Example of using the Oracle SNO toolkit - Supply Chain Management

Example of using the Oracle SNO tool

Brewing Company "Baltika & quot; seeks to increase the functional efficiency in all areas of activity, including the operational one. Optimization of supply chains and centralized formation of a master plan for the production of products based on sales forecasts are strategic objectives of the logistics directorate of Baltika, for which the company chose the solution of Oracle SNO, that best meets its requirements.

In the difficult economic conditions for the economic crisis, with a tripling of the excise tax and a reduction in the beer market, the company "Baltika" is aimed at improving the efficiency of business processes and optimizing costs, choosing the most modern solutions. Baltika & quot; has completed the implementation of the system of medium and long-term planning, which enables us to continuously assess the impact of each solution on the costs and revenues of the company throughout the global supply chain. The planning system is integrated into the corporate information system, the core of which is the ERP-system "Monolith", which is an integrated set of three components.

• The designer of the supply chain models. This component of the system is an independent application implemented within the project by the company "Monolith-Info", which describes the structure of interaction of elements and forms a model of the supply chain.

• Business application Oracle SNO, providing calculation of the optimal model for the distribution of material flows of the network structure of supply chains in the framework of specified constraints and set optimization goals.

• Model storage and a system of cubes for analysis of the calculation results implemented within the project by the company "Monolith-Info" and providing analysis of the results of the distribution of material flows and costs based on the results of optimization of the supply chain.

The master planning system helps to centrally plan the work of all Russian production sites of the company "Baltika" based on the forecast of sales and distribute production volumes between the plants. Oracle solution & quot; allows you to minimize costs associated with the purchase of raw materials, production and delivery of finished products. The system makes it possible to solve multiparametric optimization problems of large dimension to satisfy the existing demand with minimal costs for a limited time.

The introduction of the master planning system allowed the development of a transparent IT tool that provided the opportunity to optimize costs at all levels of the network structure of the supply chain of the holding. Thanks to the update of the system, it became possible to react more quickly to changes and to analyze the activities of the DRM service. It can be noted that at present the system based on Oracle SNO is an integral part and an obligatory decision-making tool for supply chain optimization in the company "Baltika".

The project team consisted of specialists from the company "Baltika", units "Oracle Consulting"; and the company "Monolith-Info", with the system of which the integration of the solution Oracle SNO was realized within the framework of the project.

"It's nice to note that market leaders choose the Oracle SNO system for solutions to complex, large-scale and mission-critical tasks. Our decision helped to significantly optimize the supply chain for real Russian production and in real economic conditions ", - said Olga Belovolova, Director of the Department of Business Applications" Oracle CIS ". Within the framework of the project in the company "Baltika & quot; Several planning models were created, which ensured the flexibility and changeability of the supply chain model. Currently, the company uses four groups of models of supply chains: generalized - based on aggregated company data for 3 years ahead (long-term planning), annual (medium-term planning), 60-day (short-term planning) and decade - to optimize the distribution of finished products .

Supply chain optimization using the Oracle SNO tool consists of the following steps:

• use of demand scenarios as an input to the optimization system;

• comparison of the time-varying configuration of the supply chain network structure;

• Simulation of all elements of the supply chain (production sites, warehouses, production volumes, transportation methods, deployment of suppliers and consumers, etc.);

• modeling of changing business conditions (new business and new markets, sales/sales plans);

• optimization of the network structure, taking into account total costs, including transportation, storage, production, processing, opening and closing of capacities, etc.

Options for optimizing the structure of the supply chain can be:

• Optimization by the criterion of maximizing income: max (revenue - costs);

• optimization by the criterion of minimization of variable costs: shah (costs),

• maximum satisfaction of the sales plan;

• maximum/target value of recycling load;

• minimum/target value of stocks in storage.

Finding the optimal cost solution is done using a flexible modeling engine (Figure 3.27): linear programming or heuristic algorithms to find solutions corresponding to certain types of processes (smoothing the schedule for loading resources, minimizing processing time, etc.).

When optimizing the supply chain, the following constraints are taken into account:

• Resource (equipment, capacity, personnel, minimum and maximum capacity;

• storage (non-removable balances, insurance stocks, maximum storage volumes);

• production (minimum and maximum volumes of processing);

• sales (mandatory and anticipated orders);

• Transport (transport fleet capacity, delivery time, minimum and maximum traffic volumes).

Oracle SNO is a flexible mechanism for optimizing the structure of the supply chain

Fig. 3.27. Oracle SNO is a flexible mechanism for optimizing the structure of the supply chain

The strength of the CAST software module (Figure 3.28) is the detailed simulation of distribution (distribution network), including in variants with delivery by own transport and calculation of warehouse location based on the "centers of gravity" method. (see paragraph 3.3).

The CAST software module for optimizing the distribution system

Fig. 3.28. Software module CAST - optimization of the distribution system

Consider the business case of the application by the company "Deloitte & quot; network supply chain modeling for Coca-Cola & quot; (Germany).

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