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Extreme Supply Chain MakeoverOracle’s Value Chain Transformation ContinuesMichael Jester

Copyright © 2014 Oracle and/or its affiliates. All rights reserved. Oracle Confidential – Internal/Restricted/Highly Restricted 2

Oracle Hardware Transformation Begins !

Copyright © 2014 Oracle and/or its affiliates. All rights reserved.

Approach

– Business: One owner. SVP of World-wide OPS. Reporting to the President. Accountable for the development and integration of business process as well as the business implementation of our systems.

– IT: One owner. SVP of Oracle application Lab (reporting to EVP of Product Development) Accountable for the R12 IT Implementation. Helping the teams understand how the software is designed to work.

Timeline - Big bang implementation; 12 months to go live.

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Implementation Approach / Process


• Inventory reduction/EOL

• Modernize technology

• Continuously improve

Goals Elements of Transformation

• High quality products

• Competitive, predictable, fixed lead times

• Simplicity, efficiency & sustainability throughout

• Reduce excess & obsolete inventories, freight & warehousing costs

• Upgrade to latest versions of ERP & supply chain planning apps

Oracle Hardware - Managing Strategic Transition


• Set expectations for all teams

– “You’re not that special”

• Plan all the changes required to the end to end process

• Implement global process ownership model

• Establish core implementation team structure

• Define weekly meetings to make decisions

• Develop escalation process

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Define New End-to-End Business and Alignment ModelFrom New Product Design to Delivery


Ship to Fixed, Competitive Lead Times

Goal: 95% against initial shipping commitment

Product lead times: 5 days

After-market options: 5 days

Predictable and Fixed Lead Times

Deliver by Arrival Date

Standard or expedited

Predictable and Fixed Lead Times


Varied FLTs:

Custom Configurations

Many X-Options

95% to Initial Commit

Assemble & Pick

Some exceptions

FLT By Product

Assemble to Order

Fixed Transport LTs

2010 20152005

Variable 5 to 50 Days Fixed 8 to 12 Days Reduced FLT to 5 Days

Fixed Lead Time Evolution


From the source to the customerin the most efficient manner possible

4 PL Distribution Network

100% Direct Ship


From: To:

100% Configured Systems / Orders


Focus Supplier/Supply Chain Model – 2010

Distribution Center

SL8500 consolidation point

Internal Manufacturing (IM)

Sparc/Tape/High Storage

Tape/High Storage Supplier

X86/Low Storage

OEMs (x16 US, x11 EMEA)

Shipments from Three Distribution Centers

21 Major Final Assembly & Test Sites

100 Pick-up Locations Globally


Internal Manufacturing (IM)

Tape/High Storage

SPARC Chip

X86/Low Storage

OEMs

Focus Supplier/Supply Chain Model – 2015

Elimination of Distribution Centers

5 Major Final Assembly & Test Sites

25 Pick-up Locations Globally


•Daily pickups from supply points, globally•Direct shipment to end customers,

including international and domestic freight movement• In-transit freight visibility

From 4 Providers for: To 1 Global Provider for:

International airfreight movement

3 Distribution centers (US, NL, JP)

1 Consolidation center (US)

Domestic distribution centers

Global Logistics Capability


• Global Planning by Demand Class

‒ Demand aggregated and forecast generated globally

‒ Global forecast provided to the supplier, no regional level plans

‒ Spreadsheet Based

‒ Many Version Disparities

• Model Suppliers as Inventory Organizations

‒ Isolate Forecast, Supply and Demand by Supplier

‒ Prevent consumption of common material across Suppliers

‒ Single Planning System for All Oracle HW

All Suppliers Expected to Provide Commitsto Forecast on a Weekly Basis

Supply Plan Evolution


Robust & Flexible Value Chain

Supply Chain - It All Fits Together

StructureProduct

ForecastGlobal

Source/MFGFulfillment

TimesFixed Lead


Marginal Stable Advanced Best Practice

Fragmented

Silo-Based

Processes

Internal Process,

Data Integration

Some Point

Capabilities

Integrated/Aligned

Value Chain

1 2 3 4

Limited Collaboration

Selective Improvements

Standardization, Foundational

Multi-EnterpriseOrchestration

Pe

rfo

rma

nc

e

Fragmented, Infrastructure & Processes

Standardized on Oracle ERP

Advanced Capabilities – Logistics, PLM

Complete IntegratedDemand, Supply & Product Processes

Value Chain TransformationFrom a Fragmented to Integrated Value Chain in 12 Months


R O I 16.7% reduction in product lead time

9.8% reduction in headcount

63.2% reduction in excess, obsolete inventory

24% reduction in freight and warehousing

9.7% reduction in inventory

Competitive, 100% Configured systems, built to order

Focused supplier/supply chain model

100% Direct Ship to customer

Global logistics capabilities

Predictable, fixed lead times

Consistent supply chain, product Data

Improved Quality & higher Service Levels

Globalization & Standardization of processes

Greater Agility to respond to Change

Sun Transformation – Extreme Results in 12 Months ?????


Integration of people, process, and technology

• Supply chain processes are more tightly integrated than ever before

• Training people on process and policy, and having a good measurement system is an ongoing requirement

SC transformation achieved within 12 months

• Requires executive commitment to direction, timescales and to minimize customizations

• Needs focus and mobilization across the organization

• “Rolling Thunder” system implementation aids velocity

Lesson Learned

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SUN Microsystems

XSIGO

ACME/TEKELEC

2010

MICROS

PILLAR2012

2013/2014

2015

2011

Multiple Complex Hardware Product Integrations

Supply Chain Products ExpandMajor HW Acquisitions

Simplified , Standardized & Optimized


Current

Agile PLM | PIM Data Hub

Primavera

Projects

Customer Management

Oracle Siebel CRM | Oracle CRM On Demand | Customer Hub

Collaboration

Oracle Beehive

Order Mgmt / Quoting

Procurement Manufacturing

Finance & HR

Enterprise Resource Planning

Oracle E-Business Suite

Value Chain Planning Value Chain Execution

Demantra | Oracle VCP OTM/G-Log | Oracle EBS

Customer Service (My Oracle Support)

Oracle Siebel CRM | Oracle FMW

Governance, Risk & Compliance

Oracle GRC

Supply Chain Management

OBIEE | Hyperion

Business Intelligence /Enterprise Performance Mgmt

Product Lifecycle Mgmt

Project Portfolio Mgmt (PPM)

Partner Mgmt

Marketing

Sales

Master Data Mgmt

Email

Web Conferencing

Instant Messaging

Workspaces

Project Accounting

Financials

HR Payroll

Contracts

Service Request Lifecycle

Configuration Mgmt

Knowledge & Communities

Health Checks & Diagnostics

CTO / Configurator

Goods and Services

E-Commerce

Advanced Pricing

Indirect Discrete Manufacturing

Sales & Marketing

Finance

Service

Risk Evaluation & Remediation

Controls & Policy Compliance

Direct Quality

Product Collaboration

Product Costing

Product Master Data Mgmt.

CAD Integration

Demand Planning

Supply Planning

Service Part Planning

Logistics & WMS

Global Trade Mgmt.

Field Service Execution

Oracle Applications Footprint

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