<Insert Picture Here>

Oracle Fusion Middleware Best Practice Adoption

for Manufacturing
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
relied upon in making purchasing decisions.
The development, release, and timing of any
features or functionality described for Oracle’s
products remains at the sole discretion of Oracle.
 Agenda

• Industry Overview
• Key Priorities and best practices for Implementation
• Real Time Inventory Management
• Operational Efficiency
• Process Streamlining Using BPM-SOA
• Enabling Business Transformation
• Oracle’s Industry Leadership
• Why Oracle
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Agenda:
Industry Overview
Meeting Today’s Business Challenges
• Costs

• Pace of business

• Innovation

"In a time of accelerating turbulence, the valuation of a

company will be strongly affected by how it executes
change."
MRD Industry Business Challenges
COST CONTAINMENT
… Businesses are constantly looking
at how to reduce costs by removing
redundancies through consolidation
and business efficiency strategies
EFFICIENCY
Removing inefficient processes has
been a key driver for CIO’s since
2005. This theme will continue into
the future as margin becomes a key
measurable for business survival.
INNOVATION
Businesses are under pressure to
bring new products, services and
delivery methods to market to
maintain their premium business
and drive customer service
COMPLIANCE AND
SECURITY
…Compliance with new
regulations will become the
prerequisite of doing business.
Added to that, businesses are
being measured on the value and
authenticity of their intellectual
property
MRD Industry IT Challenges
DEPENDANCE ON LEGACY
SYSTEMS
… Critical business processes
(manufacturing, flight operations,
retail applications) depend on legacy
systems that are hard to modify,
costly to maintain, and run on aging
expensive hardware
AGING FRAGILE
INFRASTRUCTURE
…Strong focus on costs and low
investments have left businesses with
aging server, PC, and network
infrastructure making it difficult to
support 24*7 operations across
multiple continents
COMPLEX APPLICATIONS
ENVIRONMENTS
…Years of custom development
and decentralized solutions
development has led to complex
application environments with
multiple data sources, complex
point-point integrations, and
several point solutions with poor
documentation and support
SHRINKING IT BUDGETS
…Shrinking IT budgets leave little
room for new investments in
platforms although airlines need to
replace and improve their aging
applications and IT infrastructure
 Emerging Manufacturing 2.0 Characteristics

User-centric interfaces that not only streamline activities, but take
advantage of available shop-floor talent for deployment, reconfiguration,
and software maintenance.

Manufacturing architectures that capitalize on existing investments by
using manufacturing SOA instead of ripping and replacing them with
monolithic applications.

Incorporation of Web 2.0 and Enterprise 2.0 technologies and
constructs such as blogs, instant messaging, mashups, search, tagging,
wikis, and cool, always-connected mobile devices. This will engage
younger generations in manufacturing as well as enhance software
usability and collaboration.

Support for low-cost tags, intelligent sensors, pervasive networks, and
mobile workers.

Event-driven, supply network collaboration (intra- and inter-enterprise)
platforms.

Convergence of product data management and process development
models for rapid development of new products and manufacturing
processes to accelerate time to market.

© 2007 AMR Research, Inc. |

Demand Driven Manufacturing 2.0
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Agenda:
Key Priorities and best
practices for
Implementation
 Key Priorities for Manufacturing
 Controlling Inventory and Monitoring Real Time Status

 Measuring Operational Efficiency

 Lower IT Costs, Integrate Business processes and Drive

business innovation

 Enable business transformation

“Oracle Provides Solutions and Best Practices to meet the

above priorities for manufacturers”
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Best Practice Adoption For

Manufacturing – “Real Time
Inventory Visibility”
 Inventory management for Manufacturers is a
perennial challenge, compounded by demanding
customers, expanding product lines, & longer
supply chains

Inventory Reduction: $250B

400
Opportunity100%
Inventory Value (Billion $)

350
80%
300
250 60%

200
40%
150
100 20%

50
0%
- 2001 2002 2003 2004 2005
Raw Material Work-In-Process Postponement Distribution

Inventory Levels by type (US Manufacturing sector - 2005 Average Order Fill rates: Large US Manufacturers

Large US Manufacturers carry inventory worth of $830B, but unable to improve service levels beyond 80%
Sources: Annual State of Logistics Report, June 2005, Council of Supply Chain Management Professionals, US Dept. of Commerce, US Dept of Transportation.

