Guest post by
Neha Barnawal, Senior Associate Consultant - Manufacturing vertical, Consulting & Systems Integration unit, Infosys
All the cases mentioned above have one thing in common - application of Machine-to-Machine technology. As most of us are aware of M2M; its usage can be traced back to World War II where navigation sensors were used to establish communication between satellites and rocket engines to be fired and guided.
Rajeev Ranjan, Associate Vice President & Head - Oracle Practice, Manufacturing vertical, Infosys speaks about Infosys Integrated Customer Experience (CX) solution for manufacturing industry. We at Infosys see that a solution platform, with end-to-end processes, leveraging strengths from various CX products and possible extensions of existing enterprise applications will help customers to adapt to the solutions quickly and effectively.
Guest Post by
Rajeev Ranjan, Global Practice Head, Oracle Practice in Manufacturing Vertical, Infosys Limited
Infosys, a named Diamond sponsor, will have a major presence and will premiere its Oracle specific service and technology offerings. One of these capabilities is termed Demand to Deliver (D2D) which has been initially tailored to address supply chain business process and information technology challenges within the high tech and consumer electronics industry. I recently had the opportunity to be interviewed specifically regarding packaged D2D capabilities by Bob Ferrari, the executive editor of Supply Chain Matters blog.
Guest post by
Shantanu Bedekar, Senior Consultant, Infosys
Anyone who has visited a manufacturing plant or a warehouse knows that there is always a time-lag between physical movement of material and recording the same in the system. The unavoidable reason of this is: material is stored in racks, bins, containers spread across the warehouse or shop-floor but computer terminals on which Oracle forms are opened to enter data are far and few.
Recently I was speaking to a group of users about Standard Oracle Functionality on Order Promising. The audience were listening with varied degree of interests and expressions, some constantly scratching their heads, some with furrowed brows and some occasionally scrolling through their BBs, to the concepts and benefits of available to promise, capable to promise and capable to deliver. Then a lady with thick glasses and greying hair (sign of wisdom!) quipped - 'how do you make sure with all these Business makes money?'
Guest post by
Vijay Sarda, Lead Consultant, Infosys
In today's global scenario, companies face an increasingly challenging marketplace with a growing field of competitors, higher customer expectations, and complex overall supply chains. Increased competition means that companies face the dual challenge of cutting costs while being more responsive to the market. The need to cut cost is forcing companies to minimize inefficiencies throughout the supply chain.
The challenge of Supply Chain Management is to identify and implement strategies that minimize costs while maximizing flexibility. The impact of an organization plan on the whole supply chain is unpredictable before its execution. Simulation helps in evaluating the operating performance prior to the execution of the plan. Simulating different supply/ demand scenarios and other aspect of Supply Chain helps companies to diagnose problems at an early stage and evaluate possible solutions, optimize operations and minimize risks.
Sometime back while waiting for next DLR train at the Canary Wharf station, my collogue Badri, who is part of our sales team, noticed me downloading a new app on my smartphone. He asked, "Why are we focusing so much on developing mobility solutions for our clients? Isn't mobility more for consumer apps like games or social networking?" I tried answering by a counter question, "Badri, when did you check your phone first time today and what did you do?" Pat came the reply "As soon as I got up. You know, I check my mails, new opportunities and schedule for the day very first thing in the morning". He smiled, conveying that he had got the answer. He knows how convenient and productive it is to work on a smartphone these days instead of a laptop. Yes, mobility has become part and parcel of our daily lives, so much so that an average person glances at his or her phone a whopping 150 times a day. Today, we have more phones than toothbrushes in the world, over three quarters of the 7+ Billion world population. No wonder, Badri checks his phone before brushing his teeth... even I do the same as most of the enterprise users do, and that is precisely why today we also focus so much on developing more mobility solutions for enterprises.
Mobility opens up a whole new world for an organization. But, the extent to which it benefits from mobility depends entirely on its adoption strategy. Mobility Strategy or App Store - It's sometime a tricky question for enterprises that are just embarking on their mobility journey. However, it is not as difficult as a 'chicken-or-egg' situation.
