Value Chain Planning: Oracle’s Strategy, Update, and Roadmap

2. Value Chain Planning:Oracle’s Strategy, Update, and Roadmap July 2013 Alvon Cheng

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4. Oracle Value Chain Planning Introduction and Update • Value Chain Planning In-Memory Applications • Directions ProgramAgenda

5. Oracle Value Chain Planning Introduction and Update

6. New Reality drives Value Chain Transformation Old planning paradigms and systems do not work anymore Faster product cycles Fewer people Outsourcing Value chains have expanded globally Lead Times Global Competition Increased risk Reduced inventory CHANGE Less capacity Demand Volatility Instantly Connected Less IT spending Increased demand and supply variability, and dependency on contract manufacturers More choices Instantly Connected Increased risk Reduced inventory Less capacity Increased Innovation Faster product cycles

7. Oracle Value Chain Planning enables implementation of new strategies to address the new business challenges CHALLENGES STRATEGIES • Demand volatility and uncertainty as a result of fluctuating economic conditions and segmentation • Lack of responsiveness to sudden supply chain problems • Increasing supply chain complexity and risk • Lack of business insight and need for continuous improvement • Sense demand more quickly and shape for revenue growth • Improve agility and quickly respond to events • Incorporate risk and postponement strategies in the Sales and Operations Planning process • Continuously monitor value chain performance

8. Value Chain Planning Oracle Value Chain Planning Solution Service Parts Planning Demand Management ADAPT Global Order Promising* PREDICT ALIGN Trade Promotions Planning & Optimization SCENARIO MANAGEMENT Network Design, Risk Mgmt, Postponement Production Scheduling Planning Analytics Sales & OperationsPlanning • Common foundation • Single source of truth • Centralized services • Start anywhere, redo nothing • * Planned for future release • ** Not integrated with JDE Procurement Collaborative Planning &VMI** Supply & Distribution Planning Event-driven Simulation

9. Oracle Value Chain Planning – Modular Focus on your most important problem first, evolve to best in class process Forecast to Plan Rapid Planning Event Driven Simulation Risk Management Production Scheduling Inventory Optimization Supply Planning VMI Sales and Operations Planning Network Design Collaborative Planning Service Parts Planning Demand Management Distribution Planning Global Order Promising Trade Management Planning Analytics Demand Signal Management User Roles Workflow • Common foundation • Single source of truth • Centralized services • Start anywhere, redo nothing Oracle Database Web Services Collections Menus WLS Security

10. Oracle Value Chain Planning – Integrated Reduce TCO against Oracle and non-Oracle systems • Single source of truth for data • Open APIs and mappings • Centralized services

11. Oracle Value Chain Planning – Proven • Many successful customers in all sizes across all industries DISCRETE MANUFACTURING PROCESS MANUFACTURING HIGH TECHNOLOGY CONSUMER GOODS and DISTRIBUTION

12. Value Chain Planning For Profitable Growth Align Predict Adapt • Develop profit-optimized supply, inventory plans • Profitably respond to demand and supply changes in real-time • Balance requirements of many customers and channels with supply constraints • Synchronize financial and operational plans • Achieve network-wide collaboration including MRO supply chain • Continuously monitor forward-looking performance to take timely correction actions and fine tune operational execution • Harvest insights from multiple demand signals and create accurate forecast • Understand profit structure and segment value chain • Plan revenue and profitability of new product introductions and promotions

13. Predict Demand More Effectively Demantra Demand Management and Advanced Forecasting Analyze Demand Changes Create Statistical Forecast Sense Multiple Demand Signals Collaborate Internally and With Trading Partners Measure Forecast Accuracy Improve and Approve Forecast

14. Predict Promotion Demand More Effectively Demantra Predictive Trade Planning Tell me the best tactics to maximize profit Predict my promotion lift Is my lift cannibalizing another product? Show me all my past and planned promotions What promotion lift did I get? What’s my overall promotion calendar for the account?

15. Adapt Operating Plan to Demand Changeswith Demantra Real Time S&OP Impact to Performance Identify Constraints and Optimum Solution Plan vs. Actuals Balance Demand, Supply, and Budget Plan Capacity Create Consensus Plan

16. Adapt Supply Chain to Business Performance Interactive APCC, Rapid Planning, and ASCP What is the tactical impact of my strategic decisions? How is my business performing? Do I have shipment container quantity Can I rapidly simulate to meet strategic objectives? Are price break minimums met? Can I export results to MS Excel?

17. Align Enterprise by Seamlessly Moving from Problem to Resolution Impact to Plan Impact to Production and Inventory NPI Pipeline Review Adjust Launch to Fill Gap Simulate Possible Solutions Align operational plan

18. Align Enterprise by Integrated Business Planning with APCC How does the alternate scenario compare with the current plan? How am I doing with respect to demand, supply, financial and overall performance? Show me budget variances by Sales product category What is the team schedule for getting ready for this month’s IBP Review meetings? What are the components and trade-offs of my cost KPIs?

