Demantra Demand Management and JD Edwards World: Benefits of a "World"-Class Forecasting Tool

Margie Bell Director, Oracle Demantra Product Management Kevin Klimek, Oracle JD Edwards Senior Product Strategy Manager

Agenda
Why is demand driven planning important? Overview of Oracle Demantra Demand Management Integration: JD Edwards World and Oracle Demantra Demand Management

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Why is Demand Driven Planning Important?

Traditional Approach Disconnected

High latency, limited collaboration, no consensus forecasting
Your Company
Financial Planning Production Planning New Product Planning Sales Quotas Marketing Forecasting Measurement and Reporting

Manual processes Multiple data sources

Multiple, non-integrated systems

Low forecast accuracy Departmental orientation to demand forecasting Misalignment between metrics and objectives Not tied to Sales and Operations Planning process

Better Approach
Real-time demand sensing and collaborative consensus forecasting Eliminate decision making latency by focusing on excellence in demand visibility
Sense demand more frequently and closer to the point of consumption Replace spreadsheets with one number demand management Collaborate with all constituents

Improve your forecast accuracy

Use advanced analytics and statistics

Shape demand
Promotion excellence and decomposition Leverage granular demand signals (customer, channel, store, shelf) Identify and simulate cross selling opportunities

Evolve to real-time S&OP

Profitable demand response Identify supply side opportunities Define and monitor customer based metrics Get real time visibility to sales tactics (price breaks, promotions, deals)

Better Approach Significant Benefits

Demand Driven leaders have: 15% less inventory 17% stronger order fulfillment 35% shorter cash-to-cash cycle times Which translates to: 60% better profit margins 65% better EPS 2-3x the ROA
350 300 250 200 150 100 50 0
Strong Weak

Improved Demand Management is the first important step !

Perfect Order Cash-to-Cash

Inventory SCM Costs

Source: AMR Benchmark Analytix

How Delivers

Oracle Value Chain Planning Solution

Complete, best-in-class e-business planning process platform
Service Parts Planning Order Promising Demand Management

Demand Signal Management

Plant Scheduling and Monitoring

Risk Management Performance Management Sales and Operations Planning

Collaboration and Vendor Managed Inventory Supply and Distribution Planning

Trade Promotion Management

Single source of truth Integrated with ERP SOA enabled

Oracle Demantra Demand Management

Real-time demand sensing and collaborative consensus forecasting Proactive planning
CHANNEL DATA Capture demand more frequently, closer to the point of consumption Capture demand and forecast at more granular level (store, shelf, attributes, product characteristics) Achieve consensus demand number more quickly by involving all constituents at the same time, including customers Quickly identify and react to demand changes and exceptions

Improve forecast accuracy

Collaboration Workbench Marketing forecast Order history Leverage advanced statistics for more accurate demand number Use any combination of quantitative or qualitative data to establish your base line forecast High precision statistical forecasting, no statistical background required Superior Bayesian-Markov forecast analytics Forecast based on attributes and characteristics Leverage Advanced Forecast Modeling for promotion lift decomposition and causal analysis

Customer sales

Shipments

Shape demand for profitability

Plan new product introductions Plan promotions and sales incentives Identify cross selling opportunities

Evolve to real-time S&OP

Demand Hub and Seeded Worksheets Profitably balance supply, demand, and budgets Align strategic and tactical plans Role based process, proactively managed via workflow

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Proactive Planning

Proactive Planning
Involve all constituents and forecast closer to the point of consumption Sense demand real-time, at more granular level, and closer to the point of consumption
Report and measure demand in the ways important to your business - rolebased Collaboration Workbench for coordinated demand response Support different demand data for each customer and channel Easily add additional sources of information, such as external syndicated and POS data, using data integration profiles Use multiple units of measure and multiple currencies Collect information from multiple source ERP instances Out-of-the-box integration for Oracle EBS, JDE E1, JDE World, Peoplesoft

Leverage built-in intelligence to automatically select which levels data to use for forecasting
Roll up data across unlimited hierarchies Forecast at any level of time, product, and location aggregation Completely meta data driven change on the fly Weekly and daily forecasting support Simulate and compare different demand scenarios

Automate collaboration through workflow

Ensure all constituents submit numbers on time Configurable push exception management automates review process

Improve Demand Visibility

Collaborate with customers and measure impacts

Partner Inputs: XML,EDI or Manual

Partner Forecast Metrics

Improve demand visibility with customer collaboration Tailor worksheets to specific customer needs Worksheet can be attached to a task Direct alerts via application or email Automate internal notification on customer input Field-level security tied to customer access privileges

Automate Key Steps in Process

Quickly identify and react to demand changes and exceptions

Adapt quickly to new demand signals

Incremental forecasting

Task and exception driven user dashboards

Queue for workflow and manually generated tasks Alerts and actions can be triggered by people, the systems, or the analytic engines

