1. 12th ECR Asia Pacific Conference
Value Chain Stratagem – Going beyond traditional boundaries
Vijaykumar Kusurkar
Senior Director, SCM Applications, Asia Pacific
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product direction. It is intended for information
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contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
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The development, release, and timing of any
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© 2006 Oracle Corporation – Proprietary and Confidential

2. Lessons Learned From The Last Downturn
What Winners in Last Recession Did Right
Set priorities based on VALUE
creation
• Focus: strategic cost management
AND value creation
Leveraged TECHNOLOGY
• Invested in systems to gain &
manage insight on value drivers
Collaborated with customers to
develop NEW products
• Developed new products, services
uniquely suited to downturn
Note: Winners outperformed others in industry 6 years following
SHAPED demand through pricing for
1990-91 recession. Losers are those that underperformed others in profitability
the industry. -- Source: Accenture
• Shaped demand to gain market
share and profits
Business Environment & Supply Chain Management
A Time of
Change and
Innovation.

3. Changing Information Needs
Pressures Shaping
• Retailers’ information advantage Consumer Products IT
• Consumer buying behaviors and
interactions
• Global expansion and emerging
markets
• Synchronization across value chain
participants
• Need for agile IT response
Paradigm Shift in Information Flow
Current State Future State
Consumers Consumers Retailers
Retailers
Distributors Suppliers
Distributors Suppliers
Marketing Information Marketing Planning/
Analytics Analytics
Product Human Product
Human
Management Transactional Resources Management
Information Resources
Processing
Platform
Platform
Innovation Planning Innovation Transaction
Processing
Finance Finance

4. From Automation To Differentiation
Knowledge - Sales & Operations Planning
Based, - Network Centric Product
- New Product Development Innovation
Collaborative & Launch
- Demand Sensing & Shaping
- Distributed Order Management
- Collaborative Supply Execution
- Personalized Customer
- Supplier Development
Service
Process - Forecasting
Complexity
- Account Management (SFA) - Channel Management
- Order Entry - AR - E-Commerce
- AP - Customer Self Service
- Employee Tracking
- Employee Self Service
Automation - Basic Accounting
- EDI / VMI
Based,
Transactional
Internal External,
Process Reach Universal
From Automation To Differentiation
Knowledge - Sales & Operations Planning
Based, - Network Centric Product
Collaborative Differentiated Business
- New Product Development
& Launch
Innovation
Processes & Shaping
- Demand Sensing
- Distributed Order Management
(20% of IT Collaborative Supply Execution
- Budget)
- Personalized Customer
- Supplier Development
Service
Process - Forecasting
Complexity
- Account Management (SFA) - Channel Management
- E-Commerce
Commodity Business
- Order Entry - AR
- AP
Processes
- Employee Tracking
- Customer Self Service
(80% of IT Budget) - Employee Self Service
Automation - Basic Accounting
- EDI / VMI
Based,
Transactional
Internal External,
Process Reach Universal

5. TODAY’S REALITY
Demand Volatility and Uncertainty
“We are experiencing
significant swings in
demand--complicating
demand and supply
planning and visibility
across the value
chain”
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.
TODAY’S REALITY
Supply Chain Complexity
“We are always very
slow to react to
change, instead of
being able to
anticipate and
respond quickly.”

6. TODAY’S REALITY
Accelerating Cost-effective Innovation
“How can I innovate
faster than my
competition with my
products and supply
chains getting more and
more complex?”
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.
TODAY’S REALITY “We constantly struggle
Alignment between Demand,
with multiple disparate,
Supply, Product departmental data sources
and a lack of a holistic
planning process. This is
negatively affecting our
competiveness and
profitability.”
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.

7. Today’s Value Chains need new Planning Approaches
Planning strategies that you should focus on today
DEMAND VOLATILITY SENSE DEMAND MORE QUICKLY
and UNCERTAINTY and SHAPE FOR REV GROWTH
SUPPLY CHAIN DEVELOP RISK MITIGATION
COMPLEXITY and RISK and POSTPONEMENT STRATEGIES
LACK OF RESPONSIVENESS IMPROVE AGILITY and QUICKLY
TO SUDDEN PROBLEMS RESPOND TO EVENTS
BUSINESS INSIGHT and CONTINOUSLY MONITOR
CONTINUOUS IMPROVEMENT VALUE CHAIN PERFORMANCE
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.
Value Chain Planning
Modular – Craw, walk, run: start with your most important problem first
FORECAST TO PLAN
Planning Production
Analytics Scheduling
Risk
Trade Management Collaboration
Management and Network and VMI
Design
Demand Sales and Supply and
Signal Operations Distribution
Management Planning Planning
Service
Demand Inventory
Parts
Management Postponement
Planning
Global Order
Promising
Common
MIDDLE MIOBIEE
RDBMS COLL SOA SECURITY OBIEE WFL Planning
WARE
Server
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.