13
 The typical manufacturer carries 20-25% more inventory in their
supply chain than necessary to satisfy demand effectively

The Issue is widespread:

– Affects over 65% of large manufacturers
– Inventory charges dominant cost structure
component
– Root Cause: Outdated systems and processes for
inventory visibility and supply chain control.

The Oracle Response:

– Focus on inventory, the most effective measure of Supply Chain performance
– Increase inventory planning accuracy & tighten inventory control
– Develop deep supply chain visibility that leverages views into partner planning
and execution, complex event correlation, and real time data access
* Source: AMR Research

14
 Inventory Visibility and Control is a comprehensive
solution
Technology and methodology for rapid development of deep supply chain visibility:
• Real time access capturing inventory data at a ‘microscopic’ level of detail
• Incorporates sensory network data including inputs generated by EDI / Bar Codes & other devices
• Views into partner planning and execution
• Complex event correlation transforms data into information

Reporting and decision support for root cause analysis, modeling, and simulation

Event Processing and BI platform for aggregating and analyzing supply chain data

Deep Visibility Optimized Results

BPEL Process manager
OEM Contract
MDM tool KPI Monitoring Manufacturer A

Contract
Sensors

3 P/L Manufacturer B
Analytics
Data Store BAM Contract
Component Manufacturer C
MFG Escalation
Distributor
CMs
Event Processing 3PL

ESB OBIEE

15
 Solution Landscape

Transportation Collaborative
B2B Infrastructure BPEL Management Planning
(TIBCO) Manager
AIA Infrastructure Oracle
Applications

Process Orchestration
Rosetta Net
Adapter

Message
Validation

Customers
Message ASCP / Demantra Order
Routing Management Inventory Visibility

AIA Infrastructure

Error
Management Oracle
Applications
Purchase Management Inventory Management

16
 Pratt & Whitney

Opportunities & Challenges

• Better manage inventory on engine repair and overhaul
• Automate tracking of engine maintenance milestones
• Bridge engineering, support, operations and finance to ensure better customer
support and satisfaction

Solution Powered by Oracle

• Oracle Solution manages engine maintenance process worldwide 24/7
• Allows for better preventative maintenance – avoiding higher-cost repairs
• Eliminates extensive paperwork, manual effort and tracking
• Allow for real-time updates and comprehensive fleet-wide status tracking

Results
• Better visibility into preventative repairs

• Reduced errors on tracking and manual input

• Cost avoidance savings – engine performance monitoring saves per event

• Allows for fleet-wide issue tracking – ID bad parts or processes holistically

 Inventory Visibility Solution

Enters Request
for Service Oracle BPM Tech
Customer Order Automatically runs reviews Job
Process Ticket

Customer
Delighted

Increased Cash Job completion

Flow Work is performed
notification sent

Invoice Process
begins
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Best Practice Adoption For

Manufacturing – “Operational
Efficiency”
What is Next-Generation Manufacturing
Operations Architecture?
Next-Generation Architecture
• Built on a common abstraction
layer
ERP
of production / equipment data
Abstraction
Mfg Operations Ctr • Leverage existing investments in
Layer
plant IT infrastructure – no rip &
Distributed Plant Systems replace
Automation & Control • Allows for gradual upgrade of plant
systems

“It is often more expedient to install an

abstraction layer built on a plant-level data
store than to reengineer the plethora of existing applications to achieve
normalization. We see this approach rapidly emerging as a best practice.”
-- Alison Smith,
February 2008

