Smart Operations and IT Help Prevent Tardy Deliveries

At School Specialty, staff are responsible for delivering all the supplies a school needs—more than 75, 000 products, from pencils and desks to lab equipment, sporting goods, and curriculato 90,000 schools before the next academic year begins. It’s a huge three-month push: typically teachers write orders before school lets out, and around July 1 (when the school budget year begins) districts begin submitting purchase orders (POs) to School Specialty’s sales team. The supplies need to be in classrooms by August or September.

“It’s like a tsunami, ” says Mike Killoren, vice president of purchasing at School Specialty, noting that filled order lines jump from 100,000 per week in December to more than 800,000 per week in July.

Employees at School Specialty use Oracle E-Business Suite to plan for and execute the company’s response to this extreme seasonal fluctuation, both in the back office and the warehouse. Oracle tools are also used after the rush to evaluate performance and refine models and processes. The resulting automated, nimble operation also helps people at the company react to the shrinking budgets affecting many school systems today.

Smart Operations Demand and Supply

School Specialty employees prepare all year for the summer rush. Planning begins with sales data from previous years, pulled weekly from the company’s Oracle Order Management system and passed to a demand-planning application from Logility.

The resulting demand plan estimates how many units of each product School Specialty will sell; this figure is adjusted to account for the 5, 000 or so products in School Specialty’s catalog that chum annually (about 20 percent), economic conditions, and other factors. School Specialty buyers also use the demand plan to begin discussions with the company’s 3,000 vendors about needs for the coming season.

“Logility does the math and then passes the information back into Oracle as a forecast, ” Killoren explains. “Then we use Oracle MRP [materials resource planning] functionality to calculate what we should buy based on the forecast. We refer to that as a supply plan. ” The supply plan incorporates not just hereby solving critical supply chain problems), already allows Lojas Renner staff to measure customer behavior and modify product offerings based on local tastes. Now managers can clear stock (avoiding markdowns) and accurately meet market demand (avoiding out-of-stock situations). In fact, managers have been able to reduce markdowns by as much as 20 percent through better demand planning. This, in turn, has lowered inventory costs and enabled inventory managers to focus on the right products for each store. As a result, Oracle Retail applications have helped Lojas Renner increase gross margins by 2 percent, a significant improvement.

On the supply side, the company needed to be flexible with its suppliers. “Supply chain excellence, ” Simone says, “goes directly to the bottom line. ” According to Simone, Lojas Renner’s suppliers are a key to the company’s continued success, because one challenge that comes along with Brazil’s growth is competition. “Suppliers have more options now for whom to work with, ” he says. “We need loyalty from our suppliers. ”

To help ensure that fidelity, Simone says, Lojas Renner is trying to give its suppliers more visibility into its demand forecasts so they can adjust their capacity in advance. Simone and his team built a portal with Oracle iSupplier Portal (part of Oracle E-Business Suite) to give suppliers visibility into the company’s demand system. “We have between 700 and 800 suppliers, both big and small, from LOréal to Chinese suppliers to suppliers with home-based businesses, ” Simone says. The portal enables Lojas Renner to give all of them “the big picture of their future with the company: volumes, order anticipation, a working partnership. We can say to our suppliers, ‘Let’s start booking production for next year. ’” That, in turn, enables the suppliers to perform with greater efficiency and keeps them doing business with Lojas Renner.

Smart Operations and Retail CloudBurst

Lojas Renner’s greatest technological leap forward was its decision to move into the cloud, taking advantage of Oracle’s SaaS offerings. According to Balbinot, the advantages of the SaaS model are multiple and substantial.

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What is Oracle Insight methodology?

What is Oracle Insight Methodology? Before getting into it, you should know that Oracle Insight was created to be a global business strategy development practice to leverage skilled industry experts within Oracle in standards such as Supply Chain Operations Reference (SCOR) for supply chains and Information Technology Infrastructure Library (ITIL) for datacenters, and a proven methodology for identifying and answering IT strategy questions.

An Oracle Insight engagement can take from 3 to 6 months and follows a 4-step methodology that is customized for each individual client.

1. Industry perspective. Oracle Insight facilitates discussions with customer executives about the trends, best practices, challenges, and opportunities particular to the customer’s business.
2. Discovery. The Oracle Insightteam visits the customer site to study capabilities—in personnel, processes, and technology—that can be leveraged in an improved strategy. The team uses proprietary Oracle intellectual property and industry-specific frameworks in its assessments. Continue reading What is Oracle Insight methodology?


