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

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June 19, 2009

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.

June 16, 2009

IT Outsourcing - Recession Survival Kit - Series I

Everybody is talking about it.. Decision makers are contemplating either to invest for growth now or to cut costs to maintain margins.. or do both. well.. am sure people know that these are easier said than done. there are too many theories, hypothesis, advices, opinions and the latest in the list.. 'management books'... trying to use all possible ways of the current situation to make themselves heard.. but what is heartening is that there is good amount of truth and reality in all of these.. as they are directly from their heart.. they have felt it, experienced it and living with it.

Just wanted to share my thoughts on the avenues that are available for executives to survive and sail through the current recession in the IT Outsourcing space... While there are many ways being pondered, let us look at few of the prominent ones in the market.. these are applicable for both type of organizations.. those who are either looking for ways to start outsourcing or those who are already matured in this but are looking for newer ways to cut costs..

Let us look at new Service Delivery Models, as the first among the 3 part series of this survival kit..

Innovative Service Delivery Models

Talking of delivering IT services, there has been significant amount of maturity among the companies that outsource IT services to SIs across the world.. Initially, that is around 1.5 to 2 decades ago, companies were more comfortable with 'touch & feel' kind of business. Wanting to know who are working for them, what is that they are working on and with a desire to have full control on the overall engagement. Slowly the situation improved, not bcos of diluted expectations but bcos of the maturity and the rampant acceptance of the IT outsourcing model.

Companies started to believing their IT service partners more and more leading to a more refined delivery model offering 'Managed Services' - Where the provider retains the execution control on the operational aspects of the engagement, having an equal participation on the tactical aspects too, while the customer retains the strategic control of the relationship. The providers became more accountable for the results, to deliver projects within schedule, under or same budget with acceptable quality of work. This model has had great success as it offers a win-win proposition for both customers and providers paving the way for more trust on the partnership.

IT Shared Services Delivery (or can we say 'IT Service delivery 2.0')

One of the most compelling value proposition to customers who are looking at options for supporting and maintaining their applications at low cost but still want to retain their SLAs and maintain high customer satisfaction, is to look at IT Shared Services Delivery model.

A simple definition would be that this model involves a single team, in other words one common pool of IT consultants, supporting multiple customers, round-the-clock, on multiple technologies.

You can look at this option if?
 - You are a mid-to-small sized company
 - Your application landscape is more stable and doesn't involve too many transactional interactions with end users
 - Your landscape includes a large Enterprise Package consisting of too many modules or there are too many small peripheral applications where you may want to have individual module specialists as the ticket volumes are not substantial
 - You are looking at extended support coverage beyond the normal business hours but could not afford the extra costs associated with it
 - You are looking for 'need-based' support - instead of locking in FTEs you want people only when there is work
 - You want to meet unforeseen demands - ability to address any unprecendented spurt in demand with minimal increase in costs
 - You have a highly labor intensive environment where the processes have high repetition rates
 - You are interested to bundle all applicationand infra related support and maintenance into one package and want the best deal possible
 - and more...

This is one model that can give almost all that you need.. the flexibility in services, dynamic pricing, predictability in costs, scalability of operations - all with same service levels and maintaining the customer satisfaction. Try it out..

June 15, 2009

Business Intelligence Serving Manufacturing Industry

In the current recession hit market, Manufacturing is one of the industries that is facing global competition that it has never experienced. Reductions in profit margins, Increase in raw material cost along with government regulations demand more innovative ways to look on to Optimize resources, gain productivity, minimize investment.

To overcome this we need to maintain optimum level of inventory so as to avoid overstock / short-supply and bring innovative and profitable schemes at marketing level. Business Intelligence is the right tool that will help us in achieving this.

BI helps in keeping managers updated / equipped with state-of-the art and exact information that helps in taking critical business decisions rather than going on assumptions.

Manufacturers use Business Intelligence software to improve visibility and communication across their increasingly complex supply chains, while satisfying customer demands for new products and product enhancements.  Following business area are prime areas of concern:

  • Having a bird’s eye-view of customer information which helps sales team to coordinate and collaborate customer interactions.
  • Trace the metrics and indicators that improve customer satisfaction.
  • Lead time to fulfill customer orders across sales and distribution channels.
  • Improve “order promising” (i.e., when a customer is promised delivery or issue resolution) through analysis of historical statistics, expected lead time, and inventory levels
  • Analysis of current usage of products to go for new range of products.
  • Tracking service, to better predict and prepare inventory and production levels.
  • Benchmark distributors, regions, and individual locations against each other in an attempt to foster increased attention to goals and metrics, as well as reward high performers and aid underachievers.

