This chapter covers the following topics:
Due to the dynamic nature of the global business environment, companies are searching for ways to improve their supply chains in order to absorb disruptions that occur unexpectedly. While providing other substantial benefits, Just-in-time, and Lean Manufacturing initiatives have hindered many business's ability to absorb the impact of unexpected events. Slack in the supply chain - usually in the form of inventory - is no longer available and a sudden change, such as a missed supply, can have an immediate impact on a company's operations.
We can all think of sensational events that have a major impact on business operations but a missed supplier shipment of a critical component can also impact operations. Plant strikes, a demand spike, and quality issues are other examples of events that can halt your supply chain. The business reality of today requires companies to manage risks.
Managing risk in your supply chain is a cyclical process involving risk identification, risk mitigation, and execution of your mitigation strategies. The Supply Chain Risk Management (SCRM) dashboard focuses on evaluating risk mitigation strategies.
SCRM analysis of various Risk Mitigation strategies can be scenario intensive where different options can be effectively evaluated. The Supply Chain Risk Analytics application provides the ability to collectively review and compare key metrics in a single interface providing true Enterprise Planning capabilities to the SCRM dashboard.
The table below, while not comprehensive, highlights some of the problems and questions that can be addressed with the SCRM dashboard.
Business Problem | What is the Risk? | Where is the Risk? | How do I mitigate the Risk? |
Sudden demand change increase based on the updated consensus forecast |
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Subcontract additional manufacturing capabilities |
Natural disaster resulting in supply chain disruption |
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Design of resilient supply chains by considering multiple sourcing options. |
New product launch by competitor |
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Demand shaping with promotion, lower price, or introduce competing product |
Unexpected loss in capacity due to plant shutdown, labor strike, or resource issue |
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Unexpected disruption in supply due to de-commit, quality, or other factors |
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Timing of new product launch |
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Product timing balancing E&O with revenue/margins |
Exposure based on probably demand ranges. For example: baseline, optimistic, pessimistic forecasts |
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The report pages leverage the flexibility of the Oracle Business Intelligence – Enterprise Edition (OBIEE), which enables the layout and content of the delivered reports to be changed by the user. The reports are organized in logical groupings as pages, or tabs, within the Supply Chain Risk Management Dashboard.
For details on how to use the OBI-EE features, see Oracle Business Intelligence Answers, Delivers, and Interactive Dashboards User Guide.
These pages are available for the supply chain risk analyst:
Executive Review.
Inventory Analysis.
Supply Chain Sourcing.
Glossary.
The Glossary page provides:
Definitions of all measures that are presented in the Supply Chain Risk Management Dashboard.
Information about the logic used to calculate each measure.
This section provides an overview of the Executive Review page and discusses:
Profit Comparison.
Cost Analysis.
Revenue by Fiscal Period.
Margin by Fiscal Period.
Supply Demand KPI.
Inventory KPI.
Utilization KPI.
Strategic Plans.
Inventory Optimization Plans.
The Executive Review page allows the risk analyst to quickly and efficiently evaluate the different scenarios across different metrics and KPI’s. The goal is to understand the trade-off’s of choosing one scenario over another so that compromises and risks are understood. For example, lower margins might be an acceptable trade-off compared for improved customer service or improved supply chain resiliency.
To access the Executive Review page:
Select the Supply Chain Risk Analyst responsibility.
Select Supply Chain Risk Management Dashboard.
Select the Executive Review tab.
Page-level filters are provided at the top of the Executive Review page. Page-level filters are used to filter the results of the work areas.
This table lists the page level filters for the Executive Review page:
Filter | Description |
---|---|
Comparison Scenario | Select from a list of scenarios by which to compare to a baseline scenario. This is a required field. |
Baseline Scenario | Select from a list of scenarios to be used as the baseline. Only one scenario can be selected. This is a required field. |
Fiscal Year | Select from a list of fiscal years. Multiple years can be selected. This is an optional field. |
Category | Select from a list of item categories. Only one category can be selected. This is an optional field. |
This report shows Total Revenue, Total Cost, Gross Margin, Revenue and Margin Difference across the baseline and comparison scenarios. Values displayed are calculated as follows:
Total Revenue from expected sales is equal to the sum of (Independent demand quantity * (list price - discount)).
