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Global Business Enablers in R12+Increase Competitiveness Through Streamlined Global Operations

Sid Perera

Principal Consultant

Oracle Corporation

The following is intended to outline our general

product direction. It is intended for information

purposes only, and may not be incorporated into

any contract. It is not a commitment to deliver any

material, code, or functionality, and should not be

Safe Harbor Statement

CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract

material, code, or functionality, and should not be

relied upon in making purchasing decision. The

development, release, and timing of any features

or functionality described for Oracle’s products

remains at the sole discretion of Oracle.

Globalization

• Manufacturing: Sony, Dell, and Apple use China’sQuanta Computer for laptop manufacturing

• R&D: Procter & Gamble to source 50% of newproduct ideas from global partners by 2012

• Design: Boeing designs navigation and landinggear systems in India


“Our strategy is to work with global networks to leverage the best “Our strategy is to work with global networks to leverage the best

technologies on the planet.” technologies on the planet.”

---- HP SVP Dick ConradHP SVP Dick Conrad

• Procurement: Pella sells windows primarily in theUS, but sources many parts overseas

• Shared Services: Citigroup uses a single globalHR system to serve all divisions and geographies

This requires businesses to This requires businesses to ……

� Think Globally to make the right decisions


�Work Globally to be more productive

�Manage Globally to lower cost and increase performance

How


Delivers

Agenda

• Distributed Manufacturing

• Contract Manufacturing

• Buy / Sell Subcontracting

• Landed Cost Management


• Landed Cost Management

• Global Lot and Serialized Manufacturing

Distributed Manufacturing


Plant E & F

Plant D

Central ERP

Distributed ManufacturingToday's Environment


Plant APlant APlant B & C

Plant D

Support for Global Shared ServicesTo gain efficiencies some functions need to be consolidated and shared

SingleSingle

GlobalGlobal

DatabaseDatabase

SingleSingle

GlobalGlobal

DatabaseDatabase

Shared Shared

Service Service

CenterCenterDrive

Shared Services

with R12

Initiatives


Increase the efficiency of shared services and single database operations with

streamlined processing, reporting, and access across operating units

Org 3Org 3Org 2Org 2Org 1Org 1

Examples: Payables, Purchasing, Collections, HR

Initiatives

Holland

Legal Entity

Denmark

Legal Entity

Belgium

Legal Entity

Belgium

Operating Unit

Holland

Operating Unit

Denmark

Operating Unit

Perform multiple tasks

across operating units

(OUs) without changing

responsibilities

R12 Multi-Org AccessIncrease the efficiency of shared services and single database operations

with streamlined ACCESS, processing, and reporting across operating units


Single Responsibility

Operating Unit Operating Unit Operating Unit

• Define and manage OUs from a central location

• View and manage customers across OUs

• Enter and pay invoices across OUs

• Receive goods across any OU

• Negotiate with suppliers for your enterprise, not just your OU

For Example:For Example:

Plant E & FCentral ERP

Global Single Instance Vs Distributed ManufacturingToday's Environment

???


Plant APlant APlant B & C

Plant D

???

???

Case for “Distributed Manufacturing”Today's Challenges

• Need to support 24x7 operations in geographically diverse plant locations

• Plant MES affected by ERP downtimes

• New MES release features can be up taken only through ERP upgrade

• Managing several software vendor


• Managing several software vendor solutions

• Difficult to Integrate with ERP because of different Data Models

• Creating Distributed Application footprint requires additional effort

• Inability to model detailed routings for execution and milestone routing steps for planning or costing purposes

Distributed Discrete MES A deployment option to carry out manufacturing activities independent of central ERP

• Achieved by deploying Discrete MES in separate

standalone instances for different location or groups of

locations

• Manufacturing transactions are reported in the

Standalone instances


Standalone instances

• Transactions are synchronized with the ERP system to

facilitate global cost collection, accounting and to

provide global overview of manufacturing process.

Plant E & F

Plant D

Central ERP

Distributed Discrete MES

Standalone

Standalone


Plant APlant B & C

Plant D

Standalone

Central ERP

��

Resource Transactions

Complete Work Order

Operator Selects

Job in Dispatch

List

Perform Move

Transactions

Material IssueEnter Quality DataCreate Work

Order

Distributed MES Instanceauto

Distributed ManufacturingProcess Flow - Perform Transactions and Synchronize


Create Work Order

with Milestone

Routing Steps

��

Resource Transactions

Material Issue

Cost Transactions

Record Milestone

Move TransactionsRecordWork OrderCompletion

ERP Instance

Distributed Discrete MESProcess Flow - Perform Transactions and Synchronize

Oracle Data Data cleansing

Distributed MES Instances

Maintenance Quality MES Inventory Shipping HRReceiving

User, Item, BOM,

Routing, Inventory

setup, WIP setup

New Jobs, Move, Material &

Resource Txns, Job

Completion

Inbound Data Services Inbound Setup Services


Oracle Data

Integrator

ERP InstancePlanning Planning

Data cleansing

Routing mapping

Transaction Sequencing

User, Item, BOM,

Routing, Inventory

setup, WIP setup

New Jobs, Move, Material & New Jobs, Move, Material &

Resource Resource TxnsTxns, Job , Job

CompletionCompletion

Inbound Txn Services

jobs

Source Data stores

Target Data store

Distributed Discrete MES Oracle Provided Configurable ODI Maps

Source


Mappings

Install and Setup

Oracle Data

Integrator (ODI)