8. Value Chain Planning
Complete – Best in class products support best in class processes
SALES AND OPERATIONS PLANNING COMPREHENSIVE TRADE MANAGEMENT
STRATEGIC PLANNING and RISK MGMT INTEGRATED PLANNING and EXECUTION
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.
Value Chain Planning
Integrated with Oracle – Open to non-Oracle systems
AIA
AIA AIA
AIA AIA
AIA
Legacy
Systems
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.

9. Oracle Value Chain Planning
Enables leading edge and transformational business processes …
Predict
Shape Monitor and Manage
Align
17
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.
Predict market requirements and manage risk
Translate real-time demand visibility to profitable market strategies
• Sense demand closer to the
point of consumption with real-
time visibility to demand events
Demand Signal
Management
• Improve forecast accuracy
Risk Demand
Management
through advanced analytics
Management
and consensus forecasting
• Predict impact of supply chain
risk to your network
• Account for variability in your
inventory positioning and
postponement strategy
18
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.

10. Sense demand closer to point of consumption
Retail Store Data DEMAND SIGNAL REPOSITORY
• POS sales
Non-Oracle Applications
SOA-Based Integration
INTEGRATE
RESPOND
ANALYZE
CAPTURE
• Price
MANAGE
• Store inventory TRADE PROMOTION PLANNING & OPT
• Promotional plans
• Store replen. rules
• Store forecasts SALES & OPERATIONS PLANNING
• Data sources centrally cleansed,
Retail DC/ harmonized and aggregated SUPPLY & DISTRIBUTION PLANNING
Distributor Data • Pre-built dashboards and reports
• DC shipments • Powerful BI capabilities
• DC inventory PRODUCT LIFECYCLE MANAGEMENT
• DC replen. rules
• “Sense & Respond” event mgmt
Other DEMANTRA TRADE PLANNING
External Data Pre-Built Integration
• Retail loyalty DEMANTRA SALES & OPERATIONS PLN
• IRI/AC Nielsen DEMANTRA DEMAND MANAGEMENT
• 3rd party demographic
• Causal (weather,etc.) ORACLE SUPPLY & DISTRIBUTION PLN
• RFID/EPC ORACLE PRODUCT LIFECYCLE MGT
• IMS, NDC, EDI (867,
ORACLE RETAIL
852), Scripts, Pedigree
• Unstructured text
• More timely data to better sense, shape and respond to demand
• Reduced manual effort and cost
• Consistent data more easily leveraged across teams and applications
19
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.
Drive to consensus demand more effectively
Improve forecast accuracy through advanced analytics and collaboration
• Move from a regimented periodic to a
continuous demand planning process
– Continuous collaboration across sales, marketing, finance, supply
chain and customers
– Each participant gets tailored view – configurable work sheets
– Comprehensive audit trail of changes
– Consensus based on inputs and weightings from groups
• Leverage advanced analytics to more
accurately predict demand
– High precision statistical forecasting, no statistical background
required – Superior Bayesian-Markov analytics
– Use any combination of quantitative or qualitative data to
establish your base line forecast
– Forecast based on attributes and characteristics
• Get quickly to an improved and realistic
consensus number
– Collaborate with internal and external constituents
– Use multi-dimensional analysis to adjust, allocate, and rollup
– Workflow driven forecasting exceptions ensures responsiveness
20
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.

11. Oracle Value Chain Planning
Enables leading edge and transformational business processes …
Predict
Shape Monitor and Manage
Align
21
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.
Shape demand for profitability
Balance demand and supply fluctuations
• Shape demand via promotions
planning
• Manage new product introductions
and marketing to maximize revenue
S&OP
Trade
• Maximize sales and improve
Promotion
Management execution by balancing demand and
Supply and
Distribution supply in a continuous S&OP
Planning
process
22
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.

