During Quest Forum Digital Event: Cloud Week, Tom McDonough, Senior Director of Product Marketing for Supply Chain Planning, Collaboration, and Visibility at Oracle, presented Integrated Business Planning and Execution (IBPX) as a key component for digital transformation. He discussed views on the present day’s market for enterprise planning, responses to the market through connected enterprise planning, and an Integrated Business Planning and Execution (IBPX) overview. Additionally, McDonough communicated Oracle’s approach to emerging tech, customer journeys to the cloud, and customer success stories.
Today’s Market
For views on today’s market, McDonough referenced a study by Bane & Company, which charts the vulnerability of supply chains in supply chain risk exposure. The chart is displayed below. The dark grey bar which stretches from the bottom left corner to the top right attempts to portray low risk.
Many are beginning to wonder if supply chains are too lean and how that affects profitability. Flexibility in the network helps companies adjust quickly in times of stress. They also help production teams pivot nimbly to meet changing market demand, which can be a significant competitive edge.
The Bane study found that companies with resilient supply chains grow faster because they have the ability to respond rapidly when market demand shifts. Sample benefits of investing in flexibility include:
- Increased perfect order rates from 20% to 40%
- Increased customer satisfaction by as much as 30%
- Improved cash flow in part through 10% to 40% in inventory terms
Responding to the Market through Enterprise Planning
Leading companies reduce disruption by building buffers throughout the supply network, investing to improve planning and execution process inoperability. In addition to the risk and pressures associated with the current pandemic, supply chains were already facing many pressures, as detailed below:
Leading company areas of investment include:
- Network Agility – Reacting quickly to disruption requires a flexible ecosystem of suppliers and partners that can handle sudden shortfalls or even produce new products
- Alternative manufacturing sites and assembly nodes
- Making the most of Industry 4.0 tools to optimize cost
- Improve visibility across the network and accelerate reaction times
- Real-Time Network Visibility – Control tower solutions that integrate data across the entire supply chain, 5G technology, and blockchain offer leadership teams real-time visibility. Companies can better calibrate supply with forecast demand by comparing internal production capacity data with real-time demand signals such as weather data
- Digital Collaboration – Cloud-based supply chain applications and collaborative platforms and tools enhance information sharing. They also improve the quality and speed of decision-making with an organization and with suppliers and other external partners in a secure environment.
- Rapid Generation of Insights – That means harnessing highly integrated planning and 3execution systems which can provide rapid and accurate insights. Today’s solutions include machine learning and predictive and prescriptive analytics.
Faster and more flexible execution requires better planning. So how good is your connected enterprise planning?
Integrated Business Planning and Execution (IBPX) Overview
Planning is prolific. It happens across the business in all functions. Historically, a lot of these are niche solutions with differing software. They are usually not concurrent. However, advances in software and technology are opening the door to truly connected enterprise planning. Integrated business planning solutions have historically addressed the cross-over points between Finance and Operations— supply chain in particular. As technologies evolve in support of end-to-end visibility and collaboration, compute power, 24/7/365 global persistent data and analytics. Planners are using advances in all of these areas to make better decisions faster. This includes expanding the integrated aspects of planning to incorporate decisions into multiple execution systems and to provide access to execution data to company planning decision-makers.
There are statistics stating over 50 percent of companies are still using spreadsheets for planning. These can be highly intricate and disconnected. They are exchanged by emails and then require custom or costly integration— manual steps either way. It is difficult to obtain insights or make decisions. Some of the companies who operate in this manner are only able to gain insights through this process, missing timely execution updates, which are the basis for many of the benefits highlighted in the study by Bane.
In short, there are at least four significant business challenges facing businesses operating under outdated spreadsheet approaches:
- Long planning cycles
- Manual processes
- Disconnected planning processes
- Inefficient use of resources
The Oracle Cloud for Supply Chain Planning and Enterprise Performance Management Finance have key features which will address these challenges and more. Long planning cycles are being reduced through provisional tools for scenario modeling and “What if?” planning.
Bringing financials and operations planning together to ease translations and understanding between dollars and items, the Oracle Cloud also offers unified user interfaces pre-built integrations, and data models for ease of use and flexibility. By reducing the number of systems required to support decision-making, manual processes to match or convert numbers can disappear, freeing up planners to devote time to the scenario, “What if?” planning, or trouble-shooting.