Distributed Discrete MES Distributed Detailed Routings (Optional)

Setup Master

Entities


Perform

Transactions &

Synchronize

Setup Detailed

Routing

Benefits of Distributed Discrete MES

Benefits

• Lightweight/Standalone Mfg functionality deployable at each plant

• Minimal setups to get plant up and running quickly

• Can be integrated with EBS 11i/12.1 (No ERP Upgrade!)

• Support for all standard mfg modes


• Support for all standard mfg modes

• Detail Routing in MES and Master routing in ERP

• Framework to create custom user interfaces with zero coding

• Integrate Shop floor devices

Contract Manufacturing


Support for Contract Manufacturing

Cust

Cust

OEM

OEM--US

US

SOSO

OEM

OEM--EE

OEM

OEM

DISTDIST

DESIGNDESIGN


OEM

OEM--AA

C MFG

C MFG

SUP

SUP

MAKE?MAKE?

MAKEMAKE SHIPSHIP

Support for Contract Manufacturing

Cust

Cust

OEM

OEM--US

US

SOSO

OEM

OEM--EE

OEM

OEM

DISTDIST

DESIGNDESIGN


OEM

OEM--AA

C MFG

C MFG

SUP

SUP

MAKE?MAKE?

MAKEMAKE

COMPCOMP

SHIPSHIP

Buy/Sell SubcontractingDescriptionOEMOEM MPMP

Sales Orders

for Components

Create

Purchase Orders for

Components

Order

Components

Create Work Order

for Assembly

Send

Subcontracting Order

Create

Subcontracting

Order for

Outsourced

Assembly

• OEM completely outsources

the manufacturing of an

assembly by buying the assembly from a Manufacturing

Partner (MP) and sells the components (used to build the

assembly) to the MP.


2323

Ship components against

Sales Orders

Manufacture

Assembly

Receive

Components

Ship Ship

AssemblyAssembly

Receive

Outsourced

Assembly against

Subcontracting

Order

Buy/Sell SubcontractingSolution OverviewOEM MP • Involves modeling of OEM and

MPs as inventory Orgs.

• Eliminates the need to manually ..

• Create Discrete Jobs, Component Purchase and Sales Orders

Create

Subcontracting

Order for

Outsourced

Assembly

Send

Subcontracting Order

Auto Create

Sales Orders

for Components

Auto Create

Purchase Orders for

Components

Auto Create Discrete Job

for Assembly

Order

Components


24

• Perform Component Receipts, Assembly Completions and inventory transactions are

performed in the MP Org

• Supports both Synchronized and Pre-Positioned Component supply modes.

Automated

Ship components against

Sales Orders

Auto Receive

Components

Manufacture

Assembly

Ship

Assembly

Receive

Outsourced

Assembly against

Subcontracting

Order

Auto Complete

Discrete Job

Buy/Sell SubcontractingSetup – MP Organizations

Select Check box for

Manufacturing Partner

Organization MP organization is a simulated

organization, Accounting transactions


25

organization, Accounting transactions

in this organization should not be

transferred to GL

Check this for outsourced

assembly,

Profile JMF:Enable

OEM Organization

Buy/Sell SubcontractingSetup – Outsourced Assemblies in OEM


26

Profile JMF:Enable

Subcontracting is Yes

Defined as either “Synchronized” or

“Pre-positioned”

OEM Organization

Buy/Sell SubcontractingSubcontracting Components in OEM


27

Buy/Sell SubcontractingSubcontracting Component Types

• Synchronized

Components are shipped to MP with reference to a

specific Subcontracting Order along with the order.

• Pre-positioned


28

• Pre-positioned

Components are shipped to MP without reference to

any Subcontracting Order ahead of assembly

requirements.