20
 Operational Challenges
Lack of Manufacturing Agility to Respond to Changing

Corporate
Relatively Stable Supply Chain Enterprise
Customer Business
Environment Management
Planning and Relationship Mgmt Resource Planning Intelligence
Schedule-Driven
Standard Systems

Point to Point connection

Real-Time, Exception
Prone Environment
Dominated by Older
Homegrown / Factory Quality Maintenance Legacy Systems
3rd Party MES Automation / SPC / Service

Multiple Plants w/ Different Systems Multiple Contract Mfgrs

Multiple sources of truth
Knowledge not shared across resources

Poor production performance visibility
Rigid, disconnected & disparate systems

21
Oracle Manufacturing Operations Center

Contextualize Plant Floor Data and

Synchronize with ERP

Provide Real-Time Intelligence for

Plant Operations

Leverage Next Generation Manufacturing

Operations Architecture
 Solution Architecture
Corporate BI
SAP ERP (PP/PM)

Production Production Role-Based Dashboards

Confirmation SAP Orders
Adaptor

MES
Business
Business Manufacturing
QMS Process Operations Activity
Management Data Model Monitoring
Logistics Contextualization
Engine
Manufacturing

Shop Floor Communication Drivers Operations

Center

Scope
Flat Products PLC CNC DCS SCADA Advanced Human
Systems
Tubes Division Machines Process Machine
Device-Generated
Data Control Interface

23
 <Insert Picture Here>

Best Practice Adoption For

Manufacturing – “Process
Streamlining Using BPM-SOA”
Standardized Business Processes a Top
Priority
“State of the CIO 2008” survey

32%
Of companies with revenues over $1billion say
“IT’s Top Technology
standardizing and consolidating their IT infrastructure is a
Priorities for 2008” top technology priority—more than any other.
What is the Problem?
Organizational Units
Customer Sales and Production Manufacturin Inventory & Finance & HR
Relationship Marketing Planning g Logistics
Management

Product Configuration
Processes

Order Management

Warranty & Returns Management

SFA Produc SCM product LMS Inv

CRM product DB ERP
t ERP MES MGMT
B2B

Enterprise Infrastructure Services

(Portal, SOA, IDRS, LDAP, EAI, E-mail, IT Operations)
Real-World Business Processes span
organizations, systems, and applications.
 BPM Solution – Across Apps,
Functions and People
Organizational Units Order Management Process
Customer Sales and Production Manufacturing Inventory & Finance & HR
Relationship Marketing Planning Logistics
Management

Product Configuration
Processes

Order Management

Warranty & Returns Management

Customer
Relationship Sales and Production Inventory &
Management Marketing Planning Manufacturing Logistics Finance & HR

Produc produc produc produc produc

CRM SFA SCM DB LMS B2B ERP CRM SFA Prodict SCM DB LMS B2B ERP
t t t t tinfo.
Inv Inv
ERP MES ERP. MES
MGMT MGMT

Enterprise Infrastructure Services Enterprise Infrastructure Services

(Portal, SOA, LDAP, EAI, E-mail, IT Operations) (Portal, SOA, LDAP, EAI, E-mail, IT Operations)

Real-World Business Processes span BPM models, simulates, executes, manages,

organizations, systems, and applications. monitors, & optimizes those Business
Processes.
Business Process Management (BPM)

BPM promotes operational excellence by bringing together

people, systems, information, and business policies

Strategy Goals Policies Compliance

Process

Systems People Information

28
 Process Life Cycle Management
Continuous Process Innovation

Business Process
Analyst
Developer

Process modeling, Business

simulation Process development
Model and systems integration
and documentation
Process
execution andOptimize Simulate
management BPM
Business Lifecycle
Owner Monitor Implement
Deploy
Execute
Business User Process
Interaction Participants
Enterprise
applications
Business dashboards and
historical & trend analysis tools And databases

29
 Process Centric Solutions

•DriveManufacturing
consistent customer interactions via
integrated service channels

