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Centralized planning: From cloud to reality

 

Introduction

The recently published point of view (POV) on 'Oracle Planning Central Cloud' takes a new look at the deterministic planning approach and schedules for a centralized planning architecture. The document, which can be accessed here, states that Oracle planning system - Material Requirements Planning (MRP) - started with a decentralized planning method. Gradually, Oracle shifted toward a centralized approach with Advanced Supply Chain Planning. Thanks to the Internet and cloud, Oracle has moved towards that paradigm shift and can now perform centralized planning and control operations on cloud using planning central cloud. The latest release (Rel 11) of Planning Central Cloud is a powerful tool ready to unleash the potential of cloud to supply planning, bring a long term aspiration - into reality.The cloud is a place where all relevant data, information and applications are stored and made available for all -- locally and centrally -- while individual local facilities have their own configuration and policies that provide the required flexibility. 

Oracle Planning Central Cloud

Oracle released its first, cloud-based, planning system in Oracle Supply Chain Cloud Release 11 that offered the capability to create one plan that can execute demand, inventory, and manufacturing / supply plans at one go. This improves the deterministic approach of the supply planning system. The idea is to host the Supply and Demand planning solutions in cloud servers with Software as a Service offereing. This SaaS planning system will collect data from other Oracle cloud systems like Order Management Cloud, Manufacturing Cloud, Procurement Cloud etc driving a centralized standard ownership and processes. In a globally spread setup (manufacturing or distribution) having geographically spread locations (many facilities), the cloud based planning system enables to define a central plan available to all facilities. This system also enables the individual local facilities to have its own arrangements, constitution, and composition of material policies bringing in the required flexibilities with seamless access to data and security.  

Today, Oracle Planning Central Cloud is getting established in the market, and we take a brief look at how it is enabling deterministic and centralized planning.

Demand planning

Planning Central's demand solution automatically determines the best forecasting model according to data and has built-in features to incorporate seasonality and outliers. It generates forecasts based on shipment or booking and selects the most suited statistical engine to reduce forecast errors. Forecast can be managed at different hierarchies like product family and it has new product forecasting functionality also. It also provides the ability to load forecasts from an external system like sales or customer forecasts. This enables a capable deterministic planning system.

Inventory planning

From an inventory perspective, Oracle Planning Central Cloud automatically calculates buffer stock (safety stock) while minimizing inventory in order to increase service levels. Planning Central considers demand variability along with metrics such as mean absolute devices (MAD) and mean and absolute percentage error (MAPE -- which is a forecast error), when it calculates safety stock levels. It can also use the 'days of cover' paradigm to calculate a safety stock level that varies according to time. Safety stock can also be imported from external system if required so.

Supply planning

Planning Central offers an in-memory, unconstrained planning capability. It balances demand with supply to reduce inventory and prevent stock-outs. It uses the functionality of sourcing rules and forecast consumption. It recommends new supplies and reschedules or cancels existing supplies. It also applies business rules like effectivity dates on components, expiration dates on inventory lots, and reservations of on-hand inventory. Planning Central's supply plans can model outsourced manufacturing and delivery scenarios, including drop shipments and back-to-back orders. Hub and spoke configurations are supported as well.

Response and Analytics

Planning Central has built-in integrations with other Oracle Supply Chain Management (SCM) cloud applications to auto-release, release orders manually, and synchronize updates. It provides a configurable planner workbench allowing planners to view multiple plans and plan inputs simultaneously. Planners can create user-defined page layouts.

This planning solution also has a unified data model and data analysis hierarchies that are shared across demand and supply planning functions. It enables planners to analyze planning results at arbitrary aggregate levels (for example, at a category such as business unit level), and to view demands and supplies across products (having different base units of measure) by using a single consistent reporting unit of measure such as a currency unit of measure.

Data collection

The collection process gathers all master and transaction data. These sources give a complete picture of the supplies that are being held, moved, built, or bought.

Benefits of Oracle Planning Central Cloud

The benefits of Planning Central Cloud are more than obvious. It helps organizations gain compliance in standards, better forecasting, optimized cost, reduced hiring and training costs, higher customer satisfaction, and lower recovery costs through better quality control and more appropriate and timely responses to irregularities and disruptions. Here are five primary benefits:

  1. On-demand capacity augmentation: Planning systems traditionally require a lot of infrastructure that have to be structured and allocated in advance based on the type of plan, the volume of data, and number of users. Planning Central Cloud allows us to increase or decrease capacity in real-time; this helps customers start with a baseline configuration of resources and then increase the capacity as per the demand. This way we can avoid huge CAPEX investment at the start of the project.

  2. Enhanced security: Oracle cloud provides security best practices and measures integrated into the architecture at all levels. It is much more enhanced and precise compared to traditional infrastructure.

  3. Enhanced planner productivity: Through configurable Planner's Workbench, productivity is bound to improve by planning inputs simultaneously, viewing multiple plans, using user-defined multi-pane page layouts, and switching layouts

  4. Advanced analytics and spreadsheet integration: Oracle Planning Central Cloud provides advanced analytics feature along with excel integration through ADF desktop integrator. 

Conclusion

Planning Central Cloud release 11 is Oracle's first step towards a centralized cloud-based planning system. There are more planning features like constrained based plan, demand sensing and shaping, and sales and operations planning which are yet to be added, but the beginning looks promising and the future is full of opportunities. Oracle Planning Central Cloud is pre-configured and ready to use from the moment the account is provisioned by Oracle. Instead of spending time procuring hardware, integrating applications, and configuring the software, the system can be live in weeks. There is a lot of potential of Planning Central cloud which is definitely going to enhance user experience and improve supply planning in companies.

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