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Kick Start Hybrid Cloud with Oracle EBS using Oracle Supply Chain Planning Cloud

Overview

As part of the cloud strategy, organizations are investing and advancing the use of cloud services across business functions. Organizations plan to build the cloud strategy which delivers quick results with agility, business value and low risk. In this blog, you will learn how to kick start the Oracle cloud journey with on-premise Oracle EBS and public cloud Oracle supply planning cloud. The quick win is assured due to the fact the integration is standard feature provided by Oracle across on-premise EBS and supply planning cloud but there are choices to make which 

Seeing is believing - Proof of concept

For the SMB segments, seeing is believing even more when their "Cradle to Grave" cycle lacks the traceability and involves manual offline processes. Most of the demand planning processes to derive customer forecast and measuring the accuracy based on the actual sales orders are not tied back and the loop is not closed. All the historical data and its analysis are done on data warehousing tools which are manual people based and lack industry benchmark standards

 A quick proof of concept to show and reflect the changes needed to move towards industry benchmark standards and system driven forecasting process with built in analytics both in demand and supply planning helps the organizations on embracing the Oracle cloud journey.

SCP eBS POC Image 1.jpg

The above process flow illustrates the how the various supply chain planning cloud services provide different business function capabilities. Below is the summary of steps to perform quick proof of concept and test the applicable planning capabilities after configuring the planning system for the organization.

1.       Prepare the data for the various planning entities based on the organization requirements to reflect the business data for consumption downstream

2.       Upload the files on to the UCM folder against planning cloud

3.       Load the planning data files in the Net change mode

4.       Review the collected data and use the additional planning attributes using simulation set

5.       Configure and run the demand plan, load the historical data when needed

6.       Configure and run the supply plan with simulation set

Review plan output and performance indicators - Proof of concept

1.       Prepare the test scenarios to be validated

2.       Review the pre-build demand plan views

3.       Review demand plan output and analyze against the exist ones when available

4.       Review supply plan output and analyze against the exist ones when available

5.       Create additional demand/supply plan views based on business need

6.       Enrich the table views with available analytics and SCP cloud capabilities


Problem Description

The key challenges in the supply chain planning is the orchestration of the changing demand and supply scenarios. As the business planning organization embraces the SCP cloud journey, those challenges and short comings in the existing system landscape needs to be identified and business process need to be developed as per the industry standards. In any planning organization, there are top 5 main challenges faced as noted below:

1.       How does the organization validate the sales/customer forecast for the future and subsequently adjust against the inflow of the customer orders?

2.       How to plan to avoid excess inventory across the supply chain and improve the inventory turns?

3.       How does the organization not only manage their backlog of orders but also reprioritize based on customer request?

4.       How do we automate the planning process and capture the notes during various approvals?

5.       How do we improve productivity using analytics for making business decisions?


Shifting to cloud - choices to make

Apart from the business decisions and workflow around planning attributes enrichment and master data maintenance, there are decisions on product and customer hierarchies which need to be finalized before the SCP modelling so that business objectives can be realized and met in the future. Few of the other important decision on choices are listed below which greatly influence the change management across the organization

SCP eBS Choices to make Image 2.jpg

Solution  Details ( Process flows, System architecture)

The below illustration reflects the solution point of view and understanding on how the demand in the form of customer/sales forecast and actual customer orders drive the consensus business plan based on the supply and constraints (material and resources).

SCP eBS System Landscape Image 3.jpg

Data Collection from EBS

Ø  Target Refresh - The extract data for Oracle supply chain planning cloud is scheduled to run every day once in the Target mode which refreshed the collected data in planning central using the batch jobs scheduled from OIC.

Ø  Net Change - The extract data for Oracle supply chain planning cloud is scheduled to run twice or once in 2 hours in the net change mode to collect the changed supply and demand to improve the GOP results

Ø  Custom Measures - The custom measures are refreshed daily based on the on-premise EBS data and loaded to supply chain planning cloud as business metric. Few of the custom measures are sales order by customer request date, customer schedule ship date and customer price list


Demand Planning Process

After the Sales/Market forecast is uploaded into demand plan, the same is compared with the statistical forecast generated by the forecasting algorithm and the custom exceptions are raised for the demand planner to review. The quarterly forecasting review process is iterative, consensus is captured in the system using notes which are finally made available for management review. Once the approval process is completed after review using aggregation and disaggregation based on the customer and product hierarchies, the final shipment forecast is updated and approved.

The approved quarterly forecast is further managed on weekly basis based on actual flow of customer orders and netted using custom formula to manage the supply planning


Simulation Sets

The planning attributes are enriched and used in supply planning as part of the business requirement. Few of the planning attributes are given below apart from the time fences, lead times, order modifiers and safety stock which drive supply planning along with decision rules

Ø  Component Substitution logic - Use primary before using substitute/Exhaust all existing supplier using primary supplies first/ Exhaust all existing supplier using substitute supplies first

Ø  Enforce Purchasing Lead Time - Yes/No

Ø  Use common supplies - Yes/No

Ø  Hard pegging level - None/Project/Project and Task/Project Group


Supply Planning Process

The approved final shipment forecast is one of the demand streams apart from the actual customer sales orders which drive the demand after the consumption process during supply planning. Below are the few highlights of supply plan.

Constraint Plan

Constrained planning respects the material lead time as a constraint and overloads the resource. Such overloads are available as exception which are managed by the production planners. Demand prioritization rule for customer orders and customer/sales forecast

ü  Customer Orders by SSD

ü  Customer Orders by CRD

ü  Customer Orders by Order Value

ü  Customer/sales forecast by Forecast date

ü  Customer/sales forecast by Order Value

Decision Rules - Optimize business goals

SCP Decision Rules Image 4.jpg

Build Plan - Comprehensive view for analysis

Build plan is one of the standard view available as offering with supply plan whose layout can be configured and the filterable criteria applied for better analysis and decision making.

SCP Build Plan Image 5.jpg

Sales and Operation Planning Process

The approved quarterly forecast from demand plan is published to Sales and Operation plan where the analytical views are built on aggregation and disaggregation based on the customer and product hierarchies for the business users to create scenario simulation and what if analysis. The approved consensus forecast is validated for capacity planning based on supplier and resource modelling.

Further changes are made to the consensus forecast based on supplier capacity shared by supplier using supplier collaboration and rough-cut capacity shared by the production planners in the organization using BOR - bill of resources

The S&OP process has the various approval available in the SCP cloud for future reference and finally made available for executive review. The iterative S&OP process leads to the business plan which is tracked against actual for any course correction.


Benefits and takeaways

To stay relevant, organizations must develop cloud strategy which delivers quick results with agility, business value and low risk so they can transform processes to become resilient and adapt smartly to future requirements. Few of the SCP cloud driven solution/use cases and business benefits are listed below  

SCP Results Image 6.jpg

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