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BPM for Manufacturing (Business Process-Centric Manufacturing) v4

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BPM for Manufacturing (Business Process-Centric Manufacturing) v4

  1. 1. <Insert Picture Here> Drive manufacturing excellence – Enable process- centric approach for next generation manufacturers G. Sudhir Menon Head – Industry GTM Solution
  2. 2. 2 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.
  3. 3. <Insert Picture Here> Today’s Agenda 1 Manufacturing Trends and BPM 2 Key Take Away 3 4 Use Cases Oracle Middleware Solutions for Manufacturing
  4. 4. Demand Driven Manufacturing 2.0 “Four factors to drive the manufacturing sector in the near future are supply chain agility, open standards, globali-sation and customer responsiveness, predicting there will be more investment in people, processes and systems”
  5. 5. Business Unit Driven I Internally Focused Externally Focused Cost Focused Extended & Cross- Functional Integration Value Driven Processes II III IV Revenue Focused Cycle of Business Transformation Integrate & Consolidate Core Functions Single Company Model • Shared Services • Single Instance • Process Standardization •Network Centric Model •Customer and Channel Driven (Outside-In) •Supply Chain Collaboration •New Product Development & Launch Profitable GrowthMargins Source: AMR Research 2007 •Performance Driven Model • Real-time Decisions (Sense and Respond) • Knowledge Centric • Integrated, Adaptive Processes
  6. 6. Differentiation GapBusinessDifferentiation Time Company Integration III III IV Performance Integration III III IV Network Integration III III IVIT is Here Business is Here Gap
  7. 7. Standardized Business Processes a Top Priority “IT’s Top Technology Priorities for 2008” 32% Of companies with revenues over $1billion say standardizing and consolidating their IT infrastructure is a top technology priority—more than any other. “State of the CIO 2008” survey
  8. 8. Oracle: Driving Differentiation & Re-use Process Complexity Automation Based, Transactional Process Reach Knowledge Based, Collaborative Internal, Power Users External, Universal - Customer Self Service - Network Centric Product Innovation - Collaborative Supply Execution - Employee Self Service - EDI / VMI - Sales & Operations Planning - Demand Sensing & Shaping - Forecasting - Order Entry - Basic Accounting - Distributed Order Management - AP - AR - E-Commerce - Account Management (SFA) - Channel Management - Employee Tracking - Supplier Development - New Product Development & Launch - Personalized Customer Service Differentiated Business Processes (20% of IT Budget) Commodity Business Processes (80% of IT Budget) Service Oriented Architecture Business Process Mgt Enterprise 2.0 Client/Server Architecture Enterprise Applications
  9. 9. Driving Business Efficiency & Expansion The Impact of BPM Business Process Management Efficiency Expansion • Competition • Cost-Of-Goods & Workforce • Governance & Accountability • Process Efficiency • IT Costs • Systems Lifetimes • Market Aggregation • Innovation • Expanding Supply Chain • Acquisition=Integration • New service delivery • Process Visibility
  10. 10. Customer Relationship Management Sales and Marketing Production Planning Manufacturing Inventory & Logistics Finance & HR SFA Product LMS Inv MGMT B2B Enterprise Infrastructure Services (Portal, SOA, IDRS, LDAP, EAI, E-mail, IT Operations) product SCM product DB ERPCRM Organizational Units Real-World Business Processes span organizations, systems, and applications. ERP MES What is the Problem? Processes Product Configuration Order Management Warranty & Returns Management
  11. 11. People and Systems Work Differently How People Work • Creative • Never the same • Ad-hoc • Collaborative • Adaptable • Shades of Grey How Systems Work • Transactional • Standardized • Programmed • Processes • Rigid • Black or White
  12. 12. Business Process Management (BPM) Goals Process BPM is a structured approach employing methods, policies, metrics, management practices and software tools to manage and continuously optimize an organization's activities and processes. BPM promotes operational excellence by bringing together people, systems, information, and business policies Strategy Policies Compliance Systems People Information 12
  13. 13. Order Management Process Enterprise Infrastructure Services (Portal, SOA, LDAP, EAI, E-mail, IT Operations) Customer Relationship Management Sales and Marketing Production Planning Manufacturing Inventory & Logistics Finance & HR SFA Prodict LMS Inv MGMT B2Bproduct ERP. SCM producti nfo. MES DB ERPCRM BPM models, simulates, executes, manages, monitors, & optimizes those Business Processes. BPM Solution – Across Apps, Functions and People Customer Relationship Management Sales and Marketing Production Planning Manufacturing Inventory & Logistics Finance & HR SFA Product LMS Inv MGMT B2B Enterprise Infrastructure Services (Portal, SOA, LDAP, EAI, E-mail, IT Operations) product ERP SCM product MES DB ERPCRM Organizational Units Real-World Business Processes span organizations, systems, and applications. Product Configuration Order Management Warranty & Returns Management Processes
  14. 14. EfficiencyVisibility Agility BPM Value Proposition MetricsResults Utilization, capacity Throughput, speed Quality, yield, exceptions Ease of access to data Freshness of data Accuracy of data Speed to create & change processes Time to market Reduced Cost Improved productivity/ROI Effective resource utilization Better quality of service Managed, lower risk Compliance Financial accountability Lower capital reserves Better visibility New revenue growth Market share growth Increased competitiveness Thought leadership 14
  15. 15. Process development and systems integration Process Developer Business dashboards and historical & trend analysis tools Business Owner Process execution and management Process modeling, simulation and documentation Business Analyst Enterprise applications and databases Business User Interaction Process Participants BPM : Framework for Business Optimization 15 BPM Lifecycle Monitor Optimize Business Implement Deploy Execute Model Simulate
  16. 16. BPM ROI Drivers Source: Survey over 200 Oracle customers worldwide, November 2007. Respondents can choose up to 3 answers.