19. Oracle Value Chain Planning Roadmap • Supply Planning • UI, user productivity enhancements in ASCP • Enhanced order analysis in Rapid Planning and integration to ASCP • Demand and Promotions Planning • Demand Signal Repository enhancements • Demantra support for excel and hyperlinks • Promotions planning UI enhancements • Solaris 10g support for forecasting engine • Promotions calendar and indirect effects • Planning Performance Management • OBIEE 11g and iPad support • APCC driven ASCP tactical planning • Warehouse capacity analysis (from IO) • Inventory Optimization • Warehouse and storage capacity constraints • Support for cycle stock to reduce inventory • Service Parts Planning reserve SS • Asset Intensive / Maintenance Planning • Supply Planning • ASCP enhs. for Process & Life Sciences • Rapid Planning enhs. for Discrete Mfg. • Demand and Promotions Planning • In-Memory Consumption-Driven Planning • Promotions funds optimization • Planning Performance Management • In-Memory Performance-Driven Planning • Performance and Customer-driven enhs • Distribution planning performance measures • Demantra custom measures, prod hierarchy • Inventory Optimization • Service level targets at category level • UI enhancements and simulation from APCC • S&OP and IBP • S&OP cost simulation w/ SNO • Week-month calendar roll-up • JDE E1 Order promising and CTO support • Supply Planning • ASCP, Rapid Planning, SNO enhs • Project driven supply chain enhancements • Production Sched. synchronous make-pack • Demand and Promotions Planning • Demantra usability and performance enhs. • Promotions Planning enhancements • Planning Performance Management • Promotion planning analytics enhancements • Asset maintenance planning analytics • Projects driven supply chain plan analytics • S&OP & IBP • Integrated business planning enhancements • Oracle Fusion Value Chain Planning • Planning Central • Sales & Operations Planning • Demand Management • Supply Planning • GOP Enhancements 2012 - R12.1.3.7 & 12.1.3.8, Demantra 7.3.1.3 & 7.3.1.4 2013 - R12.1.3.9, R12.2.2 , R12.2.3, Demantra 7.3.1.5 Future DirectionsPost 12 month planning cycle

20. Value Chain PlanningRecent Enhancements

21. Service and Asset Maintenance Solution ASSET INTENSIVE DISTRIBUTION CENTRIC REPAIR CENTRIC • Maintain, repair, and overhaul complex equipment and installations • Repair work order hierarchies • Rotables and serialization • Long range and operational planning • CMRO and EAM based execution • ASCP • Demand Management and Production Scheduling • Multi-echelon distribution with rebalancing and fair share allocation • Standard catalog driven parts, no part condition; standard bills • Standard work orders for assembly, new buy orders • Forecasting and replenishment, with optionally inventory optimization • ASCP (Distribution Planning) • Demand Management and Inventory Optimization • Use part condition (“usable”, “defective”) • Internal and external repair • Part criticality matrix linked to forecasting rules • Optimize redistribution and replenishment • Account for supersession (repair to) in forecasting and replenishment • Unified forecasting and replenishment UI • Release recommendations to Depot Repair and Spares Management • Service Parts Planning New in 12.1.3.7

22. Improved Inventory Optimization • Reduce Inventory Investment • Support for cycle stock – reduced safety stock • Determine SS levels with respect to warehouse capacity or storage type capacity – improve accuracy and feasibility of inventory targets, reducing total inventory investment • Publish additional measures to APCC to reflect available and required warehouse capacity Optimize inventory considering total warehouse capacity or the storage capacities of different storage types within the warehouse 22

23. Rapid Planning Order Analysis • “Sales Order Comparison” tab now “Order Comparison” • View all changed purchase orders and work orders • Improved order search and filtering • Easier analysis of all changes required per what-if scenario • New performance metrics for order comparison • Total Supply Quantity and Planned Order Quantity • Make Planned Order Quantity, Transfer Planned Order Quantity, Buy Planned Order Quantity • Work Order Quantity • Purchase Orders and Purchase Requisitions Quantity • Internal Purchase Orders and Internal Requisitions Quantity • Total Demand Quantity, Forecast Quantity, and Sales Order Quantity • Improved simulation insight

24. Improved Support for Mobility • The disconnected worker • OBIEE 11g upgrade mandatory • Improved performance • Improved usability • Direct connect via iPad, iPhone (Android in future) • Demantra Anywhere 7.3.1.4 iPad support

25. ASCP Improved User Interface • Improved usability • Improved screens through ADF • Note: requires license of WLS-EE • New: improved editing of material plan • New: improved editing of resource requirements • New: improved editing of item simulation sets • New: improved editing of order details and release • Optionally embed screens in Adv. Planning Command Center • Single place for aggregate and detailed plan analysis and comparison • Run plans directly from APCC • Release orders directly from APCC

26. Demantra Improved User Interface • Improved usability • Updated color scheme, frames, and borders • Updated graphics • Updated icons • Level methods on the toolbar • Drag and drop levels and series

27. Value Chain PlanningIn-Memory Applications

28. Oracle In-Memory Applications Business Critical Applications run 10-20 times faster • Business critical applications and workflows often take hours or days to execute • Financial Close, Cost Management, Projections, Planning • Oracle In-Memory Applications leverage DRAM and Flash memories to run 10-20 times faster • Transforms batch processes to real time • Changes business dynamics • Quickly discover growth opportunities • Make smarter decisions • Reduce corporate costs • Accelerate time-consuming workflows

