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Information Driven Value Chains“Outside The 4 Walls”Presenter’s Name

Presenter’s Title

March, 2008

March, 2008

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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.

SOX DISCLAIMER

• Information Driven Value Chains

- Demand Chain

- Design Chain

- Supply Chain

• How Oracle Delivers

Agenda

55

Supply Chains of the 20th CenturyTraditional Focus: Inside the 4 walls

Administrative Infrastructure

HR

Research & Development

Procurement

Source: Dr. Michael Porter (Harvard, 1985)

T R A D I T I O N A L S C M F O C U S

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“The need to align customers, products and supply chains is too

often overlooked as a source of sustainable competitive advantage.”

Carter et al, Supply Chain Management Review, 2007

From Supply Chain

To

Value Chains…

77

21st Century Value Chains

Administrative InfrastructureHR

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INNOVATIONINNOVATIONSUPPLIER RELATIONSHIP MGTSUPPLIER RELATIONSHIP MGT

Demand Chain

Demand Chain

Supply ChainSupply ChainDesign ChainDesign Chain

Design ChainDesign Chain Design ChainDesign Chain

Supply Chain Supply Chain Supply Chain Supply Chain Demand Chain Demand Chain Demand Chain Demand Chain

• Global, Complex, Dynamic

• Convergence of Chains - Demand, Supply, Design

• Multi-enterprise Orchestration “Outside-the-4-walls”

• Global, Complex, Dynamic

• Convergence of Chains - Demand, Supply, Design

• Multi-enterprise Orchestration “Outside-the-4-walls”

Where Are You Today? Survey of Supply Chain Progress: 5 Levels of Maturity

Source: Supply Chain Management Review, Survey of Supply Chain Progress: Still Waiting for the Breakthrough, Charles C. Poirier & Francis J. Quinn, Nov 1, 2006

IEnterprise Integration

IEnterprise Integration

VFull Network Connectivity

VFull Network ConnectivityIV

Value ChainConstellation

IVValue Chain

ConstellationIII

PartnerCollaboration

IIIPartner

CollaborationII

CorporateExcellence

IICorporateExcellence

Collaborative Commerce

Inter-Enterprise

Functional/Process

Intra-Enterprise

External TotalBusiness System

Most are working Most are working towards level II towards level II (Today’s market)(Today’s market)

Most are working Most are working towards level II towards level II (Today’s market)(Today’s market)

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“Information about the package is as important as

the package itself.”

Fred SmithCEO, FedEx

Information

Information

Data Proliferation

• More data created in last 2 yrs than in the past 40,000 yrs• Total data quadrupled in the last 2 yrs• Will continue to double every year

To

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a W

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(in

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21m

15m

57m

33m

Traditional Supply Chain Approach Perfect Internal Functions

Undefined, Ambiguous Information

External Processes & Information

Corporate Objectives

Unanticipated Events

Cross-LOB Programs

Predefined Processes

Disruptive Changes

Supplier StrikeNew Regulations

M&As

Demand Shocks

Competitor Plans

Price Flux

Rigid Processes Optimized for Static ConditionsA New Approach For a New Environment Is Needed …

A Better Approach: Information Driven Real-time Global Visibility Into

• Demand signals

• Supply network

• Market shifts

• Information contextualization

• Collaboration

• Process framework

Decisions, Planning, Execution All Driven

By Real Time Actionable Information

Decisions, Planning, Execution All Driven

By Real Time Actionable Information

Information Driven Approach For a Dynamic, Global Environment

NIMBLE PROCESSES

Open, Information-

centric Approach

DISRUPTIVE CHANGES

UNPLANNED SCENARIOS

EXTERNAL INPUTS

AMBIGUOUSDATA

CORPORATE OBJECTIVES

NEW PROGRAMS

InboundLogistics

OperationsOutboundLogistics

Marketing& Sales

Service

Use INFORMATION

to

Predict Market Requirements and

Risks

Adapt to Volatile Market Conditions

Align Operations Across Global

Networks

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“The successful business executive is a forecaster first,

everything else follows”

Peter Bernstein‘Against the Gods – The Remarkable

Story of Risk’

Predict

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PREDICT Markets and RisksWorld Class Demand Chain & Risk Management

Requirement Enabler Value

Mitigate Risk

Risk metrics, link to strategic supply chain design & ongoing optimization

Minimize write-offs, optimize response to disruptions, grow returns from assets

Predict and Shape Demand

Demand Mgmt, Predictive analytics, Pricing & promotion optimization

Maximize revenue and achieve best returns on marketing spend

Improve Value Chain Visibility

Collaborative systems for partner and internal visibility

Minimize uncertainty; improved ability to identify issues

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Predict and Shape DemandUse real-time data & advanced statistics for closed loop