Automated escalation ensures response Tailor planning processes to resemble unique company business requirements
Easy-to-use drag and drop interface User defined performance indicators

Improve Demand Planner Productivity

Configurable user interface replaces need for individual spreadsheets while ensuring enterprise database access and security
Task oriented dashboards Excel like worksheets
Context sensitive User configurable workspaces Copy and paste multiple cells and rows Create new worksheets based on 20 seeded ones (Historical forecast performance, Forecast accuracy, Top and bottom 5 customers year to date, Revenue analysis, and more) Shared and private worksheets View in any unit or currency

View data at multiple levels in hierarchy of choice Simultaneous update and view multiple worksheets and perform side-by-side comparisons Color coding based on exceptions Flexible formulaic expressions Online notes with audit trail Off-line mode with automatic sync and MS Excel integration

Task Oriented Dashboards

Personalized worksheets Online status of Analysts collaboration group

Real-time alerts, exceptions and workflow messages

Open any worksheet filtered by a Product Category

Excel Like Worksheets

Work on multiple worksheets at various levels at the same time

Integrated, configurable graphs Color coded cells to focus planners attention on key issues

Flexible Hierarchies
Support planning the way your business works Unlimited hierarchies to model all planning data:
Marketing Products and product families Plants and distribution networks Customer ship-locations including DCs and stores Sales territories and customer account relationships Promotion and marketing programs Attributes and characteristics

New levels can be added on the fly Edit and view data at multiple levels in hierarchy of choice
Use lower level data for higher level forecasting Use higher level data for lower level forecasting

Intelligent data management ensures incomplete data is detected

Sales Rep Planning automatically done at next level when statistically relevant data is not available

Comprehensive Audit Trail

Accountability throughout the entire organization
Online Notes and Audit Trail with digital signature

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Improve your Forecast Accuracy

Improve Forecast Accuracy

Leverage Advanced Forecasting and Demand Modeling option
Historical data Bayesian Estimator Multiple causal factors Bayesian Optimizer

Mixed models used in same time series adjust for multiple causal factors including seasonality, market trends, and promotions Each model contributes different forecast characteristic to the overall model Automatic model selection provides improved accuracy of best fit approaches
One forecast based on multiple models instead of only using best-fit model Self-tuning engine

Forecast
Combined model

Seasonality Causal Analysis

Promotion Events

Forecast trees automatically find level with statistically relevant data

Trend

Forecasts stored at lowest level Proportion rules applied when necessary

Outlier Detection

Cyclical Patterns

Can incorporate external information such as weather, market drivers, forward indicators, and competitive data

Improve Forecast Accuracy

Built-in accuracy metrics

MAPE Mean Absolute Percent Error

MPE - Forecast Bias

WMAPE Weighted MAPE by revenue, cost, and so on

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Shape Demand for Profitability

Shape Demand for Profitability

Accurately forecast demand for new products based on existing data

New products present forecasting challenges

Limited or no demand history for a given item May combine characteristics of several previous products Price points, changing market conditions may be different Product demand changes over product life cycle

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Shape Demand for Profitability

Accurately forecast demand for new products based on existing data

View demand of comparable products based on characteristics

Automatically detect outliers

Derive forecast for new product and adjust forecast based on actual demand

Shape Demand for Profitability

Leverage Advanced Forecasting and Modeling to understand the real impact of promotions and sales incentives
4000 3500 3000 2500 Cases 2000 1500 1000 500 0 Period 1

Past

Future

Period 6

Period 11

Cannibalization Pre- and post-effects Competitive switching Category growth Baseline Actual

What incremental volume will result from a marketing program? How will it impact the sales of other products? How does a marketing program at a brand or product family level impact a specific item? What were the indirect effects such as cannibalization and consumer stockpiling? What is the ROI on my marketing and trade spending? What is the predicted impact of future activity? How does a promotion impact shipments and DC replenishments?

Shape Demand for Profitability

Leverage Advanced Forecasting and Modeling to understand the real impact of promotions and sales incentives
Typical Demantra AFDM
Cross product cannibalization Pre and Post promotion effect Incremental Long term growth

Baseline versus incremental volume

Provides decomposition of incremental volume from advertising, promotions, or sales incentives

Granular lift analytics

Incremental volume lift coefficients maintained at lowest level Localized promotion analysis Allows shipments/replenishments to be adjusted by ship-to location

Competitive switching

Cross product and customer effects

Baseline Baseline

Determines cross-product cannibalization impact Adjusts forecasts for product and customer cannibalization

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Evolve to Real Time Sales & Operations Planning