The end result for Oracle Cloud planning customers is a more efficient use of resources, as they receive better results, faster.
Oracle provides a planning advisor feature to guide your ability to resolve problems. An end-to-end sharing model is greater than sharing forecasts and supply plans. The plan needs to manage unique supply chain characteristics for each business. Connected planning makes it easier to incorporate the financial perspective, driving significant changes to execute the plan. Finally, emerging tech like machine learning and IoT are changing the ways we approach and resolve problems.
Visually, there are distinct planning and execution workflows, but the solution tools allow both supply chain and financial planners to work together in the planning phase and to come together in execution as required. The evolution here is that planning and execution cycles don’t have specific timeframes. Engaging to improve is based on when things happen versus when the meeting is on the calendar. Knowing sooner and acting faster leads to better results.
Integrating plans at the speed of business isn’t the challenge. It’s actually understanding and adapting. The technology to do so is IBPX.
Integrated business planning and execution (IBPX) by Oracle is a closed-loop process for improved planning and execution.
Extended integrated business planning in this presentation is focused on sales and operations planning, including financial planning. These tools can be used to focus on different optimization goals.
Enterprise Performance Management for financial planners includes scenario planning, which takes advantage of Monte Carlo or Winter simulations to provide the financial perspective on supply chain objectives. Similarly, material-focused supply chain demand managers can leverage the same capabilities for their demand planning.
Changes to plan parameters are a reality. The Oracle Cloud for planning gives planners immediate notification to be able to react accordingly. Event detection and performance management includes a dashboard that highlights areas of focus for planners. Use of IoT is available, as are automated predictions from actuals.
Emerging Technology
With regard to emerging tech, Oracle provides a very flexible set of tools. Some are out-of-the-box. Others are completely configurable. It is your journey. Oracle wants to provide you with the options to choose the right approach for you.
Multiple facets of intelligence in supply chain planning are displayed below.
Customer Journeys to the Cloud
Hundreds of live customers across Oracle have taken unique journeys to the Cloud. The options available are listed below:
A huge part of this process is integration. Oracle has a wide range of tools for anything from uploading CSV-based files to ADF, Excel, Web and REST services, etc. Integrated analytics of OTBI, BIP, and OAC are available for custom report generation. Oracle also supports a wide range of messaging frameworks for increased collaboration across trade partners.
Customer Success Stories
A sample chart of customers using Oracle Supply Chain Planning Cloud is displayed below:
Juniper Networks is a company involved in providing communication equipment to data centers. They “exist to solve the world’s most difficult problems in networking technology.” They focus on bringing simplicity to networking with product solutions and services that connect the world.
Juniper has been working with Oracle for two years in the area of integrated business processes. Their results speak volumes:
- Improved lead time attainment by 25% from the baseline
- 26% reduction in inventory cost in the first two years
- Return-on-Investment to reach over 350% in three years
LiDestri is a family-owned consumer goods manufacturer. They manufacture and distribute iconic brands. Their integrated system produced the following results:
- Up to 10% reduction in inventory costs
- Up to 50% reduction in food disposals
- Self-claimed the largest consumer of tomatoes in the U.S— the reduction in food disposal is a major savings of goods and money
LiDestri was able to collaborate with suppliers on a daily basis, sharing forecasts, looking at execution data from suppliers, looking at the data on the cloud. The biggest benefit the company referenced was that their largest retail partner had provided forecasts for decades. Within 18 months of the new system running, LiDestri was able to show their retail partner that they were forecasting with better results. That retailer and soon others ended up outsourcing their forecasting to LiDestri.
Cleveland Golf experienced an 81.5 percent improvement in on-time shipments through their IBPX. Cloud-based planning operations allowed for increased speed and communication of demand changes. They were better able to complete fulfillment requirements.
Each of these companies are great references for implementing IBPX to improve their business.
Key Takeaways
The ability to integrate planning systems for more insights and better, faster, more informed decisions is incredible. As mentioned earlier, the time of the meeting is not necessarily the time to realize there are issues with the plan. The technology currently exists to integrate planning and execution information and to monitor execution for variances from the plan, providing notifications to the planner so that adaptions can be made. To take the next step for your business, speak with an Oracle rep to schedule a discovery session of IBPX today.