Some of the areas where BI Solutions can be applied in Manufacturing are:

Supply Chain and Order Management:  Oracle Supply Chain and Order Management Analytics delivers deep customer insight into order and inventory data so you can make better decisions in each stage of the order lifecycle. Oracle Supply Chain and Order Management Analytics enables you to assess inventory levels, determine likely product fulfillment needs before the order has been booked, quickly identify potential order backlog issues, and stay on top of critical accounts receivable (A/R) and daily sales outstanding (DSO) issues. By leveraging actionable and fact-based insights, one can transform your current Supply Chain and Order Management processes to improve financial performance and customer satisfaction.

Financial Management: Oracle Financial Analytics helps front-line managers improve financial performance with complete, up-to-the-minute information on their department's expenses and revenue contributions. KPI’s and reports enable financial managers to improve cash flow, lower costs, and increase profitability while maintaining more accurate, timely, and transparent financial reporting that helps ensure Sarbanes-Oxley compliance.

Procurement and Spend: Oracle Procurement & Spend Analytics,  enables us to optimize supply side performance by integrating data from across the enterprise value chain—enabling executives, managers, and frontline employees to make more informed decisions. It increases visibility into the complete procure-to-pay process, including comprehensive spend and procurement analysis, supplier performance analysis, supplier payables analysis, and employee expense analysis. Through complete end-to-end insight into the factors that impact company performance, you can significantly reduce costs, enhance profitability, increase customer satisfaction, and gain competitive advantage

Using above one can assess cash-management and monitor operational effectiveness of the payables department to ensure lowest transaction costs. Identify most profitable customers, products, and channels, and understand profitability drivers across regions, divisions, and profit centers. Improve inventory management for those products that consistently fall into backlog due to a lack of appropriate stock levels. Gain visibility into inventory activities to minimize unnecessary expenditures and optimize inventory to conserve working capital. Gain detailed visibility into direct and indirect spending, and identify opportunities for consolidation and reduction of costs. Monitor price, delivery, and product quality to determine best - and worst - performing suppliers.

Business Intelligence tools mainly are being accessed by top Management who need to obtain strategic information that can help them decide the future course of action, help in taking strategic decisions. Business Intelligence is still being more equipped for decision making, predicting trends, analysis, delivering information.

Being part of Manufacturing Industry we need to look out for a solution that can help us in lowering lead time, can help in reducing production costs, improve product quality, better tracking and improve customer satisfaction. Manufacturing Industry need to respond quickly to changing market environments. In the current environment delivering the key information to the key people has gained extra importance that can help plan for production, reduce hidden costs, keep optimum level of inventory, and maximize profits.

Changing Customer and Distributor requirements, Internal Operations demand an optimal way of decision making by the manufacturer. Each manufacturer has his own processes, own tacking system, order processing and its own challenges. All this add up to the need of having effective BI system in place and providing results out of it. Again there has been long debate on the quality of data that is available with manufacturing industry as for most of them they have to depend on external parties like retailers, distributors, contractors, suppliers , its own customers, others. If a proper feed is given to Supply Chain and Order management that will definitely ensure deep customer insight and inventory data for better and effective decision making.

One of the challenges that manufacturing industry face is due to changes in demand. If we have a proper understanding of costs and demand, managers can make better decisions. Some of the manufacturer’s also have a customer specific costing, delivery Bi will be helpful in finding the most appropriate way.

Improved Visibility in Procure to Pay is helpful to optimize the supply side performance.

Manufacturing Companies product portfolios are larger to manage, large number of supplier’s to negotiate on cost and quality, maintain huge inventories which need to be tracked and moved to meet customer demands. Along with this there is always a need to analyze/identify customer need, maintain and improve customer delight, add customers so as to remain in business and profitable. BI will definitely be of help in making right decisions to overcome these pressures and will help to manage and sustain in business in this complex environments.

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