Project driven supply chain in complex MRO services Oracle e-business suite
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1 Global Sponsor Project driven supply chain in complex MRO services Oracle e-business suite Session: CON11132 Date: Monday, September 29 Time: 11:45 a.m. - 12:30 p.m. Venue: Intercontinental Intercontinental B
2 Speakers Rick Katz Director Deloitte Consulting LLP Phone: Mohan Dhandapani Manager Deloitte Consulting LLP Phone: (W) Subrata Roy Director Deloitte Consulting LLP Phone: (W) Over 15 years of experience at Deloitte in managing large complex, global projects with experience in Oracle ERP implementations, PMO design and Supply Chain Business Process Transformation. Over 15 years of combined Industry and Oracle experience specializing in business process re-engineering and supply chain. Lead architect for major SCM roll outs in US, Canada, Europe, Middle East and Mexico Over 18 years of experience in process design and deployment of Oracle based Supply Chain solutions. Primary focus has been in the Project driven supply chain across various industry sectors. 2 Copyright 2014 Deloitte Development LLC. All rights reserved.
3 Contents Background 4 Solution 7 Case Studies 9 Benefits 12 3 Copyright 2014 Deloitte Development LLC. All rights reserved.
4 Background Project based work is on the rise Estimates suggest that 65% of the work being done in modern organizations is project based * Project intensive industries expect to grow their share of US GDP to $5.81 trillion** Project driven supply chain is the key for overall service performance Dispatching the right resources at the right place at the right time improves service effectiveness Better project management, planning of spare parts and timely resource dispatch improves service operations Accurate material planning prevents disruptions in service schedules and minimizes delays and cost overrun Seamless integration of services with projects and supply chain results in better asset management and maintenance history *Source: ** Source: 4 Copyright 2014 Deloitte Development LLC. All rights reserved.
5 What is the major risk in service execution? Project plan Contract changes Resources Materials Labor Tools & equipment Inputs Supply Chain Planning Project Management Service Execution Outputs Project deliverables Engineering configurations Procurement Start up & commissioning Service execution varyingwithassociatedriskthemitigateschainsupplydrivenproduct projectinputsandoutputs 5 Copyright 2014 Deloitte Development LLC. All rights reserved.
6 Why is project driven supply chain important? When Supply Chain and Service processes are not aligned and the underlying Technology is not integrated, the following can happen: Increased inventory levels Lack of trust between the supply chain and installation or field services Resource inefficiencies due to poor timing Project penalties from delayed milestones and deliverables Inability to accurately capture costs or recognize revenue Warehouse inefficiencies and inventory inaccuracies project, planningchainsupplyacrosscontrolandintegrationtight managementandserviceexecutionimprovesserviceoperations 6 Copyright 2014 Deloitte Development LLC. All rights reserved.
7 What is the Oracle solution? SC Service Requests PC Project Contracts HR Employees HR Organizations QA Collection Plans Collection Elements BOM Departments Resources EAM Assets Activities PS Scheduling Oracle Projects/ Service Contracts Service agreements Oracle PLM/ Engineering Manage Engineering Configurations IB Item Instance Counters Oracle cmro Create and Master and Unit Configurations Define Maintenance Programs Define Operations and Route Associate Materials and Resources to Maintenance Requirements Create Service Visit Perform Services Oracle Project Management Create and Manage projects Oracle ASCP/Oracle DP Material availability Material demand planning. PO Requisitions Purchase Orders Oracle Project Accounting Project costing and Billing Sales Order RMA for Repairs INV Inventory organization Location 7 Copyright 2014 Deloitte Development LLC. All rights reserved. OM P6 Project Plan Project Schedule Legal Entity Chart of Accounts CST GL Material Cost Resource Cost cmro is the unifying force for project driven supply chain in services
8 What processes are needed for the solution? Manage Project Manage Service Manage Supply Chain Plan and initiate project Assign project budget Execute project tasks and deliverables Plan service Schedule service Execute service and repairs Plan for service material demand Plan for resources demand Manage service forecast Monitor and control project costs Close and debrief service Consume forecast and demand pipeline Close project and monitor performance Monitor service performance Provide planning recommendations Project driven supply chain with cmro improves service readiness, resource utilization, asset management and maintenance history 8 Copyright 2014 Deloitte Development LLC. All rights reserved.
9 Ability to execute Gartner magic quadrant for Oracle cmro* Challengers Leaders Ability to Execute JDA Infor IFS HCL Technologies (SAP) IBM Maximo Oracle cmro Criteria driven by product functionality, global strength and the ability to deliver a point solution in the market. Completeness of Vision C.A.T. Trax Ultramain Mxi Niche players Visionaries Completeness of vision Ventyx Criteria is based on a combination of focus on A&D MRO segment, appropriate go-to-market strategy, and focus on innovation in MRO strategy MRO must provide support for: Materials Management Teardown/Overhaul Service Execution Asset Management Engineering Customer Service Administration 9 Source * Gartner: As of September 2013 Copyright 2014 Deloitte Development LLC. All rights reserved.
