<Insert Picture Here>

Alvon Cheng
Sr. Applications Sales Consultant
SCM Production Solutions

Key trends in the Service industry

Significant amounts of money tied up in spares inventories

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

Initiatives to reduce inventories while simultaneously improving service responsiveness

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

Service supply chain

Must manage both forward and reverse material flows

Customers

Supplier
(Repair)

Repaired

Service
technicians

Regional DCs

Central DC

In repair

Supplier
(New Buy)

On-hand

Consigned

Repair depot
Material flow of good spares
Material flow of defective spares

Unique planning challenges

Service Supply Chain Design
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

Replenishment and Redistribution Planning

Returns: part condition

Dynamic reallocation and repositioning
Generate new buy, repair, transshipments
replenishment orders with workflow based
approvals
End-of-life buys

Parts Forecasting

High volume of part-location combinations

Criticality
Intermittent demand patterns
Part supersession
Returns forecasting
New product introductions

Monitor and Control - Visibility and Collaboration

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

Typical 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

How
Delivers

Oracles Service Parts Management solution

Performance driven service management

Call Center
Management
Service
Contracts

Finance

Order
Management

Performance
Management
Advanced
Forecasting

Network
Design

VMI

Inventory
Optimization
Warehouse
Management

Field
Service

Supplier
Collaboration

Depot
Repair

Order
Promising

Procurement
Asset Management

CMRO

Single source of truth

Completely integrated
SOA enabled

Oracle Value Chain Planning solution

Complete  Open  Integrated  Modular

SERVICE
PARTS
PLANNING

Demand Signal
Management

Order
Promising

Plant
Scheduling and
Monitoring

Risk
Management

Demand
Management

Performance
Management
Sales and
Operations
Planning

Collaboration and
Vendor Managed
Inventory

Trade Promotion
Management
Supply and Distribution
Planning

Single source of truth

Integrated with ERP
SOA enabled

Oracle Service Parts Planning

Key capabilities

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)

Oracles Service Parts Planning solution

Transform your service operations from cost to profit centers
 Simultaneously forecast, replenish and redistribute your service
parts 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

10

Simultaneously forecast and replenish

Single planning process and UI for highest productivity and faster analysis

Service Parts Planning

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

SPARE PARTS FORECASTING

Support intermittent demand patterns

Leverage highly accurate Bayesian engine
Population and failure rate based
forecasting
Composite forecasting
Forecasting based on supersession

SPARE PARTS REPLENISHMENT PLANNING

Plan internal and external repair

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

11

Simultaneously forecast and replenish

Single planning process and UI for highest productivity and fasters analysis

Items, Failure Rates,

Supersession Chain

Worksheet
Preferences

Supply-Demand
Forecast

Comments

Graphs

Exceptions

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Improve planner productivity

Configurable work lists and personal queries

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

13

Oracles Service Parts Planning solution

Transform your service operations from cost to profit centers
 Simultaneously forecast, replenish and redistribute your service
parts 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

14

More accurately forecast service parts

Key service-specific forecasting capabilities

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

15

Intermittent, seasonal and fast moving demand

Demantra Bayesian statistical engine inside for highest forecast accuracy
Intermittent demand Printer Heads

Support for key forecasting methods

JFMAMJJASONDJFMAMJ
Seasonal Demand Air Conditioning Parts

MAMJJASONDJFMAMJJA

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

16

Global and local level forecasting

Determine optimal fulfillment source

Region East

Region West

Region South

Orders and
Forecast

Orders and
Forecast

Shipments

Shipments
Insufficient
Availability

Forecast at different levels

Global
Zone
Org

Dynamic
Allocation

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

Required Available

17

Oracles Service Parts Planning solution

Enabling profitable reverse logistics at higher service levels
 Simultaneously forecast, replenish and redistribute your service
parts 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

