key trends in the service industry

Alvon Cheng Sr. Applications Sales ConsultantSCM Production Solutions

2 Significant amounts of money tied up in spares inventories Initiatives to reduce inventories while simultaneously improving service responsiveness

Service is becoming a main profit driver even in manufacturing companies Desire to move from cost center to profit center

Service is a competitive differentiator Better customer retention While many finished goods have been commoditized Increased flexibility in service level agreements

Interplay between parts planning and execution increasingly becoming important Global service supply chain visibility and supplier collaboration

Key trends in the Service industry

3Service supply chain

Regional DCsServicetechnicians

Central DC

Repair depot

Customers

Supplier (Repair)

Supplier (New Buy)

On-hand Consigned

Repaired In repair

Material flow of good sparesMaterial flow of defective spares

Must manage both forward and reverse material flows

4Unique planning challenges

Replenishment and Redistribution Planning Monitor and Control - Visibility and Collaboration

Service Supply Chain Design Parts Forecasting

Consider service level agreements (SLAs) Locate field stocking locations Demand and lead time variability Multi-echelon postponement and multi-indenture

determination of stock levels Budget constraints Product introduction and end of life scenarios Optimize sourcing for new buy and repair

Returns: part condition Dynamic reallocation and repositioning Generate new buy, repair, transshipments

replenishment orders with workflow based approvals

End-of-life buys

High volume of part-location combinations Criticality Intermittent demand patterns Part supersession Returns forecasting New product introductions

Share order plans and shipment plans for defectives with suppliers

Visibility to supplier capacity and shortages Repair status and consigned at suppliers Consigned and new buy at new buy suppliers Replenish customer location spare parts stock

5Typical benefits of an integrated system

Reduce inventory investment up to 60% Reduce service response missed up to 90% Reduce obsolescence and write-offs due to end-of-life Reduce same-day inventory requirements Reduce expediting cost Reduce customer repeat calls and technician visits Improve planner productivity Minimize backorders during product launches Permanently reduce cost of system integrations

6How

Delivers

7Oracles Service Parts Management solution

AdvancedForecasting

InventoryOptimization

VMI

NetworkDesign

Call CenterManagement

ServiceContracts

Depot Repair

Field Service

WarehouseManagement

Asset Management

OrderPromising

Order Management

Procurement

SupplierCollaboration

Finance

Single source of truth Completely integrated SOA enabled

CMRO

PerformanceManagement

Performance driven service management

8Oracle Value Chain Planning solution

Demand SignalManagement

DemandManagement

Collaboration andVendor Managed

Inventory

PlantScheduling and

Monitoring

OrderPromising

SERVICE PARTS

PLANNING

Trade PromotionManagement

Supply and DistributionPlanning

RiskManagement

Sales and OperationsPlanning


Single source of truth Integrated with ERP SOA enabled

Complete Open Integrated Modular

9Oracle Service Parts Planning

Simultaneously forecast, replenish and redistribute your service parts across your service supply chain

More accurately forecast your service parts

Demantra statistical forecasting engine inside for highest accuracy

Account for intermittent, seasonal, and fast moving demand patterns

Consider supersession Forecast spares demand for new products

Enable advanced forecasting, supplier collaboration, and inventory optimization

Manage targeted service levels, representing SLAs, and budgets (via IO)

Manage service contract customer demand (via DM) Collaborate with new buy and repair vendors (via CP)

Key capabilities

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Oracles Service Parts Planning solutionTransform your service operations from cost to profit centers

Simultaneously forecast, replenish and redistribute your serviceparts across your service supply chain

More accurately forecast your service parts Optimize the replenishment and redistribution of parts across the

extended service network, integrated with Service Execution Enable supplier collaboration, inventory optimization, and

advanced forecasting processes

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Service Parts Planning

SPARE PARTS REPLENISHMENT PLANNINGSPARE PARTS FORECASTING Support intermittent demand patterns Leverage highly accurate Bayesian engine Population and failure rate based

forecasting Composite forecasting Forecasting based on supersession

Plan internal and external repair Plan reallocation and transfer of parts Plan new buy orders Analyze and fix exceptions Release planning recommendations to Execution

SERVICE PLANNER WORKBENCH Single UI for forecasting and replenishment Part and supersession chain centric analysis Planner work lists Personal and public queries Comments Auto-release rules

Simultaneously forecast and replenishSingle planning process and UI for highest productivity and faster analysis

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Simultaneously forecast and replenish

Comments Exceptions

Supply-DemandForecast

WorksheetPreferences

Graphs

Items, Failure Rates, Supersession Chain

Single planning process and UI for highest productivity and fasters analysis

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Improve planner productivity

