Oracle DRP at
Agilent Technologies
Service Parts Organization
(SPO)
Oracle OpenWorld 2013
Value Chain Planning SIG
September 21, 2013
Jong Mira
Business Process Engineer
EMG Supply Chain Systems Solutions
Agilent at a Glance
November 28, 2012
Agilent Profile
2
REVENUE IN FY12 $6.9 billion (more than 70% generated outside the U.S.)
EMPLOYEES 20,500
CEO William P. (Bill) Sullivan
PRESIDENT & COO Ron Nersesian
CUSTOMER LOCATIONS 100+ countries
MANUFACTURING AND
R&D LOCATIONS U.S., Europe, Asia Pacific
NYSE A
• Wireless technologies
• Mobile phone R&D and manufacturing
• Aerospace/defense systems and maintenance
• Computer & industrial research & manufacturing
• Food safety, quality
• Energy research, production
• Quality of air, water, soil
• Forensics, drugs of abuse
• Pharmaceutical research and manufacturing
• Academic and government research
• Cancer diagnostics
• Cytogenetics research
• Genomics tools for molecular analysis
Agilent Technologies
November 28, 2012
Agilent Profile
3
Addressing critical measurement challenges
FY12 Revenue*
$402M
Electronic Measurement Group
Chemical Analysis Group
Life Sciences Group
Diagnostics and Genomics Group
FY12 Revenue: $6.9B
Agilent Research Laboratories Enabling technology breakthroughs across Agilent
FY12 Revenue*
$1.6B
FY12 Revenue
$1.6B
FY12 Revenue
$3.3B
*DGG segment created
in Q312; FY12 revenue
restated
Glo
bal F
inancia
ls
Oracle Footprint
Agilent Oracle ERP Footprint
4
Projects
Engineering
Payments ASCP
Demantra
GOP
Inventory
Optimization
Property
Manager
Item/
Inventory
Purchasing
iProcurement
iSupplier
Portal
Bill of Materials
Work-in-
Process Warehouse
Mgmt
Shipping
Mobile Supply
Chain
Accounts
Receivable
Accounts
Payable
General
Ledger
Fixed Assets
Cost
Management
Project
Costing
Project
Billing
E-tax
Supply Chain Financial Management
Incentive
Compensation
APCC
Costing
Quality
Supplier
Scheduling
Sourcing
Shop Floor
Management
Flow
Manufacturing
Manufacturing
Scheduling
Technology / CORE
Identity
Management
Fusion
Middleware DB 11g
eCommerce
Gateway BI Publisher Web Center
Financials Logistics Projects
Preventative
Controls
Application
Access Controls
GRC
Release
Management
Advanced
Pricing
Order Entry
Quoting
Order
Management
iStore
Configurator
Order
Management
Order Mgmt
Sales Comp
Property
Manufacturing Procurement PLC Planning
Access Mgmt
Compliance
Production
Scheduling
Agilent’s Oracle Journey
5
Project Everest to Present
Big bang implementation at Agilent’s 3 largest manufacturing sites June, 2002 Full EBS Suite Single Source and Planning instance architecture Included global financials Sonoma County, CA (Test and Measurement) Singapore (Semiconductor) Penang (Semiconductor and T&M) Transformed BOMs and Routings and created Agilent-wide standards Oracle Discrete Manufacturing for instruments and sub-assemblies,
OSFM for lot-based semiconductor products and components Implemented 11.5.5 with some functions patched to 11.5.7 Completed rollout to all sites Spring, 2004
Upgrade to 11.5.10 February, 2007 Upgrade to 12.1.3 June, 2012
84 OU and 151 active Orgs 13 manufacturing sites in 7 countries All manufacturing orgs WMS enabled
SPO Supply Chain
6
Statistics
3 Distribution Orgs (K-Orgs) for AM, AP & EU region Planned in ASCP 120K Items, all purchased
62 Field and Repair Center Orgs worldwide
3 “mini”-DC planned in ASCP
20 Factory Orgs Provides assemblies Provides lower-level purchased items for high-volume items
Hundreds of direct suppliers
Provides low-volume, non-factory-required, purchased items direct to SPO
2 classifications of items: High-volume items all planned in ASCP, each K-Org can buy
direct from suppliers Low-volume items (Control Tower Items) demand consolidated
in 1 K-Org closest to the supplier, supplying for all other orgs
SPO Supply Chain
7
Simplified Diagram for High Volume Items
F01
F03
Factory Orgs
Supplier
A
Supplier
B
Direct Suppliers