• Real-Time Information from

all Demand Signals

• Synthesize information into holistic forecast

• Accurately Predict Demand via Automated Analytics

Real-time Channel Data & Causal

Factors

SENSE

• Use predictive analytics to optimize promotions

• Manage price erosion in all phases

• Use Analytics to determine optimal pricing

List

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Seg

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Invo

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Rev

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102 Poc

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93 Gro

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argi

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107

Poc

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argi

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67

Netlift

Baseline0

500

1000

1500

2000

2500

3000

Week 1 Week 6 Week 11

SHAPE

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• Demand Management• Real-time Sales and Operations Planning

Solution:

• Generates forecasts from customer POS data • Increase in stock of fast moving, short life cycle video games• Improve leverage with major retail customers• Increased order fill rate • Reduce out-of-stocks

Business Results:

• Lost sales due to retail stock-outs• Lost revenue opportunities from poor retail product mix• Returns and write downs from obsolete inventory

BusinessChallenges:

Take-Two InteractiveStarting with a better prediction of demand

Publisher, developer,

and distributor

of interactive

entertainment software, hardware,

and accessories worldwide.

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“The world is changing very fast. Big will not beat small anymore.

It will be the fast beating the slow.”

Rupert MurdochChairman & CEO, News Corporation

Adapt

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ADAPT to Drive LeadershipIntegrate Product Development with Supply Chain

Requirement Enabler Value

Flexible Business Processes

Standard integrations, modifiable, extensible business process platform

Effectively respond to dynamic business changes

Rapid Profitable Product Innovation

Product Lifecycle Mgmt with Demand-Driven Lean Mfg

First to market & grow market share

Optimize Supply Globally

Global material planning, sourcing, & logistics

Leverage global markets in a cost effective and responsive manner

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Accelerate Innovation – Maximize ProfitsReduce Time to Market with Product Lifecycle Management

• Accelerate product innovation to maximize product profitability

• Manage product information, collaborative processes and decisions

• Streamline product lifecycle process across the global value chain

Cross-Enterprise & Value Chain Coordination

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• Deployed Agile PLM to over 6,500 external and internal users in all 6 business units worldwide

• Global deployment of Oracle E-Business Suite including Supply Chain products, Siebel CRM and PeopleSoft HCM

Solution:

“Agile provides us with the advanced

engineering and collaboration features that

will ensure we continue to be at the forefront

of wireless technology.”

Norm FjeldheimSr. Vice President

and Chief Information

Officer

• Reduced cycle time from days to minutes for data iterations with contract manufacturers

• Saved money and time by eliminating suspect data, failures and errors with one true source for all product information

• Provided global, 24/7 accessibility to product information

Business Results:

• Slow product development due to scattered product information across global manufacturing sites

• High costs of data integration failures and errors• Lack of user-specific secure, regulated, global access to data

BusinessChallenges:

Qualcomm“QUALCOMM develops its technologies and solutions for the purpose of enabling key participants in the wireless value chain.”

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Align

“Vision without execution is hallucination”

Albert Einstein, Scientist, Visionary, Nobel Laureate

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ALIGN the Value Chain to Business GoalsGlobal Alignment Across Demand, Product & Supply Chain

Requirement Enabler Value

Common information with analytics; flexible ways to connect

Comprehensive information mgt. platform; Embedded collaborative tools (eg. Web 2.0)

Eliminate confusion and conflict. Create a sense of community. Make better business decisions at all levels

Synchronize plans and actions across functions aligned w/ goals

Real time Sales & Operations Planning Integrated Business Planning

Focus concerted action on achieving goals from all organizations

Align the global extended Value Chain

Multi-Enterprise business process orchestration

Better manage responsiveness by moving to pro-active stance

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Real-Time Sales & Operations Planning

• Utilize real time demand visibility to quickly sense and respond to changes

• Synchronize plans across Finance, Sales, Marketing, and the Supply Chain

• Monitor performance and drive continuous improvement

Align Plans with Actions Across the Value Chain

Sales and Operations Planning Process

Product ReviewDemand Review

Supply ReviewExecute and Measure

Management Review

Sense

Respond

Shape

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• Demantra Real-Time Sales & Operations Planning• Generates forecasts from customer POS data • Compares customer and generated forecasts and routes

exceptions to planner, sales representative, or customer

Solution:

• Increased order fill rate from 55% to 95%• Increased inventory turns by 100%• Reduced price protection claims by 40%• Reduced logistics costs by 65%

Business Results:

• Improve service levels and on-shelf availability of products at large retailers in order to increase revenues

• Keep inventory levels and logistics costs to a minimum • Improve ability to predict sales volume

BusinessChallenges:

V-TechAchieves Alignment Through S&OP $1 billion in revenues,

operating worldwide

Manufacturing in China

Leading provider of cordless phones and electronic children’s

toys“A 1% out-of-stock rate at a retailer is not just a 1% loss in revenue. It represents a higher multiple, as it is always the high volume stores that will go out of stock first. Our goal is to keep these stores in stock all the time. We want to grow revenue by improving our ability to sell products through consumer-driven planning processes with our customers.” − Nick Delany, Senior Vice President, VTech

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How Oracle Delivers…

Information DrivenValue Chains

Oracle Invests in Best-in-Class “Outside-in” solutions

Oracle AcquiresSiebelBest in Class:Trade MgmtCRMServiceHelp DeskAnalyticsiSupportMktg AutomationSFA

Oracle AcquiresDemantraBest in Class:Demand Forecasting, Trade Optimization, and S&OP

Oracle AcquiresRetek, 360 Commerce,Profit LogicBest in Class: Retail Applications

Oracle AcquiresG-LogBest in Class:Logistics and Supply Chain Execution

Oracle AcquiresHyperionBest in Class:Analytics, Consumer Insight

Oracle AcquiresAgile/ProdikaBest in Class:Product Lifecycle Management

Build-Buy-Integrate strategy enables…Build-Buy-Integrate strategy enables…

Oracle Value Chain Solutions Complete, Integrated, Open

Financials / HR Master Data Management

Global Business Intelligence: Visibility / Analytics

Colla

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Colla

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Colla

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Colla

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Demand Chain

Management

Demand Chain

Management

Supply Chain

Management

Supply Chain

Management

Design Chain

Management

Design Chain

Management

CustomersCustomers DistributionDistribution ManufacturingManufacturing SuppliersSuppliers

Financials / HR Master Data Management

SUPPLY

MANAGEMENT

Purchasing

Settlement

Supplier Mgt

Contract Mgt

SUPPLY

MANAGEMENT

Purchasing

Settlement

Supplier Mgt

Contract Mgt

SUPPLY

PLANNING

Sales & Operations Planning

Planning & Scheduling

Order Promising

Network & Inventory Opt.

Service Parts Planning

SUPPLY

PLANNING

Sales & Operations Planning

Planning & Scheduling

Order Promising

Network & Inventory Opt.

Service Parts Planning

DEMAND

MANAGEMENT

Forecasting

Promotions Mgt

Demand Collaboration

VMI

DEMAND

MANAGEMENT

Forecasting

Promotions Mgt

Demand Collaboration

VMI

PRODUCT LIFECYCLE MANAGEMENT

New Product Introduction, Quality, Cost, Compliance, Design for Supply

PRODUCT LIFECYCLE MANAGEMENT

New Product Introduction, Quality, Cost, Compliance, Design for Supply

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Pricin

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MANUFACTURING

Mixed-mode

MANUFACTURING

Mixed-modeLOGISTICS & DISTRIBUTION

Warehouse, Transportation

LOGISTICS & DISTRIBUTION

Warehouse, Transportation

SERVICE

Planning & Execution

SERVICE

Planning & Execution

Industry’s Best-in-Class Footprint

Business Intelligence: Visibility / Analytics

Integrated Business IntelligenceRole-Based Intelligence Dashboards

Slice and Dice Data by

Different Time Periods

Stop Lighting Indicators

Scrolling Status Grids

Multiple Chart Types

and Views

Multiple Chart Types

and Views

Successful Customers

High Technology

Industrial Mfg

Automotive

Aerospace & Defense

Consumer Goods

CPG – Food & Bev

Medical Devices

Chemicals

Retail

Only Oracle… Best-in-Class, Complete, Integrated

• Demand Chain Management Best-in-Class Demand Management Real time Sales & Operations Planning Collaborative Demand Planning & Advanced Analytics

• Design Chain Management Best-in-Class Product Lifecycle Management Real time Product Design Collaboration Single Product Information Repository

• Supply Chain Management Best-in-Class Logistics & Transportation Management Best-in-Class Supplier Relationship Management Collaborative Planning, Optimization & Intelligence

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Reserved.

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