Oracle Demantra Overview & Utilization in a Demand Driven Supply Network

Curtis Ardle

February 22, 2008

Emerging Solutions

• Myself

• Emerging Solutions– Founded 1997– Headquarter in Chicago– Office in Minneapolis– Oracle EBS Practice– PeopleSoft– Hyperion– 100% Reference-able Client List

Agenda

• Demand Driven Supply Chain Network– What is it?– Benefits– Best Practices

• Oracle Demantra– Demand Driven Adaptive Planning– Key Capabilities– Applications w/in Suite

• Conclusion

What is Demand Driven?

• It essentially is a supply chain driven by your customers.• It means running your company on more real time information.• Fundamental shift on how to do business.• Linking supply with demand with products.

SUPPLY

PRODUCT

DEMAND

Benefits Recognized

• For Your Company

• For Your Shareholders (w/ 10% improvement on perfect orders)

15% Less

Inventory

35% Shorter Cash to

Cash

17%Stronger

OrderFulfillmen

t

Gain2.5%

Profits

Gain5%

ROA

Gain$.50 EPS

*AMR Research: Hofman, Debra, “Mastering Supply Chain Excellence”

Best Practices

• Collaborate Internally & Externally

• Use Your Data

• Use Intelligence, not just Algorithms

• Establish and Execute S&OP

• Focus on Process First

Collaborate Internallyand Externally

Marketing

Sales

SCM

Finance

Use Your Data

Sales HistoryNational

Weather Service

Syndicated Data

Consumer Demographics

RFID

POS

•Promotion response

•Account for demographics

•Reduce latency, dampening

VMI

•Exception handling

Use Intelligence

Algorithms can never replace intelligence.

S&OP Management Meeting

Demand Meeting-Consensus forecast-Causal factors

Marketing / Sales Meeting-Product mix changes-Promotions-Sales quotas-Customer collaboration

Supply Meeting- Production plan-Inventory plan-Supplier collaboration

Balance supply and demand

Synchronize all operational plans

Sales & OperationsPlanning

Finance & Budgeting

Process Excellence

Systems can increase visibility

Good processes capitalize

on this visibility

What It Means- Demand Visibility

• Sensing– Utilize granular data– Know and utilize causal factors and product

attributes

• Shaping– Optimize promotion effectiveness

• Response– Validate business plans– S&OP to synchronize company

Forecast-Driven Planning

Predictive - use formulas and history to forecast demand

Uses “buffers” to absorb demand shocks

Expensive use of working capital

Oracle DemantraDemand Driven Planning

Demand-Driven Planning

Demand Sensing: Uses demand signals to plan and manage supply

Demand Shaping: Uses strategies and information to shape demand

Demand Response: Fulfillment based on customer requirements

Advanced Planning Solution

Best in Class Processes

Integrated Planning

Network Design

Demand Sensing / Shaping Postponement

OptimizationSupply

PlanningPromise,

Distribute, Replenish Worksheets,

Workbenches, Workflow

SC Risk Management

Demand Driven

NetworkS & OP

Operational Excellence

Internal & External

Collaboration

Role Based

Demantra Modules

• Demand Management

• Advanced Forecasting and Demand Modeling

• Real Time Sales & Operations Planning

• Trade Promotion Optimization

• Predictive Trade Planning

• Deduction & Settlement Management

Demand Management

• Core Application• Statistical Forecasting

– 9 Models– 23 Causal factors

• Attribute Based Forecasting– Analyze and group by

attributes– Business rules for product

level modeling

• Manage at any Level– Time– Product– Location

• New Product Introduction• Assumption Planning

– Supports qualitative forecasting

– Current & past assumptions modeled

• Shape modeling– Use comparable products– Generate and align to

demand

• Editing, Reporting, Analysis, Collaboration, Events & Exceptions

Advanced Forecasting and Demand Modeling

• Statistical Forecasting– Additional 6 models, – Unlimited causal factors

• Compute & Display – Live read-write capability– Individual causal contribution – Cross-correlations

• New Product Introduction

• Base & Lift Decomposition

Real-Time S&OP

• Worksheets & Workflows– Collaborative planning

• Balance Supply & Demand– All demand in one place– Plan across orgs with real-time data

• Synchronize– Assimilate Sales, Finance, Marketing and

Supply Chain– Ability to monitor variability– Measure performance and drive accountability

Predictive Trade Planning

• Define Promotions

• Compute Lift, Halo, & Cannibalization

• Scenario Evaluation

• Promotion Effectiveness Engine

• Base & Lift Decomposition

• Trade Planning Worksheets

Trade Promotion Optimization

• Optimum Promotions to Maximize ROI– Measure / Predict Lift, Cannibalization, Pantry

Loading– Automates promotion analysis– Run promotion scenarios and recommend best

promotions to run– Integrates with overall single demand plan

Deduction & Settlement Management

• Reconcile Deductions and Payments– Supports key methods– Smart matching– Auto matching

• Ease Administrative Burden

What It Means - Demantra

• Demantra in A Demand Driven Network– Collaborate Internally & Externally– Use Your Data– Use Intelligence, not just Algorithms– Establish and Execute S&OP– Focus on Process First

Demand Visibility

Demantra - Demand Driven

Sensing Shaping Responding

•Support Multiple Demand Sources

•Flexible Data Models

•Granular Visibility

•Support VMI & CPFR

•Bayesian Markov

•Mixed Model Forecasting

•Support Causal Factors

•Optimize Promotions

•Bottom Up, Top Down, Middle Out

•Attributes & Characteristics

•Chaining and Shape Modeling

•Collaboration

•Exception Handling

•Workflows and Worksheets

Questions?Questions?

Thank YouThank You