Planners have complete control over their analysis workflow

Define one or more work lists with prioritization

Define unlimited item, supply-demand, exception, and supplier queries

Quickly drill down from work list or query to summary, to detailed level

Planners can automatically execute their preferred query upon starting their work

Query results are retained between analysis sessions (refreshed when plans are rerun)

Collaborate between planners Share work lists and queries for public use

Configurable work lists and personal queries

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More accurately forecast service parts

Accurately statistically forecast the complex demand patterns found in service parts

Key forecast methods specific to service part demand patterns Data transformations for intermittent or sporadic patterns Expert mode: automatically select best blended statistical method for every service part

Forecast for service parts without adequate shipment history Forecast based on composite of shipments, usages, returns, failure rates, and

product population

Forecast for changing replacement parts and revisions Forecast entire supersession chain and chain history of multiple revisions

Scale to handle large volumes of parts Selectively re-forecast: use specific forecast methods, parameters, and forecasting

frequency as needed based on criticality

Key service-specific forecasting capabilities

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Support for key forecasting methods Moving average Single exponential smoothing Holt Integrated causal exponential model (Winters

enhanced) Regression with seasonal causal Crostons for intermittent Regression with seasonal causal for intermittent Multiplicative Monte Carlo regression with seasonal

causal for intermittent Use 100+ advanced parameters for fine tuning

Baysian weighted forecasting - blend multiple forecast methods instead of picking one method

Manual forecast override

J F M A M J J A S O N D J F M A M J

Intermittent demand Printer Heads

M A M J J A S O N D J F M A M J J A

Seasonal Demand Air Conditioning Parts

Intermittent, seasonal and fast moving demandDemantra Bayesian statistical engine inside for highest forecast accuracy

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Global and local level forecasting

Forecast at different levels Global Zone Org

Postpone fulfillment decision to supply planning

Check availability before specifying shipping location

Dynamically consume and manage forecasts inline, based on where demand originates

Forecast without reference to shipping facilities

Region East Region West Region South

Orders andForecast

Orders and Forecast

Required Available R A

Shipments Shipments

DynamicAllocation

InsufficientAvailability

Determine optimal fulfillment source

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Oracles Service Parts Planning solutionEnabling profitable reverse logistics at higher service levels





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Optimize replenishment and redistribution

Consider key service planning constraints Part supersession, condition, and criticality Sourcing of repair-at, return-to, buy-from, transfer-from Purchasing, repair, transportation lead times Supplier capacity (for new buy)

Minimize inventory and purchasing cost, and out-of-stock impacts

Dynamically reallocate and reposition parts Replenish to optimized safety stock levels Use up superseded parts; repair before new buy

Out-of-the-box integration with Execution Release recommendations for new buy, repair, and

transfers

Operate a more profitable Service chain by saving inventory & purchasing costs

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Model key service constraints

Model how your supply chain changes over time

Time phased sourcing rules Include sources such as Transfer From,

Repair At, Return To, Make At, and Buy From

Use unlimited assignment sets for what-if sourcing scenarios

Rebalancing between organizations (circular sourcing)

Use different ship methods w/ diff lead times attached to sourcing rule

Flexible assignment of sourcing rules minimizes setup maintenance

Accurately model you service supply chain characteristics

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Minimize inventory and purchasing cost, and out-of-stock impacts

Service-specific business logic

Repair before new buy Consider returns supply Use up superseded parts

Dynamically reallocate and reposition parts

Replenish to optimized safety stock levels

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Out-of-the-box integration with Execution

Global parts inventory visibility across all service organizations

Out-of-the-box integration with Oracle Spares Management and Oracle Depot Repair

Release depot repair orders, reschedules, and transfers

Release spares management new buy purchase orders, repair orders, and transfers

Improve planner productivity through automation of release

Create auto-release rules and attach to plans

Eliminate cost of integration and improve planner productivity via automation

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Oracles Service Parts Planning solution

AdvancedForecasting


VMI

NetworkDesign

OrderPromisingSupplier

Collaboration



Extend from traditional service parts planning to best business processes

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Enable additional business processes

DEMANTRA DEMAND MANAGEMENT

INVENTORY OPTIMIZATION

SERVICE PARTS PLANNING

Forecast and Demand Variability

Time-phased Safety Stock Levels

Verify ability to uptake new SLAs Determine inventory budget required for SLAs Optimally deploy inventory to meet SLAs Analyze inventory policy recommendations

Advanced forecasting methods Forecast at additional levels (customer, ) Forecast leveraging causal factors Forecast new product introductions

Replenishment andRedistribution

Forecasting

Spare Parts Forecast (Highest Rev)

Spare Parts Forecast (Highest Rev)and Demand Variability (optional)

COLLABORATIVE PLANNING Manage spare parts at cust. locations Get visibility to new buy supplier capacity Provide visibility to shipments of defects