R12 was a major release for OPM in the sense it merges process inventory with discrete inventory which resulted into streamlining of inventory operations & better integration with Order Management, Purchasing etc. Another change was the introduction of SLA for OPM, which finally hit the nail in coffin for much criticized MAC module. Afterwards, there are lots of enhancements like Multi-batch operations, Make-to-Order Functionality, Landed cost management etc. We now even have validated integration between 3rd party Regulatory document generation partners and OPM Regulatory Management. But, something was still missing. Something that process manufacturer is demanding from Oracle from long time??
Guest post by
Kamaljeet Singh Bhatia, Lead Consultant, Infosys
The last few decades has witnessed numerous examples of significant competitive advantages through supply chain integration. Information sharing through superior technology is making enterprises capable to innovate and integrate in the complex networked environment. However information integration in supply chains is limited to large enterprises and small to medium scale enterprises (SME's) significantly lag to leverage technology for supply chain integration.
Guest post by
Nipun Lakhotia, Consultant, Infosys
Automobile sector is currently experiencing a turbulent transition. Apart from product innovation, manufacturers need to align their supply chain processes to meet rapidly changing customer expectations.
Logistics plays a crucial role in automotive industry, representing about 40% of the retail price of a passenger car. Historically the automotive industry has always been focused on just-in-time manufacturing (JIT) which demands for sequenced deliveries. Inbound operational planning is expected to support advanced features like milk runs, direct delivery and cross-dock optimization with drop-trailer capabilities.
There are certain attributes of a supply chain based on which the supply chain practices can be designated as Green Supply Chain. This blog is a result of the analysis of green supply chain initiatives of various companies. The blog describes the various innovative steps and business processes which are helping companies to have more aware and environmental friendly operations amd processes, making it more sustainable. These practices and steps indicates the traits of a supply chain being green and environmental friendly.
With the business expanding across globes and with manufacturing organizations resorting to sub-contracting, there is a need for organizations to look at procurement beyond their current markets. This introduces the need for a centralized procurement function for better purchasing efficiency, better control over organization spend, and central and simpler management of contracts with suppliers. Oracle Fusion Procurement introduces new and better features that aid organizations to better manage their procurement functions. The following are the advantages of a centralized procurement function:
Look at the mirror directly or through spectacles, you are most probably seeing through it or seeing just the glass. Look deep into it - In all chance it contains sand from Australia, soda ash from China, both processed in Taiwan, manufactured in India using Italian machinery and recipe combination verified in American Laboratories. Each of these processes adds cost towards freight, storage, taxes and duty. Some part of the money you paid was actually for these. As a user you need not know the profitability and margins. But for the manufacturer this is of utmost importance. Normally the landed cost charges are applied to different items based on weight, volume and quantity.
Continuing on the ETO Series, I will discuss about the concept of Seiban, How it works and the key business requirements in Build To Order (BTO) Industry that can be handled in Oracle EBS Seiban solution. Another prominent ERP product that addresses Seiban requirements in the Industry is Glovia from Fujitsu.
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:
There was a time, not so long ago, when various business functions within the enterprises used to function in silos and that was still ok. Simply because that was the norm of the day. Not any more though. In today's competitive environment, managers are continuously looking for avenues to cut costs without compromising service.
Unless the functions in the enterprise collaborate, those objectives are highly likely to fall flat on their face. It is like building a tunnel. If two teams start digging from either side of the mountain without working with each other, the probability of them finding each other half way down is pretty low. What the enterprises need in such situations are systems and processes which work across the functions to recommend what's in the best interests of the enterprise. Availability of better systems is a big enabler in this aspect.
There is an 'inconvenient truth' about the way mass producers run their businesses, they over produce with their oversize production facilities that guzzle energy and resources and their inability to respond to changes quickly, wrecks havoc in the entire supply chain, in the economy, and in the environment. To wit, imagine a shipload of products suddenly stops selling as an unexpected collapse of a financial behemoth makes consumers nervous, train load of products that consumers do not want - the scourge of excess and wastes is not limited to the balance sheets alone- it impacts us all, our surroundings, our planet - when there isn't enough energy till we find an alternate source, when CO2 levels are at a point where we don't know what will happen. When sources of greenhouse gases were analyzed, it was found that developed countries were the most polluters and manufacturing industries accounted for an estimated 40 percent of total CO2 emissions. Until now no price tag has been attached for emitting green house gasses (GHG).Time has come that manufacturers need to pay for 'Environmental and social' cost of their actions, besides their internal cost of production such as cost of fuel, labor, material etc
Engineer To Order (ETO) Manufacturers typically make complex products with longer lead time whose customer specifications require unique engineering design, significant customization or new purchased materials. Each customer order may result in a unique set of part numbers, bills of material & routings and each order needs to be tracked as a project throughout the Sales, Engineering, Manufacturing, Shipping, Installation and Service life cycle. This industry typically comprises of customers in Aerospace, Defense, Construction, Tool and Industrial equipment manufacturers etc.
