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Revolutionizing the Supply Chain—a Case Study O l SUN L T f tiOracle SUN Lean Transformation
Stephen Slade, Senior Director, Supply Chain Apps Marketing John Shimp, Program Manager, SUN Operations October 2012
ChallengesGoals
Extreme Makeover
GoalsTransformationFootprintResultsLessons Learned
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Manufacturing ChallengeProduct Value ChainProduct Value Chain
Concept Design Prototype Manufacturing Packaging Warehouse Logistics Channels Customer
Moving profitable products to market quicklyDifferentiation in product designMore than just releasing to manufacturingFulfillment is global and dynamicInnovation includes partners, promotions, users, channelsTotal Customer Experience, from Order-to-Service is Key
1. Short Delivery Lead Times Supported by Large FGILarge excess and obsolete write-offsComplexity with correct levels
Sun Manufacturing Supply Chain ~2010CHALLENGES
Complexity with correct levels Numerous suppliers and distribution centersCan't offer every possible configuration – customers self-configure
2. Dispersed, Fragmented Manufacturing Approach21 Major Final Assembly and Test sites
3. Complex, Expensive “4-tier” Distribution Network3. Complex, Expensive 4 tier Distribution Network• Supplier –> Distribution Center -> Distributor Warehouse -> Reseller
4. Fragmented ERP platform, Linked with Several 3PLs
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Definite Need For Change
1. High-Quality Competitive, Products,
2 Simplified Efficient MFG Supply Chain
GOALS
2. Simplified, Efficient MFG Supply ChainPredictable Lead Times
3. Realize Cost SavingsReduce Excess and Obsolete InventoriesReduce Freight and Warehousing Other Handling LogisticsOther Handling Logistics
4. Upgrade ERP/SCM/MFG e-Business Suite Apps
Extreme Makeover ~2011
1. Eradicate Inventory, Make Deep CutsMove to 100% Configured Systems, Build-to-Order ManufacturingF d S li /S l Ch i d l
ELEMENTS OF TRANSFORMATION
Focused Supplier/Supply Chain modelDirect Ship – Supplier-to-Customer, eliminate DCs & Channel StockGlobal Logistics CapabilityPredictable, Fixed Lead-Times
2. Modernize the TechnologyIntegrate business processes within Oracle eBS R12 “Global Single Instance”Implement new Mfg processes across wide range eBS Apps including....
GTM, ASCP, S&OP, Collaborative Planning, Demand Flow
3. Continuous ImprovementModify software only where it makes sense for all customers
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Today: 100% Configured SystemsFrom this To this
Supply Chain Map ~2010
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Supply Chain Map ~2011
Results: 100% Product Direct Ship
From ‘Source-to-Customer’Via the most efficient manner possible
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Manufacturing Order Flow
Manufacturing Demand Flow ExecutionBuild‐to‐Order in 10 days
eBSS
$
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SUN Application Footprint ~2010Before
E t i R Pl i
Customer Mgmt
Marketing
Partner Mgmt
Sales
Master Data Mgmt
Governance, Risk & Compliance
Oracle GRC
Risk Evaluation & Remediation
Controls & Policy Compliance
Customer Service (My Oracle Support)
Service Request Lifecycle
Configuration Mgmt
Knowledge & Communities
Health Checks & Diagnostics
Financials
Project Accounting
HR & Payroll
Contracts Advanced Pricing
Oracle E-Business Suite | G-Log
Enterprise Resource PlanningOracle Siebel CRM |
Oracle CRM On Demand | Oracle Customer Hub
BI / Enterprise Performance Mgmt
Projects
Primavera*
Project Portfolio Mgmt (PPM)
Master Data Mgmt
Order Mgmt / Quoting
Procurement
eCommerce
Oracle Siebel CRM | Oracle Fusion Middleware
Health Checks & Diagnostics
Collaboration
Oracle Beehive
Web Conferencing
Instant Messaging
Workspaces
Sales & Marketing
Finance
Service
OBIEE | Hyperion*
Current*In Process
SUN Application Footprint ~2011+Customer Mgmt
Marketing
Partner Mgmt
Sales
Master Data Mgmt
Governance, Risk & Compliance
Oracle GRC
Risk Evaluation & Remediation
Controls & Policy Compliance
E t i R Pl i
Customer Service (MyOracle Support)
Service Request Lifecycle
Configuration Mgmt
Knowledge & Communities
Health Checks & Diagnostics
Oracle Siebel CRM | Oracle CRM On Demand |
Oracle Customer Hub
BI / Enterprise Performance Mgmt
