Oracle Human Workflow and few more.  Wish list for a radical change in terms of unification and simplification goes for Oracle Service Bus, Oracle Data Integrator and Oracle Enterprise Repository + Oracle Service Registry.

Hope you wish Oracle to succeed.

Integrated Operations and Services Planning

Businesses where Installations are a significant portion require a high degree of integration, alignment and trust between Project Management and Supply Chain Management. 

Businesses where Installations are a significant portion require a high degree of integration, alignment and trust between Project Management and Supply Chain Management.  Some of the key design considerations for this integration are as below:
1. Project Milestone Visibility - Supply and Demand planning processes should have real-time visibility into project milestones dates allowing supply chain planning to adjust to changing priorities across projects.
2. Commit / Re-commit Visibility - Project management should have real-time visibility of supply plans and be able to identify accurate availability of required material. This supply availability should be based on current firm supplies as well as on supply chain's Capability to Promise 
3. Project Warehouse Inventory Accountability:  A proper incentive structure is necessary for aligning individuals' efforts with overall business objectives.  Therefore, clear accountability and an incentive structure based upon inventory levels of the Project Warehouse(s) should be established.  This will encourage Project Managers to request the material only when needed and minimize inventory levels in the Project Warehouse(s).
This is turning out to be a key requirement for the Hi-Tech industry.  With this background I would like to initiate a discussion on how we go about designing an IT solution for the above requirement using oracle based products.


 

February 21, 2011

Enterprise Biz-Apps Tracker

In continuation with my previous blog on use of Oracle Quality to manage business issues, we are now delving deep into our discussions with the next feature of Oracle to help you in managing your intellectual assets as part of our Oracle E+ series of blogs.

This Blog talks about the use of Oracle ERP as a single source of truth to track the cost of Enterprise Biz applications.

Once an ERP is implemented, the enterprise acquires a new intellectual asset. This intellectual asset will be added to your list of fixed assets. Though this asset will depreciate over a period of time, significant cost is also incurred in maintaining the asset and enhancing the existing functionalities. At times new business locations / sites will get added and the solution foot print will be extended to the new business sites. The cost of such projects should get added to the capital cost to the so called ERP asset. The enterprise treats all these activities as individual projects.  There is also a need for the enterprises to use the ERP system as the business system and reduce the use of stand alone or legacy systems. The purpose of this approach is to make ERP as single 'source of truth' business system than just a financial reporting system

The broad heads under which cost is incurred for ERP systems are:

1. Continuous or discrete enhancements to the existing functionalities of ERP system. 
2. Extending the solution foot print to the new sites / business units
3. Upgrading the application to the newer version as and when a new release occurs
4. General maintenance of the ERP system by housekeeping, back up, adding the new user groups etc.,
Absence of such solutions result in

1. Manual / stand alone transactions to track the costs associated
2. Additional reporting solutions are to be developed
3. Legacy systems continue to exist though a powerful ERP system in implemented

 The effective solution available in Oracle is to define a project that is associated to the ERP system and add each of the above activity as a task and track the expenses associated. A new task can also be added for each enhancement. By enabling the project management module of Oracle project suite, it is possible to maintain and track the project schedules, progress as well. The ERP application itself can be defined as an asset and can be associated to an active project in the Project suite of modules.

The advantages of such a solution is

1. Financials are reported within ERP
2. Maximum use of ERP functionalities
3. Legacy systems can be faced out at the earliest
4. No manual tracking required

Other legacy systems and cost involved in maintaining them can also be defined as projects and tracking will be made easier. Also, all these costs can be rolled out to a master project called 'Business applications'.

One doubt would certainly arise in the minds of a consultant: "What to do if the projects suite of modules are not licensed nor installed?"

The solution in such cases is to install Projects modules in shared mode or negotiate with Oracle licensing team and try for these solutions and it is worth it!!!

Catch you in the next blog post where we will discuss more business scenarios and more tips to handle the same till then.....cherish and think through the impact of Oracle E+ (Efficiency Plus)

February 18, 2011

Do we need SOA Governance ?

Guest post by
Prasad Jayakumar, Technical Lead, Oracle Practice, Enterprise Solutions, Infosys Technologies Ltd.

 

In my recent client discussion the ever pondering question popped up, "Do we need SOA Governance?" Definite YES, I told without second thought. If they would have asked me "Do we need SOA?" the answer would have been based on whether business is ok to WALK or wants to DRIVE.  Since the question was about governance, it is as simple as saying "If you want to drive safely, better hold a valid driving license."