10 Case Study Industrial Manufacturing and Services Background Leading manufacturer and service provider of complex industrial equipment for power sector Challenges Time: Months to plan, Multiple-week outages, Minor delays cause huge losses Specialized Plants: Configured per customer order Unique, predefined maintenance requirements & service work packages Specialized Parts: 15,000+ parts Few common market parts Rare parts designed in the past Goals Enhance service efficiency and effectiveness & reduce overall project costs by optimizing Parts delivery Resource dispatch Tool availability Outcome Integrated Oracle suite of products driveto packageswork Pre-defined cmro: service planning, supply chain planning and Project/Service Execution Improved efficiency in project monitoring Project tasks created directly from cmro Timely delivery of spares and tools More effective utilization of service personnel Saved time and expected to improve overall service operations and cost utilization 10 Copyright 2014 Deloitte Development LLC. All rights reserved.
11 Case Study Aircraft Maintenance Services Background Goals Leading Air Force Sustainment center in USA Optimize assignment of resources and workloads Reduce re-work in repair processes Create mechanism to perform planning scheduling and execute maintenance Standardize the process to retire multiple systems used for the same purpose Challenges No visibility for end items in repair within and across air logistics complexes Substandard legacy processes and systems resulted in repair re-works Multiple supply chain systems Outcome Agile planning, optimized workload assignment and resource allocation Ability to reduce flow days, improve throughput, increase on time delivery, and improve aircraft availability Integrated MRO planning and finite scheduling for complete planning, scheduling, and execution capability using cmro 11 Copyright 2014 Deloitte Development LLC. All rights reserved.
12 Financial benefits Cost Benefits Integrated projects and services drive accurate schedules and efficient utilization of resources Integrated supply chains and projects improve customer service and equipment uptime Revenue Benefits Integrated project management using cmro and project driven supply chain allow for effective and timely recognition of revenue Integrated operational services and project management improve the ability to generate accurate revenue projections Integrated supply chain provides accurate and current status, which drive better financial decision making thereby providing more revenue opportunity cmro integrates project driven supply chain to improve financial margins 12 Copyright 2014 Deloitte Development LLC. All rights reserved.
13 Q & A 13 Copyright 2014 Deloitte Development LLC. All rights reserved.
14 Appendix 14 Copyright 2014 Deloitte Development LLC. All rights reserved.
15 Challenges & Implementation benefits of MRO MRO Industry Challenges New service models require new goals, skills and technology PBL s** are not used by every organization; they require new goals, metrics, technology and processes to support the new business model. Capturing Customer Requirements Requirements are often captured outside MRO systems or within different what sonexecutetoneedoperationsservice. systems expected. No visibility of upstream suppliers - Most firms do not have visibility past Tier 3 suppliers. A firm may be purchased, gone out of business such parts need to be reverse engineered if no technical data is available. Performance Management Firms rely solely on the contractor performing the service to accurately report on performance. Configuration Changes Product/Platform upgrades changes Benefits from MRO Software Labor Efficiencies Direct reduction in staff, lower training costs and higher throughput. Improvements of 10% to 20% are realistic for most companies. Inventory Reductions Reduced parts inventory because of minimizing inventory errors. Improved Asset Availability Many companies prioritize uptime or availability of an asset, and software can help plan preventive maintenance events to maximize this. Business Planning Technology and improved processes allow companies to scale operations to planned revenue levels, while minimizing the amount of labor and inventory needed. Compliance Software can automate data collection that can be used in reporting on contracted service levels and create an audit trail of performance. 15 PBL ** : Performance Based Logistics Copyright 2014 Deloitte Development LLC. All rights reserved.
16 What are key differences between EAM and cmro? Enterprise Asset Management (EAM) Only parent child relationship to build the configuration Configuration Management Complex Maintenance Repair and Overhaul (cmro) Uses master and unit configuration with rules to build the configuration Used for simple asset hierarchy where the configuration is constant (cranes, oil rigs) Attachments for documents storage purpose Used for complex configurations (aircrafts, ships), a regulatory based configuration Document management system Integration with enigma Configuration and maintenance setup can be built with the IPC in enigma Configuration is specific to Inventory Organization and Business Unit Operation and activity used for maintenance of assets Asset based planning Configuration is independent of Inventory Organization and Business Unit Planning Operation, routes and fleet maintenance program (FMP) used for maintenance Fleet Maintenance Program based planning Org level planning Meter reading and date based planning Outside the org and across organizational planning Counter reading based planning effectivelytomodulesprojectandplanningwithintegratedbetteriscmro forecastservicedemandandprovidematerialplanning 16 Copyright 2014 Deloitte Development LLC. All rights reserved.
17 Glossary of Abbreviations Module Short Name HR P6 GL INV CST OM PO IB PS BOM QA EAM SC PC Description Human Resources Primavera General Ledger Inventory Costing Order Management Purchasing Installed Base Production Scheduling Bill of Materials Quality Assurance Enterprise Asset Management Service Contracts Project Contracts 17 Copyright 2014 Deloitte Development LLC. All rights reserved.
18 As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication. Copyright 2012 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited
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