Transcript Giving Yourself Options – Using Oracle Assemble To Order (ATO)

Giving Yourself Options – Using
Oracle Assemble To Order (ATO)
Bob Collins, CFPIM, CIRM
SSI North America
Chicago, IL
August 15, 2003
Agenda
• Why consider ATO?
• Advantages to ATO?
• Example of Oracle ATO
ATO – Assemble-to-Order
• A production environment where a good or
service can be assembled after receipt of a
customer’s order. The key components . . . used
in the assembly or finishing process are planned
and usually stocked in anticipation of a customer
order. Receipt of an order initiates assembly of
the customized product. This strategy is useful
where a large number of end products (based on
the selection of options and accessories) can be
assembled from common components.
- APICS Online Dictionary (10th Edition)
ATO Bills and . . .
•
•
•
•
Modular Bills
Planning Bills
PTO Bills (Oracle)
Hybrid Bills (Oracle)
Why consider ATO?
• Options make planning and stocking
EVERY possible end item unrealistic
to impossible
• Difference between customer
delivery lead time vs. procurement
and manufacturing lead time
Stock issue
• When options are considered, there
may be hundreds of thousands of
end items
• Potentially millions of dollars of
inventory
• Many potential configurations are
never ordered
• Space problems, maintenance issues
Lead Time issue
• Customer delivery lead time = 4
weeks
• Procure materials, fabricate and
assemble – 28 weeks!
Total Lead Time
Customer
Delivery
Lead Time
MTS – MTO
Total Lead Time
MTS
Customer Delivery
Lead Time
Total Lead Time
MTO
Customer Delivery
Lead Time
ATO
Customer Delivery
Lead Time
Total Lead Time
Subassembly Lead Time
Final
Assembly
Lead Time
Inventory Implications
MTS
Inventory End Items
Raw Materials
MTO
End Items
Raw Materials Inventory
Order placed
ATO and Inventory
End Items
Order placed
Inventory
Sub
assemblies
Raw Materials
Advantages to ATO
•
•
•
•
Better response time
Reduced costs
Lower inventory
Reduced number of master
scheduled and forecast items
• Faster and fewer errors in order entry
Example: Computer
Computer
Options
Processor
(1 of 8)
Monitor
(1 of 6)
RAM
(1 of 4)
Speakers
(1 of 3)
Ethernet Card
(1 of 3)
Hard Drive
(1 of 6)
Printers
(1 of 7)
Modem
(1 of 3)
Graphics Card
(1 of 5)
Optical Drive
(1 of 6)
Software package
(1 of 5)
8 x 4 x 6 x 5 x 6 x 3 x 7 x 6 x 3 x 3 x 5 = 32,659,200 end items!
Maintenance Nightmare?
8x4x6x5x6x3x7x6x3x3x5=
32,659,200 end items
OR
8+4+6+5+6+3+7+6+3+3+5=
56 items at the option level
ATO allows you to create fewer Bills!
More advantages
•
•
•
•
Fewer Bills of Materials
Less BOM maintenance
More efficient order entry
Forecast/plan at level below the end
item
• Helps isolate opportunities for
standardizing and changing the
manufacturing process.
Example
Level
0
1
Processors
1.4 GB
2
ATO Model
Pentium 4 Family
.30
ATO Option Class
Monitors
Hard Drives
17” Flat
2.1 GB
.70
.40
60 GB
.20
80 GB
.60
120 GB
.20
21” Super
.60
ATO Items
Subassemblies
Components
3
Planning Percentages
Planning Process
• 100 Pentium 4’s in September
– 30 1.4 GB processors
– 70 2.1 GB processors
– 20 60 GB Hard Drives
– 60 80 GB Hard Drives
– 20 120 GB Hard Drives
– 40 17” Flat Screen monitors
– 60 21” Super Screen monitors
Optional/Mutually Exclusive
Optional/Mutually Exclusive
Description [ ] Mutually
Exclusive (default)
[X]
Choose any
Optional
number or no
options on the
option class bill
[ ] Optional Choose at least one
(default)
option on the
option class bill
[X] Mutually
Exclusive
Choose one or no
options on the
option class bill
Choose one, and
only one, option on
the option class bill
Configurator
Configurator
• When the order is placed, Order
Entry picks the options the customer
wants
• Rules to guide Order Entry
• Can reuse existing numbers if profile
option is set
Configurator Rules
• E.g., Automotive Manufacturer
– IF air conditioning ordered for vehicle
– THEN must include tinted windshield
Level
0
1
2
Configured Bill (*)
Pentium 4 Family*1234
Processors
2.1 GB
.70
Hard Drives
80 GB
.60
ATO Model
ATO Option Class
Monitors
21” Super
.60
ATO Items
Subassemblies
Components
3
Creation of Configured Item
• Creation of configuration bill of
material based on the model bill of
material
• Creation of configuration routing
based on the model routing
• Link the configuration item to the
sale order
Creation of Configured Item
• Kick off the configuration item
workflow process, which completes
the following:
– Lead time calculation for the configuration
item (discrete manufacturing items only)
– Supply Chain cost rollup for the
configuration item
Affect on Forecast
• Forecast at the Model level, using
planning percentages
• Configured items will consume the
forecast for the Model
Want to try it?
Metalink.oracle.com
Flow for ATO Configuration
Step-by-step instructions
Summary
• Oracle Applications supports ATO
(and PTO & CTO) with a range of
features in order entry, demand
forecasting, master scheduling,
production, shipping and financial
accounting.
Thank you!
Bob Collins, CFPIM, CIRM
SSI North America
Chicago, IL
[email protected]
August 15, 2003