Guest post by
Nipun Lakhotia, Consultant, Oracle Practice, Enterprise Solutions, Infosys Technologies Ltd.
Supply chains are generally designed to optimize resources and provide better customer service. But in India, supply chain design decisions are mostly driven by financial considerations - especially tax implications. Let me explain this in detail.
In India, interstate sale of goods attracts central sale tax (CST), in addition to local sales tax (VAT). Due to this dual taxation, manufacturers tend to open several small warehouses in each state and perform simple stock transfer between their manufacturing plant & these warehouses. In this process, they save on CST and only pay local tax while making sale to the end customer. Hence tax implications over shadows classic principles of warehouse design like location, capacity, storage, transportation cost etc.
APCC is an executive decision making tool for Planning and recently introduced in market by Oracle. APCC stands for Advance Planning Command Center. APCC is business intelligence-analytical tool and product is based on Oracle Business Intelligence - Enterprise Edition (OBIEE). It provides unified user interface for user analysis in form of Graph and Reports.
Many analysis has been done and many artifacts written about the success of the ERP projects but the question which primarily remains unanswered and less explored is who holds the key to success of the program.
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.
This is not so much about the decline of mass production, as about the paradigm shift taking place in manufacturing around the world. Old system of manufacturing seems misfit to the current economic, political and environmental conditions. No new idea springs from void. Changes and even sea changes happen gradually. Craft Production System of late 1800 gave way to mass production when Henry Ford introduced Model T in early '90s. What Ford could achieve was not only the continuous flow of production, but also the standardization and interchangeability of the parts. What mass production system lacks, however, is a necessary responsiveness to ever changing consumer demands. Thanks to Oil shocks of 70s, Sep'11, Financial Meltdowns, demand volatility casts a shadow of mass destruction in profitability --- enterprises of all sizes across the industry vertical are struggling to remain competitive in the choppy market place.
What is MES ?
ERP (Enterprise Resource Planning) acts as central repository for all the data transacted, but there is no way of controlling the operations or passing the information between plant control system & ERP in integrated manner.
MES (Manufacturing execution systems) help in detailing the process and also controlling the operations through the systems. MES uses the data and provide results on the plant activities in minimal time. MES Collects the data from plant system, store them, and the output are used to control the functions in enhancing productivity and process on the whole.
MES for Oracle Process Manufacturing (OPM):
MES for Process Manufacturing adds new batch execution functionality and increases usability for manufacturing operators.
Consignment operations at a typical HTDM organization form an integral part of the sales process. It is a strategic operation both from volume and revenue standpoint.
Responsive supply chains are no more just a jargon. More and more organizations are adopting this route in order to stay competitive in this era of globalization. Last few years have seen economic downturn and thereby a trend of consolidations. There have been many a mergers and acquisitions.
Traditionally the manufacturing industry is always focused on improving the forward logistics- the focus is to cut cycle time for product innovation, time to market, order to fulfill. This led to optimization techniques of forward logistics through usage of technology. Forward supply chain visibility is a key parameter which the customer evaluates before choosing a supplier in manufacturing.
But the paradigm is shifting gradually. Today's best of class manufacturing organizations have created their own service organizations and are realizing the importance of managing the return and repairs efficiently. There is a considerable monetary value attached to this cycle- and more important it is the loss of loyalty due to an unsatisfied customer because of delay in the replacement/repair of faulty product. This loss can be easily associated with loss of revenue, market share and other financial numbers. As a result leading manufacturing companies are leveraging technology and collaborating with partners to optimize their return, repair, replacement, recycle and remarketing processes.