  17. 17. Front end Applications Biz Processes / Workflows Service Orchestration Implementation Services Business Services (“Composite”) Applications Packaged/Legacy /Custom  BPM provides a great abstraction for building business systems  SOA provides the platform that bridges the business processes and operational resources  BPM optimizes the use of SOA across core business processes that impact business objectives BPM increases the business value of SOA BPM SOA
  18. 18. BPM Maturity and Adoption Model - Evaluate Your Position, Create a Vision, Assess Your CSFs, Determine Your Focus 0 1 2 3 4 5 Acknowledge Operational Inefficiencies Intraprocess Automation and Control Interprocess Automation and Control Enterprise Valuation Control Agile Business Structure Process- Aware Generally, where we are today Directly link process model and rules to execution Compare alternatives driven by various optimization techniques in real time Craft process automation and control across the enterprise, customers and trading partners Create a business performance framework that dynamically links the valuation of the business to process execution Innovate new businesses, products and services through an agile business structure Model and analyze business processes Measure and monitor business activities Identify process owners Integrate activity-based accounting with process steps Establish process governance Realign process with market strategy Goal-driven processes Source: Michael Melenovsky. Gartner Expo – Sydney - Nov 2006
  19. 19. Oracle’s Middleware Solutions for Manufacturing
  20. 20. Manufacturing Messaging for Manufacturing SOA Enables Smart Innovation i.e. Adaptive to business changes with faster development cycles , lower costs and less risks SOA enables a cost effective , flexible and efficient IT foundation that promotes faster development and lower maintenance costs through reusable services SOA enables organizations to respond quickly to new customer requirements, competition and changing market conditions by responsive Business-IT alignment • Drive consistent customer interactions via integrated service channels • Optimally schedule resources, manage spare parts, and deploy field personnel to reduce overall service costs • Uniform experience across channels by delivering consistent quality & service for improve efficiency Sy • Improve demand mgmt with consensus-based forecasts • Reduce cycle time / waste and optimize inventory via single, holistic production plan • Streamline operations and outsource portions of the company that are not a key capability. • Reduce time to market of new products & services • Improve retention through analytics & align products with customer needs • Personalization of products to fit their needs and are expecting faster deliveries of these product. • Make relationship profitability as primary growth • Customers are finding more options for suppliers. Decreasing prices are a result of this globalization and increased competition. Cheannel Operational Efficiencyl Inventory Optimization NewProduct Introduction Customer Centricity Customer Centricity Channel Operational Efficiencies t Inventory Optimization New Product Introduction
  21. 21. Channel Operational Inefficiencies Partnering Processes Channel Marketing Dealers Alliances Service Contractors Partner Certifications Partner Program Mgmt Collaborative Selling Partner Recruitment, Registration, and Profiling Joint Business Planning Joint Marketing / MDF Opportunity Mgmt Service Management eCommerce / Order Mgmt Performance Mgmt / Analytics Training Sales Tools & Collateral Incentive Compensation Inconsistent business processes Homegrown systems & portals Poor alignment with partners Channel Executive Resellers Brand Owner Channel Roles Partners Channel Sales Channel Operations Channel Service Franchisees Developers Distributors
  22. 22. BP • Oracle BPM Suite is used to streamline client accounts payable interaction and approval process • Automatically assigns invoice to appropriate approvers • Enables approval notification e-mails to curb cost reductions • Provides a self-service Web portal for 3,000 primary vendors • Automate and process accounts payable for over 30,000 non-recurring transactions • 2,500 AP approvers in numerous time zones provide user support and handle exceptions for over 10,000 vendors • Streamline the hodgepodge of invoicing systems and approval processes Opportunities & Challenges • Increased turnaround, data accuracy and consistency, audit trails and quality assurance • Cost per transaction reduced by 80%, realized ROI of 300% over two years • Maximized cash flow and reduced personnel costs • Eliminated data re-entry and reduced processing bottlenecks Results Solution Powered by Oracle BPM Suite
  23. 23. BPM polls Oracle DB (FileNET representation) for new invoices After performing validation and business logic, BPM assigns invoice to one of over 2,500 approvers and where appropriate, sends email with a “1 click” approval button Approver can email “1 click” approvals or change account info, forward, etc in the Work Portal Approval notification emails are sent to the approver for where BPM approved the invoice without human intervention Exceptions are handled by 30 “super users” Paper Invoices are routed for manual coding in FileNET 1,000 Invoices are mailed, faxed and sent via EDI to the Tulsa Processing Center each day FileNET Approved invoices are posted to SAP for payment Up to 3,000 vendors have self service web portal access • Modify Vendor Record • Conduct Payment Inquiry • Submit Electronic Invoice Aging reports are generated and accessible on demand via the Work Portal Accounts Payable Approval Process