29. VCP In-Memory Applications • Key Drivers • Supply Chain Planning has changed • Shrinking planning cycle, more simulations • Multiple supply chains together • Exploding data volumes • Global operations, longer plan horizons • More frequent changes • Real-time data visualization • Ad-hoc query capabilities • Mobile devices – Low latency UI • Large global customers with multiple business units – multiple supply chains and growing • Planners need more interactive simulation and analysis • ~10Tb transactions (Item x Location x time) for large implementations Present Need Past US Planners waiting More Time for Planners ETL Asia Planners Off the system Run Plan More Time for Planners Release & Collections

30. Two New VCP In-Memory Applications Multi-node, high availability, high performance VCP Applications Forecast Node Forecast Node Supply Plan Node Supply Plan Node New New Models Models Models Models Consumption Driven Planning Performance Driven Planning • Transformational Change • Current approaches have fundamental limitations • Batch processes moving large datasets • ETL process between planning and analytics Solution • One system, optimized for high-performance and delivered as pre-configured OVM • Engineered to specifically exploit capabilities of Engineered Systems and deliver performance and functionality not possible on other platforms DSR Demantra Fast Updates, Snapshot & Archival Output Stream Output Stream Output Stream Output Stream Input Stream Input Stream Input Stream Input Stream ASCP IO RP … Cost of DiskIOs of FlashSpeed of DRAM Planning Server (Data Store) Exadata

31. 1. Oracle In-Memory Consumption-Driven Planning Store-level replenishment planning • Utilize daily store-level consumption data to create time-phased sell-in forecast and store replenishment plan • Scalability for store, daily, intra-day planning • Consumption-driven and traditional DC-level demand management in single system BUSINESS VALUE • Manage business at store level • Maximize on-shelf availability • Solution Overview Store-level forecasting

32. 2. Oracle In-Memory Performance-Driven Planning • Dramatically accelerate collection of data, population of Planning Data Store, and analysis of metrics to reduce overall planning cycle time • Generate multiple supply chain plan simulations in parallel • Advanced visualizations and analysis BUSINESS VALUE • Improve financial and operational performance through closed loop, forward-looking insight • Lower total cost of ownership • Solution Overview Near real-time comparison of plan scenarios in business context

33. Value Chain PlanningComing Soon

34. Customer-Driven Enhancements to ASCP Critical path analysis for late demand in EDD plans similar to ECC plans • Increase Productivity • Enhancements for Life Sciences industry - Minimum Remaining Shelf Life for forecast • Enhanced late demand analysis in EDD to focus on the root cause for demand lateness • Post-processing LT for make orders • Independent collections and planning for multiple planning instances

35. Customer-Driven Enhancements to Rapid Planning Fixed days supply • Increase Productivity • Improved sourcing rules: Honor sourcing allocation to meet contractual order commits to suppliers • Improved flexibility for supply order generation using fixed days supply • Improved RP – ASCP integration: additional automation & richness in copying ASCP plan data to RP, visibility to RP simulation sets in ASCP Enforce sourcing split

36. Inventory Optimization Enhancements • Improved usability • Improved ADF screens (similar to ASCP in 12.1.3.8) optionally accessed from APCC • New: Improved editing of item simulation sets and IO parameters (Demand fulfillment LT, budgets, storage constraints) • Create multiple simulations from APCC spanning a range of objectives • Service level targets at aggregate levels –e.g. Product Category ‘Run Experiment’ simulations

37. Trade Promotion Calendar Optimization • Optimize promotional calendars using the advanced promotion optimization engine – Eliminate guesswork • Specify total budget, range of products, range of accounts, calendar time, and other constraints • Optimizer creates promotion calendar and chooses best products and tactics, and timing of promotions • Optimize promotion spend 37

38. Sales & Operations Planning Enhancements • Enhanced Integration between S&OP and Strategic Network Optimization to enable detailed cost trade-offs – Transportation, Storage, Purchasing, and Manufacturing costs • Analyze weekly data in calendar months • Import data directly from excel to a compatible worksheet • Improved cost simulation 38

39. WHY! VALUE CHAIN PLANNING COMPLETE – BEST IN CLASS SOLUTION + High degree of investment and innovation MODULAR – CRAWL, WALK, RUN INTEGRATED – DESIGN TO WORK TOGETHER OPEN – WORKS WITH ERP & OTHER SYSTEMS

40. VALUE CHAIN TRANSFORMATION ROI BENEFITS Sense and Shape Demand for Revenue Growth Greater Agility to respond to Change Hedge against Risk minimizing cost Align corporate goals and operations planning Monitor supply chain performance to Goals Collaborate with trading partners for Accuratesupply chain Data Higher customer Service Levels, lower inventory Globalization & Standardizationof processes • $2B cash from operations • 38% reduction in Inventory • 100% increase in Inventory Turns • 38% increase in Forecast Accuracy • 76% decrease in Planning Cycle Time • 12% increase in Service Levels