Supply Chain Best Practices

A customer changes a large order at the last minute; a key component supplier experiences a shortfall. Surviving in a fiercely competitive, volatile market means companies must be able to achieve supply/demand balance rapidly. Most companies with mature supply chain processes have demand and supply planning processes that run at a regular cadence and produce good tactical-level plans for execution. However, when immediate problems occur, the batch planning processes have too much information latency, making it difficult for companies to react rapidly and make optimal decisions.

Companies can build agile and responsive supply chains by complementing their existing planning processes with real-time rapid planning capabilities that allow them to react within minutes to unexpected supply chain events.

The ideal solution for rapid planning capabilities should allow for supply chain best practices such as mapping out “what-if” scenarios, allocating customer demand dynamically {auto allocation), prioritizing customer orders for production (clear- to-build analysis), and performing root cause analysis for demand that is late (late demand analysis), while integrating seamlessly with other planning processes:

  • What-if capabilities, which allow the assessment of alternative supply chain scenarios, simulate the impact of incremental demand forecast or capacity changes to achieve optimal supply/demand balance in a matter of minutes. While the demand-side changes are generally triggered by demand forecast quantity or product mix changes, the supply-side changes could include simulating the impact of updating product bills of material to correct lifecycle status, viewing the impact of alternate parts, or substituting components on supply/demand matching scenarios.
  • Auto allocation, the process of automatically apportioning product supply to customer orders according to a transparent set of business rules and criteria, is especially important to original equipment manufacturers when product demand exceeds product capacity or supply. Orders can be allocated based on flexible business rules to optimize profitability and maximize market share. A similar set of capabilities can be leveraged to simulate the impact of customer order request changes rapidly in order to improve customer responsiveness.
  • Clear-to-build analysis, which allows planners to quickly view and simulate whether sufficient material is available in order to take customer orders, is extremely valuable to manufacturers who produce some or all of their products in-house. In case of material conflicts or shortages, planners can simulate reallocation of on-hand material quantity across different make orders to arrive at an optimal prioritization of make orders in order to achieve company objectives.
  • Late demand analysis allows planners to identify the root cause of a late customer order and proactively develop a contingency plan to contend with a potential material or resource shortage. This capability allows planners to drill down from a sales order that is late all the way through the entire supply plan, including the extended supply chain, to quickly identify root cause for the delay and take proactive action to minimize occurrence.
  • Rapid planning capabilities provide an integrated planning approach that deals with supply/demand disruptions in near-real time. A company that complements existing planning processes and systems with these new capabilities can match demand and supply with a quick assessment of various scenarios in order to arrive at optimal decisions. The resulting supply chain plans are of high quality, promoting enterprisewide visibility, predictive and real-time analytics, transparency, and collaboration among planners and stakeholders.

Real-Time Supply Chain

Over the past two decades, supply chain organizations have become much more responsive to customer demand. This evolution was largely achieved by eliminating inefficiencies, integrating processes, and manufacturing products only after receipt of an order. But globalization, outsourcing, complex sourcing relationships, and a volatile economic climate have limited the competitive advantage of simply automating the supply chain. It’s not enough.

Today’s supply chain needs to sense and respond to changes in real time and use information to drive intelligent decision-making. This requires tight alignment between planning and execution, decision-making, and collaboration.
But progress is limited by poor integration, a lack of supplier orchestration, limited visibility into demand, and poor data quality.

Fortunately, solutions exist to deal with each of these issues. Operational planning processes involve evaluating demand and manufacturing capacity and developing plans and schedules to meet that demand. But existing process is largely hierarchical, serial, and static. Most companies separate planning from supply chain execution—but tighter alignment is necessary as timescales compress. Sales and operations planning (S&OP) is the primary integration point between planning and execution. As such, S&OP is in a perfect position to align the objectives of finance, sales, marketing, and operations departments. Most companies lack the tools to support S&OP, but deploying optimization tools and increasing the frequency of S&OP activity can improve performance.

Planning can also be improved by electronically populating tools with more-granular business data—including market, cus- tomer, and product information—to more accurately reflect the complexity of the marketplace.

Supply chain visibility has become increasingly complex as companies outsource manufacturing and form complex and strategic supplier relationships. Collaborative planning and process orchestration capabilities have not evolved to keep pace. Supply chain organizations must eliminate this latency to orchestrate activities across organizational boundaries. Collaboration tools and intelligent alerts can electronically share plans and schedules, track supplier commitments, and deal with exceptions. Using a service-oriented architecture (SOA), companies can develop reusable, device- independent collaboration services to address these needs. Standards-based communication protocols can then be used to bridge system gaps with suppliers.
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