  24. 24. The Babcock & Wilcox Company • B&W deployed their new sales application using the Oracle BPM Suite • IT and the sales force worked together to model the actual best practice sales processes • By combining BPM and collaboration, the sales force can quickly receive input from the numerous parties involved throughout the various steps in the complex sales process. • The sales application leverages many of the existing resources currently available in the MyB&W portal • B&W supplies more than 40% of the coal fired capacity in the U.S. • B&W’s sales cycles vary greatly in length of time and complexity of the projects • Off the shelf CRM systems were incapable of supporting the organization’s highly specialized and geographically dispersed sales force • B&W desired to implement a sales application to enforce best practices across sales processes • New Sales Application replaced existing Lotus Notes environment freeing up IT resources. • Improved collaboration provides more accurate pricing, increasing revenue • Increased up-selling and cross-selling opportunities “Business owners can request a change to the process and test the actual process in moments.” John Gerstenslager, Portal Solutions Manager Results Opportunities & Challenges The Oracle BPM Suite Solution
  25. 25. DC 1 / Customer Consignment DC 2 Region 1 Region 2 Retail Stores Suppliers Finished Goods Contract Mfgrs Raw Materials Region 3 Region 4 Retail Stores In-Transit In-Transit • Determine inventory levels across the entire supply chain – Stores, including Customer Consignment – DCs and Warehouses – In-Transit – Suppliers • Coordinate inventory policies to reduce inventory while guaranteeing a desired service level Inventory Optimisation required - Reduce Inventory Across the Supply Chain
  26. 26. Run plan Demand ‘cereal’ Supply forecast Consensus forecast Run plan Forecast ‘sugar’ Supply commit ‘packaging’ Supply commit ‘sugar’ Forecast ‘packaging’ VMI HubVMI HubVMI Hub Visibility SuppliersCustomer Contract MfgrsYou • Extend Visibility to All Tiers - Communicate requirements to all contract manufacturers & suppliers - React Faster to Supplier Constraints - Get visibility to supplier capacity - Reallocate materials - Make alternate sourcing decisions • Reduce Obsolescence - Understand impact of changes to your contract manufacturer or supplier • Reduce Non-value Added Costs & Exception Overload - User-configurable exceptions - Automated exception handling via workflow Trading partner collaboration in a Multi-Tier Supply Chain Needed
  27. 27. Pratt & Whitney • Oracle BPM Suite manages engine maintenance process worldwide 24/7 • Allows for better preventative maintenance – avoiding higher-cost repairs • Eliminates extensive paperwork, manual effort and tracking • Allow for real-time updates and comprehensive fleet-wide status tracking • Better manage inventory on engine repair and overhaul • Automate tracking of engine maintenance milestones • Bridge engineering, support, operations and finance to ensure better customer support and satisfaction Opportunities & Challenges • Better visibility into preventative repairs • Reduced errors on tracking and manual input • Cost avoidance savings – engine performance monitoring saves per event • Allows for fleet-wide issue tracking – ID bad parts or processes holistically • Customer satisfaction – over 100% increase in satisfaction score Results Solution Powered by Oracle BPM Suite
  28. 28. Customer Enters Request for Service Order Oracle BPM Automatically runs Process Tech reviews Job Ticket Work is performedJob completion notification sent Invoice Process begins Customer Delighted Increased Cash Flow BPM Vision – Gold Level Value
  29. 29. New Product Introduction Process Flexibility Unix Linux HostedWindows Applicants HR Staffers Management New Product Introduction B2B Gateway Customer DB Forecasting System CM’s Excel Portal Item Master Promote Slow Painful Error- prone $$$
  30. 30. B2B Gateway Customer DB Forecasting System CM’s Excel Portal Item Mst Promote Oracle Fusion MIddleware New Product Introduction Applications are standardised as Web services Middleware orchestrates pieces into a new application Applicants HR Staffers Management Unix Linux HostedWindows Fast Simple Accurate Low $$$ New Product Introduction leveraging BPM
  31. 31. POSCO Steel - Korea • POSCO is the most profitable steel maker in the world today steel production of over 30 million tons equating US$19Bil in revenue. • In 1998 transformed from state-owned company to a privatized customer-centric company. • Six Sigma has been the driving force in executing on this dramatic transformation. • Phase I re-architected all enterprise processes including all sales, purchasing, and financials in order to become more customer-centric. All key processes are integrated and streamlined in Oracle’s e-Business Suite. • The second phase re-architected core Manufacturing Execution System (MES), from traditional mainframe to Oracle J2EE on Linux.