Buy/Sell SubcontractingSetup – Shipping Networks

Select “Buy/Sell” as the

Subcontracting Type to

define the Subcontracting

relationship between OEM

and MP


29

An OEM can either have a Buy/Sell or a Chargeable Subcontracting

relationship with a particular MP

Chargeable Vs Buy/Sell Subcontracting

• Chargeable

Component Sale is provisional and ownership lies

with the OEM

• Buy/Sell


30

• Buy/Sell

Ownership is transferred to the MP once the

components are shipped

On the Workbench users can search

subcontracting Orders and verify

the receipts

Subcontracting order headers of

Outsourced Assembly

Buy/Sell SubcontractingTracking Subcontracting Orders through Subcontracting Workbench


31

Outsourced Assembly

Subcontracting order line shipment

or releases

Details of the

Components to be

shipped to MP

Complete Accounting for Intercompany Transactions


ASCP Supports Global Planning

Cust

Cust

OEM

OEM--US

US

SOSO

OEM

OEM--EE

DISTDIST

DESIGNDESIGN


EEOEM

OEM--AA

C MFG

C MFG

SUP

SUP

MAKE?MAKE?

MAKEMAKE

COMPCOMP

SHIPSHIP

Landed Cost ManagementCosting Global Supply Chain Transactions


Costing Global Supply Chain Transactions

LCM Simple ExampleInbound Shipment

Minneapolis US PortVessel CarrierHK PortShipment to HK

Customer

Issue PO: 123


$100 $2 $3 $20 $3 $2 $140

China Manufacturing Buyer

An additional 40% is added on to the purchase price of the item

$5

Duties

$5

Broker Fees

PO: 123Item A Cost

Item ATotal Landed

Cost

35

Estimated Landed Cost

Landed CostUnit Cost


Charges

Oracle Landed Cost ManagementKey Features

• Prior to Receipt

• Simulated Landed Costs

• At Receipt

• Calculated / Estimated Landed Cost


• Calculated / Estimated Landed Cost

• At Invoice Processing

• Actual Landed Cost

LC Calculation at Receipt User Actions

Ship Goods

Supplier /

Carrier

Create PO

Buyer

Receive Goods in

receiving

Receiving Clerk


Automated Actions

Accrue Receipts

Update Item

Cost

Costing

Capture Estimated

Charges

Calculate Estimated

Landed Cost

LCM

Integrate with Costing

RCV

Integrated with

LCM

Actual Landed CostUser Actions

Supplier

Item

Invoice

Charge

Invoice

Review Actual

Calculation Process

LCM ClerkPayables Clerk

Enter Invoices


Automated Actions

Accrual Reversal /

Accounting

Validate Invoices

Payables LCM

Calculate Actual

Landed Cost

Update Actual

Cost (OH)

Costing

Invoice details

Compliance Clerk

Enter LCMShipments

Oracle Landed Cost ManagementPre-Receiving –Simulations (Optional)

User Actions

Payables Clerk

Enter Invoices Review ActualCalculation Process

LCM Clerk

Ship Goods

Supplier /Carrier

Create PO

Buyer Receiving Clerk

Receive Goods in Receiving


Capture Estimated Charges

Calculate Estimated Landed Cost

LCM

Actions

RCV

Manage Landed Cost from the PO

Actions -> Manage Landed Cost -> Go


Buyers/Brokers can estimate landed cost directly from the purchase order.

Receiving LCM Shipments

• Receive by LCM Shipments


Global Serialized ManufacturingKnow the Source and Placement of Every Part

Boards R’ Us

Denver, CO

IrelandManufacturingPartner

Composition

Composition

Where Used

Where Used

Suppliers

Server

(S.No. 512)

Storage

(S.No. 929)PCI Board

(S.No. 717)


Acme ChipFab 12

E. Storage

Austin, TX

SKD Co.

S. KoreaNippon Fab

Japan

Composition

Composition

Where Used

Where Used

Disk B

(S.No. 339)Disk A

(S.No. 676)

Disk Array

(S.No. 892)Memory

(Lot No. 115)CPU

(S.No. 232)

Track and Trace a Customer Shipment, Lot, or Individually-Serialized Product Back to the Original Source Across the Globe

Manufacturing Practices for Global OperationsSatisfy local requirements to compete in key outsourcing regions

Chargeable SubcontractingAutomatically create replenishment orders and

track component allocations & inventory for sub-

contracted manufacturing (e.g. Shikyu)

Golden Tax Support for ChinaProvide compliant VAT calculation, invoicing, and

tax reporting via China-certified “Golden Tax”

software


contracted manufacturing (e.g. Shikyu)

Customer Acceptance, Deferred Revenue and

COGSRecognize and account for COGS and revenues in the

same proportion, based on flexible contingencies &

within the same accounting period

Periodic Average CostingSupport accounting compliance requirements in

countries such as China/Taiwan

Summary

• Shared Services

• Distributed Manufacturing / MES

• Contract Manufacturing

• Buy/Sell Manufacturing

• Landed Cost management


• Landed Cost management

• Global Lot/Serial Tracking

• Golden Tax – China

• Periodic Average Costing – China, Taiwan, Etc.

• Customer Acceptance / Deferred Revenue - Japan

• Lot more!


Thank You!