Total (Supply Chain) Cost is the sum of manufacturing, purchasing, transportation, fixed cost, startup & shutdown, and carrying costs in reporting currency.
Gross Margin is the difference between Total Revenue and Total Cost.
The difference values are the difference between the comparison scenarios and the baseline scenario.
Additional reports that you can access from the Profit Comparison report are (in alphabetical order):
Margin by Fiscal Period.
Margin by Organization.
Revenue by Customer.
Revenue by Fulfillment Organization.
Revenue by Organization.
Supply Value by Category.
Supply Value by Item.
Supply Value by Source Organization.
This report provides an overall cost breakdown of the different cost types across scenarios and can be used to quickly identify the cost drivers for a given scenario. Total Cost Difference provides a quick summary of the cost difference between the comparison and baseline scenarios and drilldowns from this column provides additional cost differences by type.
Fixed costs, Shutdown and Startup Costs are costs that can be modeled in Oracle Strategic Network Optimization (SNO) for network design and analysis.
Fixed costs are period-specific fixed operating costs for an organization. Startup costs is the cost for starting up a facility, and shutdown cost is the cost of shutting down a facility and can often be a benefit due to the sale of the organization assets. If this value is negative, it represents a net inflow (benefit) of capital.
The View option above the chart allows you to display the report information by Cost Breakdown or Total Cost.
Additional reports that you can access from the Cost Analysis report are (in alphabetical order):
Carrying Cost by Category.
Carrying Cost by Fiscal Period.
Carrying Cost by Item.
Carrying Cost by Organization.
Cost by Resource.
Fixed Cost by Organization.
Fixed Cost by Period.
Manufacturing Cost by Fiscal Period.
Manufacturing Cost by Organization.
Purchasing Cost by Category.
Purchasing Cost by Fiscal Period.
Purchasing Cost by Item.
Purchasing Cost by Organization.
Purchasing Cost by Supplier.
Shutdown/Startup Cost by Period.
Startup/Shutdown Cost by Organization.
Transportation Cost by Fiscal Period.
Transportation Cost by Lane.
Transportation Cost by Ship Method.
This report shows revenue over time across the baseline and comparison scenarios and is useful for highlighting revenue risk across scenarios such as significant revenue fluctuations which may have a material impact on the business.
The View option above the chart allows you to display report information in a Revenue Chart or Revenue Table.
Additional reports that you can access from the Revenue by Fiscal Period report are (in alphabetical order):
Revenue by Category.
Revenue by Customer.
Revenue by Item.
Revenue by Organization.
This report shows margin over time across the baseline and comparison scenarios and is useful for highlighting profitably risk when modeling risk events in the various scenarios.
The View option allows you to display the report in a margin chart or margin table.
Additional reports that you can access from the Margin by Fiscal Period report are (in alphabetical order):
Margin by Organization.
This is a summary of the key supply and demand Key Performance Indicators across scenarios.
Additional reports that you can access from the Supply Demand KPI report are (in alphabetical order):
Consensus Forecast by Fiscal Period.
Constrained Forecast by Fiscal Period.
Total Demand by Category.
Total Demand by Customer.
Total Demand by Fiscal Period.
Total Demand by Item.
Total Supply by Category.
Total Supply by Fiscal Period.
Total Supply by Item.
Unmet Revenue by Category.
Unmet Revenue by Customer.
Unmet Revenue by Fiscal Period.
Unmet Revenue by Item.
Key inventory KPI values appear in this report and are useful when leveraging Inventory Optimization (IO) to define optimal safety stock policies in concert with network design Decisions in Strategic Network Optimization (SNO).
This report provides a high level summary of resource and supplier utilization. Supplier utilization is relevant if supplier capacities are constrained.
Additional reports that you can access from the Utilization KPI report are (in alphabetical order):
Resource Utilization by Fiscal Period.
Resource Utilization by Organization.
Resource Utilization by Resource.
Supplier Utilization by Fiscal Period.
Top Supplier Item Utilization.