In order to understand the role of reverse logistics, let us look at the key functions in the value chain which impacts the overall cycle time for execution.
We need to now carefully examine the factors that impact these functions. Once we understand those we can understand the role of efficient reverse logistics in enhancing customer satisfaction. We will discuss those in my next blog- in the meantime let me know your views and thoughts.
There are many ways to achieve Leaner ERP implementation, and I have discussed some of the strategic levers for it in my previous blogs Go Lean (Part 2) and Go Lean (Part 1) like senior management and executive sponsorship, robust decision making framework, effective change management approach, upfront planning for middleware and reporting platforms, solution design workshops, selection of appropriate edge products and leveraging localizations. However, there are many tactical and operational levers also available for enterprises to adopt, which are primarily part of implementation execution cycle. I am discussing here some of these levers and best practices to minimize customizations:
In this information age, with increasing awareness, consumers are becoming health conscious & want surety that the food product they consume is Safe. They are not happy with just to know the location of manufacturing plant, but are interested to know from where the raw material is originally sourced. Dairy industry, which typically produces a range of products for a variety of markets, faces even greater challenge in tracing individual product. This calls for tighter Integration between all the channel partners across the supply chain.
The dairy industry is a vertically integrated industry with both upstream and downstream trade partners of the supply chain dependent on each other to ensure quality food. I will discuss some of the challenges dairy industry is facing and Oracle's Solution for the same.
"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:
While this provides a 20,000 feet view of the benefits, watch this space for more ground level details on the solution……
In maintenance world when we talk of "Zero Break down" most of the time maintenance crew says that it is not possible to achieve zero break down. So is it really possible to achieve "Zero Break down" for a Machine /Equipment? The answer is "Yes".
What is breakdown? :- When a Machine (M/c)is working and suddenly something fails for e.g. in case of CNC M/c hydraulic hose pipe rupture and it leads to heavy oil leakage, thus Beak down due to hydraulic leakage occurs on the M/C.
Does your manufacturing intelligence system support proactive monitoring for quick decision support? Lots of data gets collected on your shop-floor – but how should it be organized to assess the performance of a machine, a line, a plant, or a fleet of plants? What will it take you to make the process more a science than an art? Oracle has launched a new product - Manufacturing Operations Center - to answer some of these questions.
In one of my earlier blogs , I had introduced Oracle Strategic Network Optimization as a tool to optimize your supply chain. Well, the primary objective is to deliver a consistent, flexible, efficient, sustainable, Supply Chain which results in an optimized output that considers all trade-offs such as customer delivery, cost, risk, lead time, tax, carbon footprint, etc. Please refer to the link below:(http://www.infosysblogs.com/oracle/2009/05/linear_programming_models_orac.html#more)
Last week when I was talking to some people, there was a major hue and cry about the need for changing the costing method. They went to the extent of trying to compare Periodic Average Costing and Average Costing. But what they failed to realize was that they were comparing apples with oranges.
Procure to Pay is a standard business flow in any Organization. In Manufacturing Sector, It is a typical business requirement to pay supplier based on goods finally delivered after inspection. All ERP Systems handles this requirement. This serves Discrete Manufacturer pretty well. But, what about the Process Manufacturer, does it serve well for them too? Let’s see.
Whenever we talk about process manufacturing, it is assumed similar to Discrete Manufacturing. It also has operations, activities, work orders etc. right? Agree, but it has much more then that. Just an example, how do you measure a computer or Car? By numbers.. 2 computers or 3 Cars.. What about a cup of coffee?? 1 Cup, 200 ml, 190 mg, % Coffee.. In Discrete Manufacturing, 1 plus 1 makes 2, while in Process Manufacturing, It usually less then 2. Complexity of process manufacturing has just started!!!
The traditional thinking is that Lean and ERP are contrary to one another. Lean signifies a pull system and simplicity whereas ERP signifies a push-based complex environment that relies on innumerable transactions at every step to run smoothly. Lean is reality-oriented while ERP is data-in-the-system-oriented. One can argue forever on these lines…
If one scratches the surface, however, it does not seem so contrarian after all.
Consider some real-life examples below from my consulting experience where an ERP system assisted the lean philosophy of an enterprise.