12. Shape with integrated promotion planning
Understand the financial and operational impacts of sales incentives
Demantra Predictive Trade Planning and Optimization • Synchronizes sales, marketing, and supply
chain
– Develop integrated strategies to adjust demand to
available supply
– Implement profitable sales and marketing strategies that
are feasible for supply chain to execute and check
availability of material and capacity to satisfy promotion
demand
– Leverage excess capacity to influence demand
• Predict the impact of marketing programs
– Decompose lift to understand halo effects,
cannibalization, and consumer stock piling
• Simulate volume and profitability of future
promotions
– Optimize promotional events based on goals and
constraints - profit, revenue, units, budget, timing, margin
– Perform what-if analysis to understand the impact of
varying promotional tactics
23
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.
Oracle Value Chain Planning
Enables leading edge and transformational business processes …
Predict
Shape Monitor and Manage
Align
24
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.

13. Align operational plans with corporate goals
Execute to plan
OperationPlan and Monitor – Sales and s Plan
Plan and Monitor – Tactical and Operational Plans
DISTRIBUTE MAKE BUY SERVICE
Collaborate
• Plan your extended value chain with holistic supply and distribution planning
• Improve demand fulfillment through real-time order promising
• Improve production throughput through plant-level scheduling and monitoring
• Improve supply chain visibility and align trading partners via collaboration
• Transform your service operations to profit centers
25
Copyright © 2010, Oracle and/or its affiliates. All rights reserved.
The Best-In-Class Companies Outperform Other
Players Through Higher Focus on S&OP
METRIC PERFORMANCE
Performance Summary:
Customer service levels (on-
time and complete to the
• Best-in-class companies
customer’s request date) 50% 81% 91% 97% 100% have greater focus on
S&OP
Average forecast accuracy at • Key S&OP metrics
the product family level tracked by companies
50% 60% 74% 86% 100%
on a regular basis are:
Average cash conversion – Return on net assets
cycle (days) – Customer service
180 120 60 15 0 levels
– Cash conversion
Return on Net Assets cycle
(RONA) 20%
-10% -5% 5% 15% – Gross margin
– Demand forecast
Gross Margin accuracy
20% 30% 40% 55% 60%
KEY: Laggards Industry Average Best In Class
Note: Best-in-Class = top 20% of performers; Industry Average = middle 50%, and Laggards = bottom 30% of performers.
Source: Aberdeen Research, Sales & Operations Planning: Aligning Business Goals with Supply Chain Tactics; June, 2008. Results
based on survey responses from over 300 companies across four manufacturing industries: process, consumer, discrete, high tech /
electronics.

14. Today’s Integrated Planning Systems
Email and Excel
Financial Planning
Financial Planning
Long-Term
Long-Term Financial
Financial Working
Working
Treasury
Treasury Profitability
Profitability Performance
Performance
Financial
Financial Planning &
Planning & Capital
Capital
Management
Management Management
Management Scorecards
Scorecards
Planning
Planning Budgeting
Budgeting Planning
Planning
Human
Human Product
Product
Demand
Demand Customer
Customer Supply
Supply Logistics
Logistics
Resources
Resources Performance
Performance
Management
Management Management
Management Planning Planning
Planning Planning
Planning
Planning Management
Management
Functional Operational Planning
Functional Operational Planning
Financials Human Resources CRM SCM Manufacturing
Better Approach
Real time, continuous and collaborative Sales and Operations Planning process
• Replace disconnected processes
Product Demand Supply Finance
– Move off of standalone Excel
– Stop manual “integration” by email
• Minimally, start with traditional
S&OP process implementation
Product Demand Supply Finance
– Demand and supply balancing
– Data integration
• Better: move to continuous, event-
Demand
Trade
Supply
driven S&OP
S&OP
Risk
– Manage by exception, proactive alerts
Design
– Optimized what-if scenarios
Finance
– Forward looking analytics
Event-driven Sales and Operations Planning
– Unified platform: integrated data and process

15. Start quickly – Progress at your own pace
Evolve to a best-practice Sales and Operations Planning process
Network optimization and
design
Promotion optimization
Risk Management
Inventory Optimization
Product life cycle management
Demand shaping
Demand and supply balancing
Workflow driven exceptions
Promotion planning
Financial planning
Eliminate Single consensus demand number
spreadsheets
Pre-defined S&OP analysis worksheets
Demand and supply review
Financial review
Personal dashboards
Key takeaways
• It is time for change and just ERP based IT
infrastructure that merely automates process is not
enough
• Demand driven value chains that
– Sense and Predict Demand Closer to point of Consumption
– Shape Demand for Profitability
– Align Operational Plans and Corporate Goals
– Have built in forward-looking analytics so executives can
quickly understand and make informed decisions
– Provide integrated system that enforces executive S&OP
decisions at operational planning level