This report displays Strategic Network Optimization (SNO) plans based on the selected Baseline and Comparison scenarios. The plan names represent links that allow you to access the SNO workbench to view the plan for further analysis. When opening the SNO plan, only the base model is loaded and not the specific scenario.
This report displays Inventory Optimization (IO) plans for the selected scenarios. The plan names represent links that allow you to access the IO Analysis workbench to view the plan for further analysis.
This section provides an overview of the Inventory Analysis page and discusses:
Cost Analysis.
Network and Inventory Summary.
Postponement Analysis.
Excess and Obsolescence.
Safety Stock Scenario Analysis.
Inventory Analysis.
Service Level Scenario Comparison.
Unmet Revenue Analysis.
In most cases risk in the supply chain manifests itself as inventory. For this reason, a dedicated page for inventory analysis will be provided to allow for inventory comparisons across scenarios. This page can be used to analyze the risk of different network design alternatives in your supply chain taking into consideration the impacts of variability and its affect on inventory. Postponement strategies can also be evaluated for different network design scenarios, providing a measure of risk that can be evaluated. This page can help answer questions such as:
What is the appropriate number and location of distribution facilities?
What postponement strategies should be employed, and where?
In what form should inventory be held to protect against uncertainty?
How could I react to a disruption in supply due to unforeseen events?
What is the impact of mergers and acquisitions on my supply network?
To access the Inventory Analysis page:
Select the Supply Chain Risk Analyst responsibility.
Select Supply Chain Risk Management Dashboard.
Select the Inventory Analysis tab.
Page-level filters are provided at the top of the Inventory Analysis page. Page level filters are used to filter the results of the work areas.
The table below lists the page-level filters for the Inventory Analysis page.
Filter | Description |
---|---|
Comparison Scenario | Select from a list of scenarios by which to compare to a baseline scenario. This is a required field. |
Baseline Scenario | Select from a list of scenarios to be used as the baseline. Only one scenario can be selected. This is a required field. |
Fiscal Year | Select from a list of fiscal years. Multiple years can be selected. This is an optional field. |
Category | Select from a list of item categories. Only one category can be selected. This is an optional field. |
This report provides an overall cost breakdown of the different cost types across scenarios and can be used to quickly identify the cost drivers for a given scenario. Total Cost Difference provides a quick summary of the cost difference between the comparison and baseline scenarios and drilldowns from this column provides additional cost differences by type.
Fixed costs, Shutdown and Startup Costs are costs that can be modeled in Oracle Strategic Network Optimization (SNO) for network design and analysis.
Fixed costs are period-specific fixed operating costs for an organization. Startup costs is the cost for starting up a facility, and shutdown cost is the cost of shutting down a facility and can often be a benefit due to the sale of the organization assets. If this value is negative, it represents a net inflow (benefit) of capital.
The View option above the chart allows you to display the report information by Cost Breakdown or Total Cost.
Additional reports that you can access from the Cost Analysis report are (in alphabetical order):
Carrying Cost by Category.
Carrying Cost by Fiscal Period.
Carrying Cost by Item.
Carrying Cost by Organization.
Cost by Resource.
Fixed Cost by Organization.
Fixed Cost by Period.
Manufacturing Cost by Fiscal Period.
Manufacturing Cost by Organization.
Purchasing Cost by Category.
Purchasing Cost by Fiscal Period.
Purchasing Cost by Item.
Purchasing Cost by Organization.
Purchasing Cost by Supplier.
Shutdown/Startup Cost by Period.
Startup/Shutdown Cost by Organization.
Transportation Cost by Fiscal Period
Transportation Cost by Lane.
Transportation Cost by Ship Method.
This report provides a summary of network and inventory Key Performance Indicators and is useful when holistically designing your supply chain network taking into account the number and location of facilities in conjunction with the impacts to your inventory policies. The intent is to analyze scenarios where Strategic Network Optimization and Inventory Optimization are used in concert.
The number of items Single Sourced is a useful risk metric that reports on the number of items that have only one source for a given organization. A higher number indicates an increased risk in your supply chain
Additional reports that you can access from the Network and Inventory Summary report are (in alphabetical order):
Inventory Turns by ABC Class.
Inventory Value by Category-Organization.
Items Single Sourced.