Operational
Efficiencyl
Channel • Optimally schedule resources, manage spare

Cheannel
parts, and deploy field personnel to reduce overall
Operational service costs
Efficiencies • Uniform experience across channels by
delivering consistent quality & service for
improve efficiency
SOA enables a cost effective , flexible
and efficient IT foundation that
promotes faster development and lower Sy
maintenance costs through reusable
services

Optimization
Inventory • Improve demand mgmt with consensus-based

Inventory
Optimization forecasts
• Reduce cycle time / waste and optimize inventory
via single, holistic production plan

SOA enables organizations to

respond quickly to new customer • Streamline operations and outsource portions of the

Introduction
requirements, competition and company that are not a key capability.
changing market conditions by New Product
t New Product • Reduce time to market of new products &
services
responsive Business-IT alignment Introduction • Improve retention through analytics & align
products with customer needs
Centricity

• Personalization of products to fit their needs and

Customer

are expecting faster deliveries of these product.

• Make relationship profitability as primary
growth
Customer • Customers are finding more options for suppliers.
Centricity Decreasing prices are a result of this globalization
and increased competition.
 BP

Opportunities & Challenges

• Automate and process accounts payable for over 30,000 non-recurring transactions
• 2,500 AP approvers in numerous time zones provide user support and handle exceptions for
over 10,000 vendors
• Streamline the hodgepodge of invoicing systems and approval processes

Solution Powered by Oracle BPM Suite

• Oracle BPM Suite is used to streamline client accounts payable interaction and approval
process
• Automatically assigns invoice to appropriate approvers
• Enables approval notification e-mails to curb cost reductions
• Provides a self-service Web portal for 3,000 primary vendors

Results
• Increased turnaround, data accuracy and consistency, audit trails and quality assurance
• Cost per transaction reduced by 80%, realized ROI of 300% over two years
• Maximized cash flow and reduced personnel costs
 Accounts Payable Approval Process

• Modify Vendor Record

Paper Invoices are • Conduct Payment
routed for manual Inquiry
coding in FileNET • Submit Electronic
Invoice

FileNET Up to 3,000
Approved
vendors have self
service web portal invoices are
BPM polls Oracle DB posted to SAP
(FileNET representation) access
1,000 Invoices are for payment
for new invoices
mailed, faxed and
sent via EDI to the
Tulsa Processing
Center each day

Approver can email “1 click”

approvals or change account info, Exceptions are handled
forward, etc in the Work Portal by 30 “super users”

After performing validation and business Aging reports are

logic, BPM assigns invoice to one of over Approval notification emails are generated and accessible
2,500 approvers and where appropriate, sent to the approver for where on demand via the Work
sends email with a “1 click” approval button BPM approved the invoice Portal
without human intervention
 <Insert Picture Here>

Best Practice Adoption For

Manufacturing – “Enabling
Business Transformation”
 Enabling Business Transformation
Business Priority
Empower employees and
improve employee productivity
People
Enhance internal and external
collaboration
Increase predictability of
business results
Process
Enable integrated and
adaptable business processes
Harmonize data as a single
Data version of the truth
Business Imperative
Deploy role-based cockpits to give
employees all the information they need to
do their jobs, including KPIs, workflow-
based notifications and external news alerts
Leverage web 2.0 technologies to enable
employees to collaborate on-demand and
build social networks
Implement an insight-to-action closed loop
management framework that seamlessly
links real-time alerts to root causes,
predictive scenarios and corrective actions
Build integrated processes to unlock the
value of existing investments
Implement a data harmonization strategy
to ensure timeliness, completeness and
accuracy of enterprise data
 Enabling Business Transformation
Business Priority Enablers
Empower employees and
improve employee productivity

People Portals and Web 2.0 Collaboration

Enhance internal and external
collaboration

Increase predictability of
business results Enterprise Performance
Management/ Business Intelligence
Process
Enable integrated and
adaptable business processes Business Process Management

