Oracle EBS SCM – Strategies and Tips

One of Oracle’s primary product lines is Oracle E-Business Suite. It is an integrated set of business software for automating customer relationship management (CRM), enterprise resource planning (ERP), and supply chain management (SCM) procedures within enterprises. It is also known as Oracle EBS.

In this blog, we aim to share how the Oracle EBS suite can help you manage your manufacturing supply chain (SCM) and how to use Oracle SCM software to plan and forecast supply chains.

Strong supply chain planning is the foundation for successful supply chain management. Master Scheduling/MRP and Advanced Supply Chain Planning are two Oracle Applications products for material and capacity planning in a manufacturing or distribution context.

Master Scheduling/MRP allows for unrestricted material and resource planning by a single entity. This planning tool will be referred to as MRP. Advanced Supply Chain Planning (ASCP) is a next-generation planning tool that supports multi-organizational planning as well as constraint-based and optimized strategies.

This blog covers the core reasoning both approaches leverage as well as common ground shared by both. As reference, please keep in mind that Oracle used to sell a product called Supply Chain Planning, which could plan across a supply chain but didn’t have the limitations, optimization, or changeable granularity of the Advanced Supply Chain product. This is no longer marketed as a distinct product with Release 11i, so we will not be covering it in this blog.

How Oracle EBS Can Help Manufacturing

Logic for basic planning

In Oracle EBS SCM, both MRP and ASCP’s core logic has been well tested. In a production setting, the process works its way down the bill of materials, with recommendations at one level forming the basis for needs at the next level of components, and so on.

Demand recognition

Demand begins as a forecast of what a company intends to sell or ship. This form of demand indicates what you know or expect you’ll sell outside of your company, and it’s known as independent demand because it’s out of your control to some extent. The independent demand for your finished items determines the need for component parts in a manufacturing business; this is known as dependent demand because it is based on, and can be derived from, your bills of material.

In most cases, independent demand is a mix of projected and actual (Sales Order) demand. The proportion of projected and actual demand will vary depending on the stocking strategy you use for a given product; under a make-to-stock strategy, you will rely largely, if not entirely, on predicted demand. You’ll rely significantly on actual sales orders in a make-to-order strategy.

Alternate forecast scenarios are supported by Oracle EBS SCM, so the forecasts you wish to utilize for planning, as well as the real demand you want to identify, are specified in a Master Demand Schedule (MDS). In the “Master Scheduling” section, the MDS is explored in greater depth.

Demand derived from the explosion of your bill of materials is known as dependent demand. One of the most important tenets of MRP planning is that dependent demand should be calculated rather than forecasted.

Forecasts are frequently wrong because they seek to foresee the future; forecasting what you can compute will only exacerbate issues.

It’s possible for a single item to have independent and dependent demand. You’d want to forecast the independent element of tire demand while estimating the dependent demand if you were selling tires as service parts in addition to including them on a produced vehicle.

Forecasting

Forecasts are required by most firms at some point in the future. Even a pure make-to-order company will almost certainly wish to employ demand predictions for long-term planning. Forecasting is as much an art as it is a science, and this book does not cover the art of forecasting.

Each item in a forecast often includes numerous entries, each of which represents a dated demand for that item. Forecasts are divided into forecast sets for simplicity of use and management of forecast consumption.

A forecast will usually have several item numbers, referred to as forecast items, and each item may have many forecast entries, each indicating the projected demand for a certain day, week, or month.

Statistical forecasting and focus forecasting are two main ways for generating forecasts from past data in the Oracle EBS SCM Master Scheduling/MRP and Inventory Applications. While both systems rely on tried-and-true algorithms, the amount of control they give is limited. They are based only on the history of issue transactions (not order bookings).

Oracle’s Inventory and Master Scheduling/MRP solutions have rudimentary statistical forecasting capabilities. Statistical predictions may cover a wide range of time periods and can detect trends and seasonality. Focus forecasting serves as a “sanity check” on the prediction for the current month. Focus forecasting compares five alternative prediction models to historical data, assesses which model would have forecasted the data the best, and then utilizes that model to provide a forecast for the current period.

To create a forecast, you:

  • Name of the prediction you’d like to fill in.
  • The bucket, forecast technique, and demand stream are all determined by the forecast rule.
  • To identify the things for which you wish to make a forecast, use selection criteria. You can choose from all items, all things in a specified category within a category set, items in a specific category within a category set, or a single item.
  • There’s an overwrite option that controls what happens to existing prediction data. Before repopulating the prediction data, All Entries deletes all previous forecasts. Only prediction items that were previously created from the same source as the one you’re about to import are deleted. There are no existing entries deleted when you use None.
  • Start and end dates for the forecast information you’re about to produce.

Master scheduling or planning

A master schedule is always the first step in the planning process. Each master schedule has a 10-character name, similar to predictions. Master Demand Schedules and Master Production Schedules are the two forms of master schedules supported by Oracle EBS SCM. While many individuals are unaware of the difference between a Master Demand Schedule and a Master Production Schedule, it is an important notion. It is not always possible to manufacture exactly to fulfill client demand in many firms, especially for seasonal items. Separating demand from supply is especially useful in such situations.

Master demand schedules and master production schedules

A Master Demand Schedule (MDS) is an anticipated shipment schedule; it is the statement of demand you want to recognize for a particular planning run. A Master Production Schedule (MPS) is a production plan, a statement of how you plan to schedule production. It might also be called a production forecast.

Loading schedule master

A load is the process of transferring data into a master schedule. You must reload the master schedule as often as necessary to notice changes in demand since it reflects the demand that drives the planning process. The procedure is straightforward, however it does provide a few options:

  • The name of the schedule that is about to be loaded.
  • The information’s source (source type, source organization, and source name).
  • You can opt to load All Sales Orders or Sales Orders from the Start Date Forward if you wish to include Sales Orders in the master schedule. You can also restrict sales order lines to a single demand class.
  • Deal with the Demand Time Fence.
  • Restriction of load data with a start and end date.
  • Choose forecast explosion when loading the master schedule.
  • Leverage the overwrite option.

Upgrade to R12.2.x To Access All Oracle EBS SCM Capabilities

As an Oracle EBS client, you are probably familiar with the newer, more feature-rich, modern, reliable, and secure versions of Oracle EBS that have been introduced with release 12.2. As a result, updating Oracle E-Business Suite is a must for any company looking to save expenses, save resources, or speed up operations.

Oracle released the 12.2.11 version of its EBS in November 2021. This new version includes major improvements in security, speed, and stability, as well as new features, as well as legislative and regulatory revisions.

EBS 12.2.11 can be installed as an online patch for current Oracle EBS 12.2.x users. However, enterprises currently on EBS 12.1 must first update to 12.2, after which they can upgrade to the most recent EBS release. If you’re upgrading from Oracle EBS 12.1, it’s a good idea to enlist the help of an Oracle E-Business Suite Partner like IT Convergence.

As an Oracle Platinum Partner, IT Convergence has the best EBS upgrade consultants and methods in place to provide Oracle EBS modernization strategies, along with resource-sharing models to fast-track your upgrade.

Talk to our EBS upgrade experts today.