Single Source Count by Category.
Single Source Count by Organization.
Top – Days of Cover by Item.
This report allows you to view data based in selected View, Category, or Organization.
This report is primarily used when incorporating Inventory Optimization in your scenarios and quantifies the impact of inventory postponement in both inventory carrying cost and safety stock. A higher degree of postponement indicates lower overall inventory risk.
Fact Notes
All facts represent dollar values.
Carrying Cost Savings = Carrying Cost without Postponement – Carrying Cost
Safety Stock Savings = Safety Stock without Postponement – Safety Stock Value
The report allows you to view information based on the selected View. The available options are view by Table or Chart.
Additional reports that you can access from the Postponement Analysis report are (in alphabetical order):
Postponement by Organization.
This report allows you to view data based in selected View, Category, or Organization.
This is summary report indicates the potential amount of excess or obsolete components and is a good measure of inventory risk.
The reports allow you to view information based on the selected View. The available options are view by Category or Organization.
The Total Excess Value is computed as:
Total Excess * Item Standard Cost
Where Total Obsolete includes obsolete on hand plus obsolete on order. Obsolete on hand is the difference between On-Hand Inventory and Demand within Obsolescence Horizon and Obsolete On-Order is the difference between On-Order Inventory and Demand within Obsolescence Horizon.
The Total Obsolescence Value is computed as:
Total Obsolete * Item Standard Cost
Where Total Obsolete includes obsolete on hand plus obsolete on order. Obsolete on hand is the difference between On-Hand Inventory and Demand within Obsolescence Horizon and Obsolete On-Order is the difference between On-Order Inventory and Demand within Obsolescence Horizon.
Additional reports that you can access from the Excess and Obsolescence report are (in alphabetical order):
Excess Details.
Obsolescence Details.
This report provides the ability to compare safety stock by category, organization, or period across the various scenarios.
The View list provides the following options for the report data to be displayed:
Safety Stock by Category.
Safety Stock by Fiscal Period.
Safety Stock by Organization.
Additional reports that you can access from the Safety Stock Scenario Analysis report are (in alphabetical order):
Comparison of Inventory and Safety Stock.
This report allows you to compare the projected available balance against the safety stock targets for each scenario.
The View selector provides the following options:
Safety Stock Target Analysis.
Safety Stock Target Analysis – Value.
The Scenario selector allows you to choose which scenario data to view.
Additional reports that you can access from the Inventory Analysis report are (in alphabetical order):
Comparison of Inventory and Safety Stock
Ratio is calculated as follows:
Ratio= Inventory Days of Cover / Safety Stock in Days
This report provides a summary of the service level shortfall by customer, period, and category or demand class and can be used in gauging customer service risk.
Service level difference is calculated as follows:
Service Level Difference = Service Level – Target Service Level.
Additional reports that you can access from the Service Level Scenario Comparison report are (in alphabetical order):
Service Level Difference by Category.
Service Level Difference by Fiscal Period-Category.
Service Level Difference by Fiscal Period-Customer.
Service Level Difference by Item.
Top Service Level Difference by Customer.
The magnitude of unmet revenue by customer, category, or fiscal period can be compared across scenarios to identify the largest shortfall of revenue across these different dimensions. With this knowledge, actions can be taken to mitigate revenue risk.
Additional reports that you can access from the Unmet Revenue Analysis report are (in alphabetical order):
Top Unmet Revenue by Customer.
Unmet Revenue by Category.
Unmet Revenue by Fiscal Period-Category.
Unmet Revenue by Fiscal Period-Customer.
Unmet Revenue by Item.
This section provides an overview of the Supply Chain Sourcing page and discusses:
Supplier Sourcing.
Manufacturing Sourcing.
Transportation by Mode.
The Supply Chain Sourcing page allows the Supply Chain Risk Analyst the ability to compare supply, manufacturing, and transportation sourcing between two scenarios. To be able to compare the scenarios effectively, we limit the choice to two scenarios.
To access the Supply Chain Sourcing page:
Select the Supply Chain Risk Analyst responsibility.
Select Supply Chain Risk Management Dashboard.
Select the Supply Chain Sourcing tab.
