E-Business Suite In-Memory Cost Management for Discrete ...

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E-Business Suite In-Memory Cost Management for Discrete Industries Enabling a Bottom-up Approach to Maximizing Profit Margins through Real-time Insight into All Aspects of Cost Management

Hans-Ulrich Römmler ERP PreSales Germany/ Switzerland


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Program Agenda

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Business Challenges

Look and Feel of the System

Solution Overview - Introduction to Engineered Systems

Oracle In-Memory Cost Management for Discrete Industries

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Program Agenda

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Business Challenges

Look and Feel of the System

Solution Overview - Why In-Memory Applications?


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Cost Management & Financial Accounting Organizations

Meet Corporate Fiscal Objectives Maximize revenue, margins, profits, working capital? Meet competitive challenges? Make timely decisions for global operations with

rapidly changing economics?

Drive Business Strategic Objectives Optimize product design through tight cost controls? Leverage insight into existing product life cycles? Drive product innovation and design? Increase market share in existing markets? Penetrate new markets and geographies?

Isolate Actionable Information Analyze existing product performance? Complete multidimensional analyses and what-if cost

simulations on big data? View the impact of potential cost changes on margins?

Handle Exploding Volumes of Data Process the numbers from global operations

managing high volumes of daily transactions? Assess alternatives from multiple over-lapping

supply chains? Get the needed information in time to be useful?

Business Challenges How do we…

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Absorb Acquisition Costs Optimize Manufacturing Costs

Maximize Margins Plan, Forecast and Setup

Costs

Allocate expenses

Setup accurate cost components

Maintain Costs

Perform what-if analyses through simulations Optimize product cost

structures

Manage Margins and Gross Profits

Track, maintain, optimize margins Feedback into cost planning

and pricing

Cost Management At-a-Glance

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Why is Cost Management Hard to Achieve? Routine Tasks Hinder Strategic Activities

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Create Orders

Create Transactions

Strategic

High

Medium

Low

Val

ue

Maintain Account Periods

Check Liabilities Create Invoices

Analyze Shopfloor Variances

Reconcile GL Balances

Perform Margin Analyses

Create / Maintain

Cost Setups

Reduce Costs Increase Margins

Perform Accounting & GL Transfer Activities


Maturity

Stra

tegi

c V

alu

e

Analytical Cost Management Perform reconciliations &

identify deviations Identify cost drivers Analyze margins, measure

profitability

Cost Maintenance Setup costs, accounts &

cost controls Develop & simulate

product costs Manage transaction

accounting

Strategic Cost Management Optimize product cost structures by

minimizing component costs Create profitable product mixes across

global operations Maximize gross margins & profits Increase penetration in existing

markets & enter new markets

Cost Management Transformation

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• What is it? New in-memory apps to maximize profits and margins by enabling near real-time insight into all aspects of cost

management

Drive strategic cost management objectives by

Maximizing gross margins and profits

Optimizing product cost structures through minimizing component costs

Creating profitable product mixes across global operations

Finding the right products to both increase penetration in existing markets and enter new markets

• How is it built? An Apps-to-Storage Solution Available Only on Oracle H/W Apps: EBS In-Memory Cost Management

Tech: Business Intelligence Foundation Suite, WebLogic Enterprise Edition, Times Ten on Exalytics, Oracle Database Enterprise Edition, Oracle Data Integrator (ODI), Exadata Storage Software

Hardware: Exadata, Exalytics, Exalogic (optional)

Oracle In-Memory Cost Management New In-Memory Solution


Example: new Product Mix

• Projector

– with WIFI- Module

– with Screen

– with BluRay Player

– 3D Glasses

– With Home Cinema Sound

Oracle Confidential – Internal/Restricted/Highly Restricted 11


Program Agenda

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Business Challenges

Look and Feel

Solution Overview - Why In-Memory Applications?


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Start Cost Simulation

Oracle Confidential – Internal/Restricted/Highly Restricted 13


What’s it Look Like?

Cost Simulator

All New Spreadsheet-based UI

Demo

Cost Compare Gross Profit Analyzer


Detail of the Assembly

Zoom Out


Calculate Gross Profit


Gewinnanalyse bei Kostenreduzierung einer Komponente von 39 auf 33 $


E-Business Suite In-Memory Cost Management for Discrete Industries The Transformational Power of In-Memory Cost Management

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Oracle In-Memory Cost Management New Applications on a Strong Foundation with a Long Legacy

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Existing EBS Functionality… New Applications

Cost Impact Simulator

Gross Profit Analyzer

Cost Comparison Tool

Related Products & Modules:

Oracle Discrete Manufacturing Oracle Bill of Material Oracle Inventory Management Oracle Order Management Oracle Shop Floor Management Oracle Flow Manufacturing Oracle Project Manufacturing Oracle Warehouse Management Oracle Enterprise Asset Management

Oracle Shipping Oracle Receiving Oracle Landed Cost Management Oracle Product Hub Oracle Procurement Oracle Accounts Payables Oracle Accounts Receivables Oracle General Ledger Oracle SubLedger Accounting Oracle Public Sector Financials Oracle Master Scheduling / MRP Oracle Human Resources

• Automatic costing of all inventory, work-in-process, and purchasing transactions

• Flexible cost and account setup features • Support for various perpetual (standard, average, FIFO, LIFO) and

periodic (periodic average, incremental LIFO) cost methods • Unlimited cost types, bill structures and routings that enable

extensive cost simulation, copying, and editing capabilities • Powerful supply chain cost rollup capabilities across organizations

and costing methods that leverage sourcing rules; used for simulation as well as primary cost setup

• Full support for Oracle Shop Floor Management • Comprehensive valuation and variance reporting • Revenue and COGS recognition, margin analysis • Integrations with Project Costing, Product Line Accounting,

Intercompany Inventory • Capability to configure out-of-box accounting through integration

with Oracle sub-ledger accounting


Maximize Revenue and

Increase Profits

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Optimize Operational Costs

and Working Capital

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Enables You To…

Oracle In-Memory Cost Management

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Obtain the Most Profitable Product Mix • Real-time results from big data across Supply Chain,

Purchasing, Manufacturing, Financials

• Complex multidimensional analyses and detailed what-if cost simulations

• Timely analyses of cost variations, inventory valuations, and the impact to margins and profits

View the Impact of Cost Changes • Assess the impact to margins now and downstream on

unshipped orders and forecasted demand

• Investigate the impact of granular cost changes and visualize the impact of the change

Make Decisions in Time to Capture Highest Possible Profits

Oracle's Cost Impact Simulator and Gross Profit Analyzer ( page 1 of 2 )

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Identify Optimal Pricing for Finished Goods • Comprehensive what-if analyses on complex multi-level bills

of material, routing data

• Assess even targeted changes to supplier costs on

⁻ Purchased components

⁻ Landed costs from transportation

⁻ Delivery-related expenses

⁻ Customs & Duty

⁻ Manufacturing costs on the shop floor

Accurately Simulate Future Costs • Plan target costs and predict margins based on historical data

and the influence of outside parameters • Run scenarios including the influence of inflation,

competitive pricing, discounts, potential tax increases

Make Decisions in Time to Capture Highest Possible Profits

Oracle's Cost Impact Simulator and Gross Profit Analyzer ( page 2 of 2 )

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Maximize Revenue and

Increase Profits

1

Optimize Operational Costs

and Working Capital

2

Enables You To…


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Process and Visualize Large Volumes

of Data In Real-Time

• Identify, view, analyze details of complex cost

structures across multiple locations, organizations,

legal entities and periods to drive timely corrective

decisions

• Fast data retrieval and processing driven by

Exadata’s hierarchical data storage with Smart Scan,

Smart Flash Cache, and Flash Write-Back

• Visualization and real-time data analyses driven by

Exalytics’s in-memory solution optimized specifically

to leverage components networked via a high-

bandwidth, low-latency InfiniBand network

Discover Hidden Opportunities to Further Shrink Operations Costs

Oracle's Cost Comparison Tool ( page 1 of 2 )

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Identify the Most Profitable Cost Structures

• Aggregate complete cost structure information from across extended business operations

• Easily compare complex cost structures from multiple operating units

Propagate Savings Across the Enterprise • Easily identify best-profit options to drive cost

efficiencies out to all operating units

Simulate Enterprise-wide Impact of Cost

Changes • Simulate the business-wide impact of a cost change

and its impact across all product lines

Discover Hidden Opportunities to Further Shrink Operations Costs

Oracle's Cost Comparison Tool ( page 2 of 2 )

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Maximize Revenue and Increase Profits

Optimize Operational Costs and Working Capital

• Obtain the Most Profitable Product Mix

• View the Impact of Cost Changes

• Identify Optimal Pricing for Finished Goods

• Accurately Simulate Future Costs

• Process and Visualize Large Volumes of Data in Real-Time

• Identify the Most Profitable Cost Structures

• Propagate Savings Across the Enterprise

• Simulate Enterprise-wide Impact of Cost Changes


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Bring costs live

The simulations created in In-Memory Cost Management are accessible in the Update Item Cost program in the core Oracle E-business Suite Cost Management application, so that desired simulation scenarios can be converted to standard costs.

E-Business Suite In-Memory Cost Management for Discrete ...

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