Previous post - Is LEAN Manufacturing the answer to your operational woes?
A straight forward answer to whether 'Lean manufacturing is the answer to operational efficiency woes' is not feasible, but researchers have acknowledged that along with agility, leanness in operations and manufacturing is important. Most of the ERP and Supply Chain products provide ways and means to inculcate these processes into the e-business architecture.
Past couple of decades manufacturing organizations have focused on improving the quality of their business process to achieve operational excellence. ERP implementation is seen as an opportunity to re-engineer the existing business process, define / review Operational Excellence Metrics and ways to measure these metrics.
Today’s global environment has placed increased pressure on Hi-Tech manufacturers to become more competitive and profitable. Global outsourcing activities have increased in importance and have increasingly emerged as a key strategic tool in achieving cost reduction, quality and delivery improvement, cycle time reduction, and improved responsiveness to customer, competitive, and financial market demands. It is estimated that a well planned and executed global outsourcing strategy can result in a cost savings differential of 15 to 25 percent when compared to manufacturing inhouse.
Using external suppliers to design, manufacture, ship and service products or components - has been a growing trend in recent years as Hi-Tech manufacturers have sought, among other things, to divest themselves of production capacity (and the inherent risks associated with owning capital equipment), lower their labor costs and maintain greater flexibility in the face of ever-shrinking product lifecycles.
A tough business climate as today's challenges corporations to introspect and reinvent themselves. This also provides businesses with an opportunity to improve their odds of success during a recession by striving to achieve operational excellence in all functional processes including manufacturing. One of the keys to improving operational effeciency in the shop floor is to identify and reduce non- value adding activities and waste as much as possible. Managing rework and scrap is one such area to focus on. Rework and scrap often constitute a significant proportion of work content and material handling in the shop floor, yet organizations rarely expend the necessary effort to systematically reduce scrap and rework in the plant and floor areas.
Are you having to deal with low percentage of on-time completions, high throughput times, frequent line down situations or high WIP? Obviously something is very wrong, particularly if you said "Yes" to more than one of the above. Having consulted for several discrete manufacturing clients has made one thing very apparent to me - a lean and agile manufacturing environment is not an option but an imperative for manufacturing industries to achieve operational excellence. All of the above were contra-indicators of operational excellence. A manufacturing execution system (MES) can support a manufacturing firm in achieving this very objective. An MES system works in tandem with a mainstream ERP system to execute, monitor and manage the production processes on a shop floor. Together with an ERP system, an MES system can nudge (or push, if required!) an enterprise into adopting standardized processes and at the same time creating key data elements for performance measurements.
Consider the ways in which an MES system can assist you:
In the first part of the blog, we looked at 7 key factors that an implementing organization should consider before deciding to go ahead with its ERP implementation project.
In this blog, we will analyze 3 additional factors that are also vital for success.
ERP Implementations are generally time consuming and expensive - more so if the implementation involves multiple geographies with different languages, different business processes, legal requirements and accounting norms. Companies typically go for ERP implementations with the aim of integrating disparate systems spread across different business functions so that the top management can get an integrated view of the operations of the organization. Optimal usage of an ERP system also leads to reduction in operational costs and supports strategic planning.
With the current slowdown being accelerated by the financial turmoil, companies are increasingly looking at avenues to cut costs yet maintain profitability against all odds. This is a tricky situation given the fact that any decision leads to a bullwhip effect owing to the integrated nature of today’s supply chain. One of the time tested techniques to achieve this is through Reverse Auctions which is quite prevalent in the High Tech industry.
Scientific American featured a thought provoking article in November 2007 titled--Trashed Tech: Where Do Old Cell Phones, TVs and PCs Go to Die? The enormity of the problem of electronic waste and the urgent need for producing toxin free electronic components could not have been discussed better. I had a serious conscience attack about replacing my old cell phone after reading the article!!
If there is one thing which we can call as the livewire of the High Tech Sector is Labels. The entire high tech industry moves on labels. In Standard ERP Packages there are certain limitations in terms of volume of labels, performance and quality of bar code labels. As a result, typically companies have looked at other middleware options as a plug and play with the ERP Packages. Latest offerings from the ERP vendors seem to address this problem removing the need for middleware.