Page-level filters are provided at the top of the Supply Chain Sourcing page. Page level filters are used to filter the results of the work areas.
The table below lists the page-level filters for the Supply Chain Sourcing page.
Filter | Description |
---|---|
Comparison Scenario | Select from a list of scenarios by which to compare to a baseline scenario. This is a required field. |
Baseline Scenario | Select from a list of scenarios to be used as the baseline. Only one scenario can be selected. This is a required field. |
Fiscal Year | Select from a list of fiscal years. Multiple years can be selected. This is an optional field. |
Category | Select from a list of item categories. Only one category can be selected. This is an optional field. |
Supplier sourcing can be compared across different scenarios to analyze overall distribution of purchasing dollars across suppliers and can provide visibility to highlight an unbalance allocation of supplies across suppliers.
Table and chart views allow you to view the supply distribution by supplier.
Additional reports that can be accessed from the Supplier Sourcing reports are (in alphabetical order):
Purchasing Cost by Category.
Purchasing Cost by Fiscal Period.
Manufacturing sourcing can be compared across the different scenarios to analyze the overall manufacturing cost distribution across the different organizations.
Table and chart views allow you to compare the manufacturing sourcing by plant for each scenario.
Additional reports that can be accessed from the Manufacturing Sourcing reports are (in alphabetical order):
Manufacturing Volume by Category.
Manufacturing Volume by Fiscal Period.
Comparison of transportation modes can be analyzed in this report to assess the amount of transportation dollars allocated to a specific mode.
Table and chart views allow you to compare the transportation cost by mode for each scenario.
Additional reports that can be accessed from the Transportation by Mode reports are (in alphabetical order):
Transportation by Category.
Transportation by Source-Destination.
Transportation Cost by Item.
Primary reports are located on the three tabs in the Supply Chain Risk Management Dashboard. Secondary reports are reports that you access from the primary reports.
The table below list secondary reports for the Supply Chain Risk Management Dashboard in alphabetical order.
Report Name | Measures or Facts | Dimension or View by |
Carrying Cost by Category | Carrying Cost | Scenario, Fiscal Period |
Carrying Cost by Fiscal Period | Carrying Cost | Scenario, Fiscal Period |
Carrying Cost by Item | Carrying Cost | Scenario, Fiscal Period |
Carrying Cost by Organization | Carrying Cost | Scenario, Fiscal Period |
Comparison of Inventory and Safety Stock by Category | Inventory Value, Inventory Days of Cover, Inventory Quantity, Safety Stock (units), Safety Stock (Days), Ratio (Inventory Days of Cover / Safety Stock in Days) | Category |
Comparison of Inventory and Safety Stock by Organization | Inventory Value, Inventory Days of Cover, Inventory Quantity, Safety Stock (units), Safety Stock (Days), Ratio (Inventory Days of Cover / Safety Stock in Days) | Organization |
Consensus Forecast by Fiscal Period | Consensus Forecast | Fiscal Period |
Constrained Forecast by Fiscal Period | Constrained Forecast | Fiscal Period |
Cost by Resource | Resource Cost | Resource |
Excess Details by Category | On Hand, On Order, Demand within Excess Horizon, Excess On Hand, Excess On Order, Total Excess, Excess On Order (value), Excess On Order (value), Total Excess (value) | Category |
Excess Details by Organization | On Hand, On Order, Demand within Excess Horizon, Excess On Hand, Excess On Order, Total Excess, Excess On Order (value), Excess On Order (value), Total Excess (value) | Organization |
Fixed Cost by Organization | Fixed Cost | Organization |
Fixed Cost by Period | Fixed Cost | Fiscal Period |
Inventory Turns by ABC Class | Inventory Turns | Item |
Inventory Value by Category | Inventory Value | Category |
Inventory Value by Organization | Inventory Value | Organization |
Items Single Sourced | Order Quantity | Item |
Manufacturing Cost by Fiscal Period | Manufacturing Cost | Fiscal Period |