Is driving a metaphor of some kind? Why am I repeating it?  Let me give a try to convenience my alter ego.  

   Real World   SOA World
 People  Driver
 Police Officer
 Developer
 Analyst
 Architect
 Process  Department of Motor Vehicle (DMV)
 Traffic Rules & Regulations
 Sign Boards
 SOA Organization
 Service Life Cycle
 Service Principles & Guidelines
 Technology  Fancy Cars  Oracle
 What if, Governance is not in place?  Accident prone
 Traffic congestion
 Chaotic, need luck to reach home
 Rouge Services
 Sub-optimal solutions
 Chaotic, no clue on ROI

People, Process and Technology is the critical chain of SOA Governance. Dr. Eliyahu Goldratt (Business Management Guru) says in his famous novel "Critical Chain" - "Here is the weakest link. I strengthen this link. The whole chain becomes stronger. I strengthen it again, the chain becomes even stronger. I strengthen it again, Nothing happens.  Why? It's not the constraint anymore.  So, we have to avoid inertia and go back to step one."

Based on this learning if we think, Process would be weakest link in our critical chain.  We need to strengthen by defining-

  1. SOA Organization -
    • Who should be part of the Organization?
    • What is he/she responsible for?
    • How should he/she execute?
    • Are the few things that has to be clearly defined
  2. Service Life Cycle
  3. Service Principles & Guidelines and many more

Once Process is no weaker, the next possible candidate would be People.  Until People follow the Process by practice, People are weaker.  Finally Technology will come.  Ironically Technology has grown stronger by many manifolds and that's the reason for all the discussions.

Happy SOA Journey! 

February 7, 2011

Oracle Production Scheduling-Shop Floor Mantra to Success

Production Scheduling is oracle's latest tool for Shop Floor Operations / Resources Scheduling optimization. It's a standalone application and can be integrated very easily with manufacturing planning and execution systems. Production Scheduling can be integrated with Demand Management (Demantra) and Oracle APS to leverage best planning / Manufacturing & Scheduling outcome. This tool is highly used in environment where Production Volumes are high or Production constraints are higher because of its capability to perform constraint based scheduling. Key strength of Production Scheduling is it's User interface which can show multiple views together in one screen and help user making the decision process and identifying bottleneck resources if any.


How Production Scheduling Works?

Model Creation: Production Scheduling requires a Model representing production capacity of the enterprise to create a feasible production schedule.
Model Consist of: a) Resources b) Operations c) Routings

Model Data Required: a) Item & Item level b) Safety Stocks c) Work Orders d) Supply & Demand Information

Solving a Model: Changing Model data till it meets production requirements. Data which can be altered like Priorities, increasing capacity, manual changes to operations, Change in Supply / Demand, Change in capacity, Maintenance Requirements.

Publish a Production Schedule: Final Model can be published to Shop Floor for execution and you can also export this data to external system like Oracle EBS or any other legacy.

New Features in Production Scheduling:

This Production scheduling tool which replaces the old oracle manufacturing tool in many aspects mentioned below:

Automatic Floating Bottleneck Detection:

PS is capable of handling floating bottlenecks in shop floor and works on technology called "Constraint Directed Search" (CDS).
Bottleneck on shop floor keeps on floating from one resource to another based on variation is
Supply- Demand. PS is able to detect this automatic floating bottleneck and display
bottleneck resources to Scheduler.

Advance Analytical Decision Support:
This user interface also known as Production Pegging View tells scheduler about what are the supplies (Purchased or Manufactured) is available against each demand line item along with the delay time if any and reason, Sorting of Demand either by Sales Order / Forecast and can be further drill down by customer types, demand types etc., Graphical view of the demand fill rate is shown etc. This information helps user to make a quick decision on the next action to be taken.

Direct Scenario Comparison:
In Production Scheduling module planner can simulate different scenarios and compare the
KPI's of each scenario to come out with the best suited one for the given situation. This is a
unique feature which gives Oracle Productions scheduling a cutting edge over other
technology especially old oracle manufacturing scheduling.

Intuitive Data Model:

This stands for the ability to Modify data related to Operation-Resources, Supply -Demand, Work Order &
Calendar. User can edit Supply-Demand data, Work Order data, and changes operations-resource combinations
to analyze the impact and take the final best possible decision.

For further information on the above features, you can refer to the Oracle Production Scheduling user guide at
oracle metalink.

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