Implementing Oracle 11i Demand Planning

June, 2007

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Global Demand Planning Agenda

§ About the company § What is CPG Global Demand Planning § Project Background and Implementation § Process Deliverables § Other Data Available/Definitions § Monthly Demand Planning Cycle § Lessons Learned § Questions

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About the Company § Global company with 6 manufacturing sites

– Division of Cummins Inc § 1.2 Billion sales § Manufacturers of power generation equipments

– Standby and prime power – Residential, Marine and Recreational – Transfer switches

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High Level Process Map

Inputs (Xs) Outputs (Ys)

ODP Statistical ForecastExternal ForecastsVPI Team New Product FcstAnalysis/JudgementSales Meeting

KPIsSupporting AnalysisS&OP Discussion

Apply Constraints - Labor, Machine, MaterialAnalysisOperations Meeting

Constrained Forecast Agreed S&OP PlanS&OP DiscussionKPIs

Final S&OP Plan Financial ForecastPrice/Cost Inventory ForecastBeginning Inventory

Update MPS/Constrained

Forecast

Consensus Constrained Forecast

Deliver Constrained

Forecast to S&OP Audience

Develop Financial and Inventory

Forecast

Develop Consensus

Unconstrained Forecast

S&OP Process Map

Deliver Unconstrained

Forecast to S&OP Audience

Consensus Unconstrained Forecast

Consensus Unconstrained Forecast

Item/Group/Family level Unconstrained Forecast -

DEMAND

GLOBAL DEMAND PLANNING

MPS and Site Planning

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Business Challenges

§ Individual forecast at site level – Demand based – Excel spreadsheet

§ Little / no visibility to global demand § Different processes followed for forecast

generation and manipulation § Complexity of the process

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The What, How and Why

§ What - CPG Global Demand Planning is a process enabled by Oracle Demand Planning (ODP) which delivers both an Unconstrained and Constrained forecast for the Commercial, Consumer and ESB businesses.

§ How – Transactional data is extracted from 8 ERP systems globally and loaded into ODP for consensus forecast development.

§ Why – To provide a industry best practice forecasting process for CPG that supports the strategy to “Become a Truly Global Business”

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Project Background

§ March, 2005 launch of the Project § May, 2005 First Team Meeting § By end of 2005 Team was completing the M3, Solution

Development phase § By June, 2006 the Team had completed testing, limited

production and launched into full production § Q3, 2006 and early Q4, the process was plagued by

technical and performance issues § By the end of 2006 all performance and technical issues

resolved

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What does the Process Deliver?

1.  Consensus Unconstrained Forecast §  A forecast of what we could sell with current product

and price offering independent of operational constraints

2.  Consensus Constrained Forecast §  A projection of what the business can deliver after

constraints are factored-in. A forecast that represents what is real.

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What else can it deliver? Global visibility of:

1.  Historical shipments in units and dollars 2.  Historical demand by request date in units and dollars 3.  Backlog in units and dollars by request date and by promise date 4.  AOP 5.  Allocation 6.  External forecasts (Sales, Customer)

Sliced By (Dimensions and Hierarchies): 1.  Product Family, Group, Supply, Rating 2.  Business Unit (Commercial Sets, Gdrive, Consumer, and ESB) 3.  Geography (Area, Region, Sub Region) 4.  Customer or Customer group 5.  Supply Entity (FRD, KNT, SGP, BZL, CHN, IND, GDR) 6.  Time (Cummins Accounting Calendar weeks, months, quarters, years)

10 ODP Instance

Oracle Demand Planning

Custom StagingTable for data

cleansing /mapping

ODP StagingTable

ODP Fact Table

PulltexttextData

Files

FridleyOracle10.7

BrazilOracle11.0.3

UKMapics

SingaporeMovex11.3

COF MexicoCUMMSA

ChinaMovex10.8

IndiaOracle11.0.3

texttextDatafiles

texttextDatafiles

texttextDatafiles

texttextDatafiles

texttextDatafiles

texttextDatafiles

texttextDatafiles

texttextDatafiles

Data Extraction Architecture

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CPG Demand Planning – The Nuts and Bolts

§ Monthly Updates § Delivers a rolling 18 month forecast § Directly Supported by

–  15 Demand Planners globally –  3 KPIT Offshore Resources –  1 Demand Plan Administrator

§  Indirectly Supported by –  1 IT application leader –  9 local IT resources for data extracts –  2 Data Base Administrators - DBA’s –  Input from many Sales, Marketing and Operations folks

§  1 Dedicated Production Server §  1 Development Server with 3 ODP Instances

–  Testing, Patch Installs, Staging

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Technical challenges

§ Demand plan build cycle performance –  Too many ship to locations caused the build cycle to be more

than 72 hours – Removed Ship to Location from the Geography hierarchy to

gain performance improvement. Cycle reduced to 24-48 hours

§ Application patch level § Lack of support expertise § Too many hierarchies and levels causes for

performance degradation

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Cycle Activities

Week 1 - Refresh Activities

Week 2 – Unconstrained Fcst

Week 3 – Constrained Fcst Week 4 – All fcst submissions due, build global plan

M T W T F S S

7 8 9 10 11 12 13wk1914 15 16 17 18 19 20

wk2021 22 23 24 25 26 27

wk2128 29 30 31 1 2 3

wk22

May

Key Week

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122334Constrained Submissions Due/Data Stream from Operations Due Pending Implementation

Cummins Accounting Month EndSource Instance Data Extract, Custom Staging load, ValidationData Mapping/Cut-off for Custom Data Stream Load1) Final Data Load into ODP, 2) Refresh Demand Plans: Global, Unconstrained Comm'L Sets, Gdrive, Consumer, and ESB. 3) Populate Measures, and 4) Planner Cube Distribution

Communication of Unconstrained Forecast to Operations

Commercial Unconstrained Submission DueCollect Submissions, Commercial Constrained DP Refresh and Planner Cube Distribution

Demand Planners

KPITDemand Planners/Administrator

KPIT/Administrator

Demand Planners

Demand PlannersAdministrator

Planner analysis and preparation of Unconstrained Forecast Demand Planners

ResponsibleActivity

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Lessons Learned

§ Global team complexity – Getting the team together at an earlier stage in the project helped team building and was able to accomplish a lot rather than the 4 hours conference calls per week

§ Training sessions using Lotus sametime and conference calls was not as effective – hands on training to users will be provided as part of CRP2

§ Data Extract, Mapping and Validation timing underestimated

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