Manufacturing Cost by Organization | Manufacturing Cost | Organization |
Manufacturing Volume by Category | Manufacturing Volume | Category |
Manufacturing Volume by Fiscal Period | Manufacturing Volume | Fiscal Period |
Margin by Fiscal Period | Margin | Fiscal Period |
Margin by Organization | Margin | Organization |
Obsolescence Details by Category | On Hand, On Order, Demand within Obsolescence Horizon, Obsolete On Hand (value), obsolete on-order (value), Total Obsolescence (Value) | Category |
Obsolescence Details by Organization | On Hand, On Order, Demand within Obsolescence Horizon, Obsolete On Hand (value), obsolete on-order (value), Total Obsolescence (Value) | Organization |
Postponement by Category | Carrying Cost, Carrying Cost without Postponement, Safety Stock, Safety Stock without Postponement, Carrying Cost Savings, Safety Stock Savings | Category |
Postponement by Organization | Carrying Cost, Carrying Cost without Postponement, Safety Stock, Safety Stock without Postponement, Carrying Cost Savings, Safety Stock Savings | Organization |
Purchasing Cost by Category | Purchasing Cost | Category |
Purchasing Cost by Fiscal Period | Purchasing Cost | Fiscal Period |
Purchasing Cost by Item | Purchasing Cost | Item |
Purchasing Cost by Organization | Purchasing Cost | Organization |
Purchasing Cost by Supplier | Purchasing Cost | Supplier |
Resource Utilization by Fiscal Period | Resource Utilization | Fiscal Period |
Resource Utilization by Organization | Resource Utilization | Organization |
Resource Utilization by Resource | Resource Utilization | Resource |
Revenue by Category | Revenue | Category |
Revenue by Customer | Revenue | Customer |
Revenue by Fulfillment Organization | Revenue | Fulfillment Organization |
Revenue by Item | Revenue | Item |
Revenue by Organization | Revenue | Organization |
Service Level Difference by Category | Service Level Difference | Category |
Service Level Difference by Fiscal Period-Category | Service Level Difference | Category, Fiscal Period |
Service Level Difference by Fiscal Period-Customer | Service Level Difference | Customer, Fiscal Period |
Service Level Difference by Item | Service Level Difference | Item |
Shutdown/Startup Cost by Period | Shutdown/Startup Cost | Fiscal Period |
Single Source Count by Category | Number of Items Single Sourced | Category |
Single Source Count by Organization | Number of Items Single Sourced | Organization |
Startup/Shutdown Cost by Organization | Startup/Shutdown Cost | Organization |
Supplier Utilization by Fiscal Period | Supplier Utilization | Fiscal Period |
Supply Value by Category | Supply Value | Category |
Supply Value by Item | Supply Value | Item |
Supply Value by Source Organization | Supply Value | Source Organization |
Top – Days of Cover by Item | Days of Cover | Item |
Top Service Level Difference by Customer | Service Level Difference | Customer |
Top Supplier Item Utilization | Supplier Utilization | Scenario, Customer |
Top Unmet Revenue by Customer | Unmet Revenue | Customer |
Total Demand by Category | Total Demand | Category |
Total Demand by Customer | Total Demand | Customer |
Total Demand by Fiscal Period | Total Demand | Fiscal Period |
Total Demand by Item | Total Demand | Item |
Total Supply by Category | Total Supply | Category |
Total Supply by Fiscal Period | Total Supply | Fiscal Period |
Total Supply by Item | Total Supply | Item |
Transportation by Category | Transportation Cost | Category |
Transportation by Source-Destination | Transportation Cost | Source-Destination |
Transportation Cost by Fiscal Period | Transportation Cost | Fiscal Period |
Transportation Cost by Item | Transportation Cost | Item |
Transportation Cost by Lane | Transportation Cost | Lane |
Transportation Cost by Ship Method | Transportation Cost | Ship Method |
Unmet Revenue by Category | Unmet Revenue | Category |
Unmet Revenue by Customer | Unmet Revenue | Customer |
Unmet Revenue by Fiscal Period | Unmet Revenue | Fiscal Period |
Unmet Revenue by Fiscal Period-Category | Unmet Revenue | Category, Fiscal Period |
Unmet Revenue by Fiscal Period-Customer | Unmet Revenue | Customer, Fiscal Period |
Unmet Revenue by Item | Unmet Revenue | Item |