New buy supplier capacityOrder Forecast

Leverage additional key capabilities provided by Oracle Value Chain Planning

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Enable advanced forecasting processes with Demantra Demand Management

Forecast new service level agreements at customer and customer site level

Forecast new parts based on part characteristics

Enable simultaneous forecasting of end items and spare parts

Separate demand management organization

Consider causal factors

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Enable stocking level optimization via Oracle Inventory Optimization

INVENTORY OPTIMIZATION

SERVICE PARTS PLANNING

Forecast and Demand Variability

Time-phased Safety Stock Levels

Verify ability to uptake new SLAs Determine inventory budget required for SLAs Optimally deploy inventory to meet SLAs Analyze inventory policy recommendations

Replenishment andRedistribution

Forecasting

Inventory Optimization seamlessly plugs into service parts planning Inventory Optimization enables advanced capabilities to validate feasibility of new

service level agreements and inventory policy recommendations

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Multi-echelon inventory policy planning

Regional DCsService

technicians Central DC

Repair depotPostpone inventory

Move inventory away from the customer Pull model driven off the point of postponement Synchronize inventory levels and policies across the supply chain Account for demand, supply, and lead time variability

ESL

Customers

Supplier (Repair)

Supplier (New Buy)

On-hand Consigned

Repaired In repair

Reduce inventory costs by determining the right time phased safety stock levels

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Multi-echelon inventory policy planning

Profitabilityanalysis

Postponementanalysis

Time-phasedstocking levels

Budgetanalysis

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Reduce shortages and improve supplier delivery performance

Get visibility to your suppliers constraints View exceptions against supplier capacity Give repair suppliers advance visibility to

repair orders and shipments of defectives

Run plan

Supply commitbatteries

Order forecast batteries

Consensusforecast

YOU PARTSSUPPLIER

Collaborate with suppliers

Projected shipments of

defectives

Provide and receive advance visibility to orders and commits

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Promise parts availability, globally

Provide best promise date based on:

Material availability Transportation lead times Ship methods

Global visibility All field stocking locations All warehouses

Consider supersession Consider alternate parts across an

entire supersession chain Based on seeded integration to

Spares Management

Accurate global part availability information for field service technicians

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Architecture

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Architecture

OBIEE

ERP

Legacy

APS INSTANCE

CANONICALDATA MODEL

PLANS

Algorithms (LPs, Heuristics)

Collections Plan Run Release

WEB SERVICES

COLLECTIONS

UI EMBEDDED ANALYTICS

Deploy integrated with Oracle or stand-alone with non-Oracle systems

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Pre-built integrations to ERP

SERVICEPARTS

PLANNING

Items, new buy and repair lead times, repair yields, part condition

Calendars, calendar exceptions, work day patterns Categories, category sets; UOMs, UOM class conversions

Installed base, field service usage and depot usage history

Organizations, shipping networks, subinventories, location associations, shipping methods

Supersession and repair-to item relationships

Sourcing

Purchase order supplies, requisition supplies, supplier capacities, supplier flex fences, item suppliers

Safety stocks, sales order demands, reservations, on-hand, In-transit supplies

Internal and external repair order supplies and demands

Global and local demand schedules (DEM DM)

Time phased safety stocks (IO)

Part availability (GOP)

Order forecasts and supply commits (CP)

ERPValue Chain Planning

Planners, unit of measures, UOM class conversions

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Summary

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Oracles Service Parts Management solution

AdvancedForecasting


VMI

NetworkDesign

Call CenterManagement

ServiceContracts

Depot Repair

Field Service

WarehouseManagement

Asset Management

OrderPromising

Order Management

Procurement

SupplierCollaboration

Finance


CMRO


Comprehensive and integrated

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Oracle Service Parts Planning

Simultaneously forecast, replenish and redistribute your service parts across your service supply chain

More accurately forecast your service parts Demantra statistical forecasting engine inside for highest

accuracy Account for intermittent, seasonal, and fast moving demand

patterns Consider supersession Forecast spares demand for new products

Optimize the replenishment and redistribution of parts across the extended service network, integrated with Service Execution

Enable advanced forecasting, supplier collaboration, and inventory optimization

Manage targeted service levels, representing SLAs, and budgets (via IO)

Manage service contract customer demand (via Dem DM) Collaborate with new buy and repair vendors (via CP)

Key capabilities

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Complete support for key service business processes

Delivers significant value Reduces planning cycle time by planning your entire service chain and automating routine decisions Provides planners the key information necessary to make better decisions faster Provides the foundation to enable best-in-class business processes

Progress at your own pace, evolve gradually

Key takeawaysHigh value transition to a best-in-class service parts planning solution

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Q U E S T I O N SA N S W E R S

Q&A

key trends in the service industry

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