Projects
Primavera*
Project Portfolio Mgmt (PPM)
Master Data Mgmt
Financials
Project Accounting
HR & Payroll
Contracts Advanced Pricing
Discrete Manufacturing
Order Mgmt / Quoting
Procurement
Quality
Manufacturing
CTO / Configurator
eCommerce
Goods & Services
Finance & HR
Enterprise Resource PlanningOracle Siebel CRM | Oracle Fusion
Middleware
Health Checks & Diagnostics
Collaboration
Oracle Beehive
Web Conferencing
Instant Messaging
Workspaces
O S
Indirect
Direct
Sales & Marketing
Finance
Service
OBIEE | Hyperion*
Demand Planning Logistics & WMS
Current Post-Sun Migration*In Process
Global Trade MgmtSupply Planning
Service Parts Planning Field Service Execution
Product Lifecycle MgmtProduct Collaboration
Product Master Data Mgmt
Product Cost Mgmt
CAD Integration
Demantra | Oracle VCP G-Log / Oracle EBS Agile PLM / PIM Data Hub
Oracle E-Business Suite
Value Chain Planning Value Chain Execution
Supply Chain Management
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SUN eBS R12 High Level Milestones
Hillsboro, OR, Manufacturing MES Implementation
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Program Agenda
• Our Business Model• Transition to Oracle’s Latest EBS• MES Changes• Keys to Successful Transition• Looking Forward
SUN’s Business Model
• Assemble, Test 17 ProductsEngr’d Solutions Storage: Exadata Exalogic
Internal Hardware Manufacturing
– Engr d Solutions, Storage: Exadata, Exalogic, SPARC SuperCluster…
– High End Data Center Servers• Build to Order, 100% ATO• Fixed Lead Time, Unconstrained Plan• 50% Temporary Work Force• 3rd Party Logistics/Shipper• Flat BOM
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Transition to Oracle’s Latest EBS
• 12 month Project, Big Bang Approach– Vanilla Implementation Serialization at Point of Use
10.7 to R12 (Character mode to GUI)
– Vanilla Implementation, Serialization at Point of Use– CRP’s and UAT’s
• 3rd Party Shop Floor Tool Oracle MES• PN Formatting non‐intelligent• Unique routers standard router• Replace spreadsheets with BI reports, APEX apps• EOL custom applications
MES Changes
Changes
Partner with Product Development and IT
• Reduce Screens, Mouse Clicks• Cut Transaction Volume
– Mass Move• Express Transact Components• MES Exceptions• Order Fulfillment Workbench (APEX)
– SO & Job details in one view
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Keys to Successful Transition
• Dedicate resources from BusinessE l t T t i t
Hindsight is 20/20
• Early access to Test environment• Read the Manuals• Partner with IT• Conf Room Pilots/User Acceptance Test 1,2• Focus training on “Day in the life…”• Invest in training and resources• Develop local experts
Looking Forward
• Forward Scheduling Based on Material A il bilit d R
Opportunities
Availability and Resources• Rapid Planning to replace ASCP• Work with Product Dev to enhance MES
– Competencies– Clock in/Clock outBOM A h– BOM Attachments
• Zero Spreadsheets
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Conclusion: Lessons LearnedLean Transformation can be achieved in 1 year● Requires strong executive commitment on direction,
timescales, minimize customizationstimescales, minimize customizations
● Focus and mobilization across the organization
● “Big Bang” system implementation aids velocity
Integration of People, Process and Technology● Supply chain process more tightly integrated than ever before
● Training people on process and policy
● Good measurement system is an ongoing requirement
Sun Manufacturing Transformation Extreme Makeover in 12 Months
ROIROICompetitive, 100% Configured
systems, built to order
Focused supply chain model
ROIROI16.7% reduced lead times9.8% headcount reduction63.2% reduced excess, obsolete inventory
100% Direct Ship to customer
Global logistics capabilities
Predictable, fixed lead times
Consistent supply chain, product Data
Improved Quality & higher Service Levelsy
24% reduced freight & warehousing9.7% reduced inventory
Service Levels
Globalization & Standardization of processes
Greater Agility to respond to Change
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Revolutionizing the Supply Chain – Case Study O l SUN L T f tiOracle SUN Lean TransformationStephen Slade, Senior Director, Supply Chain Apps Marketing John Shimp, Program Manager, SUN Operations October 2012