Evolve to Real-Time S&OP

Profitably balance supply, demand, and budgets

Supply Chain

Sales

Develop predictable business plans Shape demand to meet financial goals Align supply chain to support plan
Finance

Monitor performance to plan Shape demand to close gaps Drive decisions into ERP

Customers

Suppliers

Marketing

Evolve to Real-Time S&OP

Profitably balance supply, demand, and budgets Seeded templates for S&OP collaboration
Seeded consensus planning worksheets Easily tailored to your business

Configurable and extensible

Extensible hierarchies and dimensions Collaborate at any level User-defined reports and exceptions

Manage by exception instantly

Exceptions and visual cues easily point to important issues immediately Document all assumptions with a complete audit trail of decisions taken Leverage POS data to alert planners to exceptions real time (versus batch month by month)

Integrated
Seeded data streams for data commonly used in the process

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Architecture

State-of-the-art and Scalable Architecture

Scalable
s ines Bus ogic L
P OLA

w& s kflo Wor ception Ex

GUI

Handle millions of combination

Bu s in es sA pp

lic ati on

e ictiv Pred eling Mod

Web-based user interface personalization

Dynamically configure Drag-and-drop

La ng

ua g

y itor pos a Re Dat es and rvic Dem n Se ed i io Unif grat Inte ata D ture s truc rvice fras urity Se guration a In c fi Con antr le Se s Dem ser / Rotration &t Service
U minis ec Obj d A siness u B

imiz O pt on i at

Tailor workflow processes to unique company requirements

Demand Management adapts to your business process

ack y St ) olog HTTP(S n ech L/ se T HTM rpri / XML / Ente P r

A e SO E Serv J2E MS DB R

Create alerts and exception rules Customize reports on-the-fly Dynamic open link to MS Excel Work in disconnected mode

Demantra Integration Overview

Advanced Planning Command Center

SCM & Financials

Trade Promotion Optimization SCM Deduction and Settlement Mgmt

Real-Time S&OP

E1

World

Predictive Trade Planning

Demand Management Advanced Forecasting & Demand Modeling

Sales

CG PIP

Strategic Network Optimization Inventory Optimization

Advanced Supply Chain Planning Service Parts Planning Collaborative Planning

Demand Signal Repository Production Scheduling Manufacturing Operations Center

Financial Planning Global Order Promising PLM VALUE CHAIN PLANNING

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Copyright 2008, Oracle. All rights reserved.

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JD Edwards World and Demantra Demand Management

JD Edwards World to Demantra Integration

Business Challenge

The Issue:
Better Forecast Accuracy in a Demand Driven, Consensus Based, Collaborative Planning Environment

The Solution:
Use a Single, Precise Forecast from Demantra Demand Management to Drive the JD Edwards World MRP/DRP Process

JD Edwards World to Demantra Integration

Functional Overview

JD Edwards World
Manufacturing Management Order Management Inventory Management

Demantra Demand Management

Demand Management Advanced Forecasting

Items Customers Sales History

Forecast

JD Edwards World to Demantra Integration

Functional Overview

Download from JD Edwards World and Upload to Demantra:

Item, Facility (B/P), Customer information Open Sales Orders/Sales History Notifications (errors, warnings, success) available via e-mail and through Batch Status Inquiry program

Download Forecast from Demantra and Upload to JD Edwards World:

Forecast to JDE World Notifications (errors, warnings, success) available via e-mail and through Batch Status Inquiry program

JD Edwards World to Demantra Integration

User Notification of Exceptions

Seeded workflow notifications can be modified by selecting the appropriate group for notification

JD Edwards World/Demantra Integration

Functional Overview

Menu G34A2 Contains all programs/operations for the integration to Demantra Demand Management

Outbound Processor
Functional Overview JD Edwards World

FXXXX FXXXX

F34AXXXX F34AXXXX

F34AXXXXF F34AXXXXF

FTP

XXXX.txt XXXX.txt

Outbound Processor
Functional Overview
Item/Unit of Measure F4101, F41002/3 Item/Branch F4102 Customer F0301, F0101 Facility F41001, F0006 Sales F4211 Sales History F42119 P34A130

P34AOB
F34A4101

P34A140

F34A4102

P34A150

F34A0301

P34A160

F34A4001

P34A110 F34A4211 P34A120

Inbound Processor
Functional Overview JD Edwards World

F3460 F3460

F34A3460 F34A3460

F34A3460F F34A3460F

FTP

Forecast.txt Forecast.txt

Inbound Flat File to Forecast

For More Information

Click on: JD Edwards World A9.1 Integration to Demantra Demand Management Functional Overview
Follow Sign on Instructions and Click on JD Edwards World: Migration / Integration link

OR Oracle Demantra Demand Management OR JD Edwards World Home Page

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