ASCP
Field Engineer
Repair
Center
Customer
Asia Pacific
Field Engineer
Repair
Center
Customer
Americas
Field Engineer
Repair
Center
Customer
Europe
K03
AP
K04
EU
Distribution Center
K02
AM
ASCP
SPO Supply Chain
8
Simplified Diagram for Control Tower (CT) Items at K02
K02
AM
K03
AP
K04
EU
F01
F03
Supplier
A
Supplier
B
Field Engineer
Repair
Center
Customer
Factory Orgs
Direct Suppliers
Distribution Center
Asia Pacific
Field Engineer
Repair
Center
Customer
Americas
Field Engineer
Repair
Center
Customer
Europe
Item X – Planned @K02, Not Planned
@K03 or K04
ASCP
SPO Supply Chain
9
Current Planning Process for Control Tower Items
K02
AM
K03
AP
K04
EU
Distribution Center
Item X – Planned @K02, Not Planned @K03 or
K04
WW
Forecast
•WW Forecast representing all
demands input into Control
Tower
•Issue: Inventory in non-CT
Orgs are not used in the netting
process resulting in higher
inventory than necessary
SPO Opportunity
10
Right levels of inventory at DC, minimal total WW inventory
How can SPO have the correct levels of inventory at the different Distribution Centers?
How can SPO minimize total WW inventory?
Proposed Multi-Phase Solution
11
1. Move these Control Tower Items to ASCP • Will allow better utilization of inventory in the non-CT orgs
2. Implement DRP • Inventory rebalancing will help reduce total WW inventory
3. Implement Demantra • Improve global forecasting process
4. Implement Inventory Optimization • Optimize safety stock at the K-Orgs for increased service level
5. Implement Service Parts Planning (SPP) • Leverage Demantra forecasting, Inventory Optimization, Supply
Chain Planning in one integrated application • Utilize SPP functionalities around defectives/repair/substitutes • Subject to I.T. funding since Agilent does not have a license
for SPP
ASCP
SPO Supply Chain
12
1st Phase: Proposed Planning Process in ASCP
K02
AM
K03
AP
K04
EU
Distribution Center
Item X – Planned @K02, K03 and K04
AM
Forecast
•Solution: Create regional
forecasts (when applicable) and
source from CT Org, plan all
items in ASCP
•Impact: Inventory in non-CT
Org can be used to net against
the regional forecasts in the
non-CT Org
•Benefit: Improved inventory
•Opportunity: There are still
cases where the inventory in
the non-CT Org is “excess” in a
certain timeframe. ASCP does
not support circular sourcing.
AsiaPac
Forecast
Europe
Forecast
DRP
SPO Supply Chain
13
2nd Phase: Proposed Planning Process in DRP
K02
AM
K03
AP
K04
EU
Distribution Center
Item X – Planned @K02, K03 and K04
AM
Forecast
•Solution: Move from ASCP to
DRP
•Impact: Excess inventory in
any of the orgs can be used to
fulfill demands in the supply
chain
•Benefit: Improved WW
inventory not just for CT Items
but for high-volume items as
well
AsiaPac
Forecast
Europe
Forecast
DRP Set-ups
14
•Create sourcing rules, check
Inventory Rebalance flag
•Assign sourcing rule at the Org-
level since all items in the org can
source from other K-Orgs
Progress and Results to-date
15
1st Phase (ASCP) currently in Production Pilot Plans running in under 20 minutes in production Inventory in non-CT orgs being considered Reduction in planned orders to external suppliers and factory orgs
2nd Phase (DRP) Testing completed
Full-size DRP completes in 1 hour in Test instance Planning logic similar to ASCP + inventory rebalancing UI similar to ASCP, more distribution-centric Inventory rebalancing working as expected, for CT and non-CT
(high-volume) items Propose to execute inventory rebalancing every month aligned
with forecasting process , instead of quarterly (manual) Target implementation in FY’14
DRP Results
16
•Planned inbound shipments
generated for excess
supplies in other orgs
•DRP still recommends a
planned order to supplier
when there are no excess
supplies
Thank You
17
Contact
Jong Mira
Business Process Engineer
EMG Supply Chain Systems Solutions
Agilent Technologies
www.agilent.com