18

Optimize replenishment and redistribution

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

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

19

Model key service constraints

Accurately model you service supply chain characteristics

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

20

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

21

Out-of-the-box integration with Execution

Eliminate cost of integration and improve planner productivity via automation

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

22

Oracles Service Parts Planning solution

Transform your service operations from cost to profit centers
 Simultaneously forecast, replenish and redistribute your service
parts 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

23

Oracles Service Parts Planning solution

Extend from traditional service parts planning to best business processes

Performance
Management
Network
Design

Advanced
Forecasting

VMI

Inventory
Optimization
Supplier
Collaboration

Order
Promising

Single source of truth

Completely integrated
SOA enabled

24

Enable additional business processes

Leverage additional key capabilities provided by Oracle Value Chain Planning

Spare Parts Forecast (Highest Rev)

COLLABORATIVE PLANNING

DEMANTRA DEMAND MANAGEMENT

Advanced forecasting methods

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

Manage spare parts at cust. locations

Get visibility to new buy supplier capacity
Provide visibility to shipments of defects

Order Forecast

SERVICE PARTS PLANNING

Spare Parts Forecast (Highest Rev)

and Demand Variability (optional)

New buy supplier capacity

Forecasting

Replenishment and
Redistribution

INVENTORY OPTIMIZATION

Verify ability to uptake new SLAs

Determine inventory budget required for SLAs
Optimally deploy inventory to meet SLAs
Analyze inventory policy recommendations

Forecast and
Demand Variability

Time-phased Safety Stock Levels

25

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

26

Enable stocking level optimization via

Oracle Inventory Optimization
SERVICE PARTS PLANNING
Forecasting

Replenishment and
Redistribution

INVENTORY OPTIMIZATION

Verify ability to uptake new SLAs

Determine inventory budget required for SLAs
Optimally deploy inventory to meet SLAs
Analyze inventory policy recommendations

Forecast and Demand Variability

Time-phased Safety Stock Levels

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

27

Multi-echelon inventory policy planning

Reduce inventory costs by determining the right time phased safety stock levels
Customers
Supplier
(Repair)

Repaired
Service
technicians

Regional DCs

In repair

Central DC

Supplier

ESL

(New Buy)

Repair depot

On-hand

Consigned

Postpone 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

28

Multi-echelon inventory policy planning

Postponement
analysis

Time-phased
stocking levels

Profitability
analysis

Budget
analysis

29

Collaborate with suppliers

Provide and receive advance visibility to orders and commits
PARTS
SUPPLIER

YOU

Consensus
forecast

Order forecast
batteries

Run plan

Projected
shipments of
defectives
Supply commit
batteries

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

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Promise parts availability, globally

Accurate global part availability information for field service technicians

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

31

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Architecture

32

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

APS INSTANCE
ERP

Legacy

UI

COLLECTIONS

Collections

CANONICAL
DATA MODEL

Plan Run

EMBEDDED
ANALYTICS

PLANS

OBIEE

Release

Algorithms
(LPs, Heuristics)

WEB SERVICES

33

Pre-built integrations to ERP

ERP
Value Chain Planning
Items, new buy and repair lead times, repair yields,
part condition
Calendars, calendar exceptions, work day patterns

Global and local demand schedules (DEM DM)

Categories, category sets; UOMs, UOM class conversions

Installed base, field service usage and depot usage history

Time phased safety stocks (IO)

Part availability (GOP)

Order forecasts and supply commits (CP)

SERVICE
PARTS
PLANNING

Supersession and repair-to item relationships

Organizations, shipping networks, subinventories, location
associations, shipping methods
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
Planners, unit of measures, UOM class conversions

34

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Summary

35

Oracles Service Parts Management solution

Comprehensive and integrated

Call Center
Management
Service
Contracts

Finance

Order
Management

Performance
Management
Advanced
Forecasting

Network
Design

VMI

Inventory
Optimization
Warehouse
Management

Field
Service

Supplier
Collaboration

Depot
Repair

Order
Promising

Procurement
Asset Management

CMRO

Single source of truth

Completely integrated
SOA enabled

36

Oracle Service Parts Planning

Key capabilities

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)

37

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

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

38

Q&A

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

39

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