Harmonize data as a single

Data version of the truth Master Data Management
 Example: Procter & Gamble

1 2 3
Visualized, Proactive Prediction / Collaboration / Best
Decision Support Simulation Practice Sharing
• Reduce IT • Enhance and accelerate • Improve re-use and
costs decision-making knowledge-sharing
 Example: Procter & Gamble
STORYBOARD SUMMARY
SCENARIO
IDENTIFICATION INVESTIGATION EXECUTION COMPLETION
PLANNING

• Receive • Visualize impact • Predict impact • Take action • Save work for
proactive • Uncover root of alternate • Track project future re-use
notification cause scenarios and process
execution
 Example: Procter & Gamble
SOLUTION ARCHITECTURE
UI (Role-Based
Cockpits)

Business
Business
Process
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Management Menu Updated: Feb.4th 2006 by Pat Johnson

Store CEN Monthly Business Update (.doc)

Updated: Feb.8th 2006 by Jane Fonda
myCockpit
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Updated: Jan.24rd 2006 by Jane Fonda
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What’s Ne w
BRW 2.0 available
PLIT update

New s
Press Reports
New Product

Pro file

Transactional Applications

Middleware
Database
 <Insert Picture Here>

Agenda:
Oracle’s Industry
Leadership
Oracle in Oracle
Manufacturing leads the way
9 of the top 10 global manufacturing
conglomerates run Oracle applications

47 of the top 50 Electronic OEMs run

Oracle Applications

60 of the top 80 Consumer Products Companies*

run Oracle Applications

15 of the top 20 Food and Beverage Companies

run Oracle Applications

9 of the top 10 oil field services companies

run Oracle Applications (Reuters)
 Oracle Leadership in Manufacturing
MATERIALS
MINING
INDUSTRIAL MANUFACTURING
OIL & GAS UPSTREAM

CHEMICALS AUTOMOTIVE SUPPLIER

AGRICULTURE AEROSPACE & DEFENSE

PROCESS DISCRETE

MILL PRODUCTS
CONSUMER ELECTRONICS
SEMICONDUCTORS
OIL & GAS DOWNSTREAM
AUTOMOTIVE OEM

CONSUMER PACKAGED GOODS

FOOD & BEVERAGE

CONSUMERS
What Manufacturing Customers are Achieving…

reduced inventory by 25%

saved $5.3M in one year through improved efficiency
improved business application user productivity by 10%
Sammitr reduced financial reporting time by 50%
Motors
increased inventory turns via improved line sequencing

“In the past, we were lucky if we learned one month

later how many tires of each type we had sold. With Oracle
the quality of information has reached a completely new
level. We retrieve all sales information from the data warehouse the next day,
right down to individual customers and product details.”
-- Rami Helminen, Financial Director
 <Insert Picture Here>

Agenda:
Why Oracle
Oracle Fusion Middleware
Complete, Integrated, Hot-Pluggable, Best-of-Breed

44
Oracle Fusion Middleware
The Leader in Middleware – Gartner Magic Quadrants
• Enterprise Application Servers
• Application Infrastructure
• Application Infrastructure for Composite-Applications
• Application Infrastructure for New Service-Oriented
Business Application Projects
• Application Infrastructure for Back End Application
Integration Projects
• User Provisioning
• Web Access Management
• Horizontal Portal Products
• Enterprise Content Management
• Corporate Performance Management Suites
• Business Intelligence Platforms

45
Certified with Oracle’s Applications

Industry Applications

46
 For More Information

Quote Attribution
Title, Company

Get Started Resources

• Visit the Oracle Fusion Middleware 11g
web site at
http://www.oracle.com/fusionmiddleware1
1g
• Oracle Fusion Middleware on oracle.com
• http://www.oracle.com/industries/index
www.oracle.com/middleware
• Oracle Fusion Middleware on OTN
http://otn.oracle.com/middleware
• Technical information available at:
http://www.oracle.com/technology/tech
/soa/index.html
• Manufacturing Services information:
.html
• Manufacturing Operation Center
http://www.oracle.com/applications/sc
m/manufacturing-operations-
center.html

© 2009 Oracle Corporation 47