  32. 32. Sample Metrics • Took 700 developers, architects and testers requiring 24,000 total person/months. This is one of the largest J2EE application in the world. • Processes 9 million transactions per day. • Built on 100% open-standard Oracle Application Server and Oracle Database to ensure 24x365 operation and 3-second maximum response time under all conditions.
  33. 33. MES Complexity
  34. 34. 81 plants, 2 locations, 1 integrated MES
  35. 35. SUMCO – Silicon Wafer Mnf • Sumitomo Mitsubishi Silicon Corporation (SUMCO) is the world’s second largest silicon wafer manufacturer • Key Biz Applications: SAP & Brooks Automation Manufacturing Execution System • Business Intelligence/ Reporting is key in the complex manufacturing world (Statistical Process Control, Six Sigma!) • Oracle Discoverer + Portal used for centralised plant-level reporting, integrated with SAP Business Warehouse • BPEL projects for Six Sigma quality processes and managing customer requests for product modifications, leveraging SAP Adapter to integrate Oracle BPEL with SAP • Point to point integration using IONA CORBA was too complex • Integration processes require human operator involvement
  36. 36. Sample Metrics • At SUMCO BPEL automates • QA (Quality Assurance) by firing processes to resolve problems that originate during the manufacturing. • Specifications Registration: Managing customer requests for product modifications. • Processes are complex due to • Six Sigma requirements • Numerous Human intervention • Need to create Dynamic processes on the fly. • High volume integration needs (2M records per day with AS 400 system)
  37. 37. SUMCO’s Architecture Order Submission / Engineering Documents Enterprise Resource Planning Manufacturing Execution Systems Document Management Operations / Manufacturing Diagnostics Pack Adapters Oracle Business Intelligence Wafer Manufacturing Process Application Server
  38. 38. Complex Six Sigma Process
  39. 39. reduced inventory by 25% saved $5.3M in one year through improved efficiency improved business application user productivity by 10% reduced financial reporting time by 50% increased inventory turns via improved line sequencing “In the past, we were lucky if we learned one month later how many tires of each type we had sold. With Oracle the quality of information has reached a completely new level. We retrieve all sales information from the data warehouse the next day, right down to individual customers and product details.” -- Rami Helminen, Financial Director Sammitr Motors What Manufacturing Customers are Achieving…
  40. 40. reduced new product development time by 63% reduced inventory cost by $26M reduced procurement costs by 14% reduced purchase order processing time by 86% decreased order entry costs by 40% reduced order processing time by 83% reduced WIP order volume by over 30% increased inventory location accuracy to 98% What Manufacturing Customers are Achieving…
  41. 41. • Key Takeaway
  42. 42. Vendor-Centric Model Customer-Centric Model Homogeneity • Organizing principle: Vendor lock-in Oracle Complete, Open & Integrated • Organizing Principle: IT as a source of business innovation Oracle’s Vision / Business Model
  43. 43. Business Unit Driven I Internally Focused Externally Focused Cost Focused Extended & Cross- Functional Integration Value Driven Processes II III IV Revenue Focused Complete….. Integrate & Consolidate Core Functions Profitable GrowthMargins Source: AMR Research 2007 Current ERP Centric Vendors
  44. 44. Open BEPL RBAC
  45. 45. … and Integrated • Integrated business processes (SOA) • Integrated user interface (Web 2.0) • Integrated business intelligence