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Highlights of Airbus’s Digital Control Room for Supply Chain Management

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As noted in our previous commentary, Supply Chain Matters has featured a number of blog commentaries highlighting the various supply chain management accomplishments and challenges related to the commercial aircraft industry. Current unprecedented, multi-year customer order backlogs for new aircraft are having an effect on the entire aerospace industry supply chain ecosystem. The need for commercial aircraft manufacturers to ramp-up their supply chains to support unprecedented levels of production volumes continue to provide unique challenges for this industry.  Airbus Mobile Alabama Manufacturing Facility

This week, this Editor attended the Council of Supply Chain Management Professionals (CSCMP) annual conference. Besides having the opportunity to moderate a highly informative and industry focused panel discussion co-sponsored by The Washington Post and Ryder (more background and commentary forthcoming in a future posting), we did manage to take in some rather noteworthy educational sessions.

One session that stood out for this author was: Digital Control Room for Supply Chain Management, which described the development and ongoing operation of Airbus’s Supply Chain Control Room. Having featured so many prior commentaries related to Airbus’s ongoing product development, manufacturing and supply chain activities, this presentation, delivered by James Snow, Director of Supplier Management and HO Supplier Development, provided us one of the key tenets that helps Airbus to successfully scale-up its manufacturing and supply chain activities.

Snow described the Airbus Digital Control Room as the heartbeat of the Airbus supply chain, providing a singular information and resolution control hub to manage any issues occurring across the multitude of multi-tier suppliers that support Airbus’s production volumes.

Airbus currently delivers a new aircraft, on average, every 7 hours among 11 owned production facilities and 8 final assembly lines, and the need for a singular control mechanism to coordinate, resolve and communicate status information across a truly global based supply chain is clearly evident. The effort kicked into high gear when Airbus began program preparations for the new A350 aircraft introduction and ramp-up. Last year Airbus completed delivery of 14 A350’s, while 29 are planned for completion this year. Airbus has plans to eventually ramp A350 production to 13 per month.

The control center is described as a combination supplier mapping and a singular control mechanism where multi-functional teams come together to ensure that Airbus’s supplier and other management teams are focused on the same set of issues. Its evolution was a visual paper “war room” concept which many of our production management readers can well relate to. In 2014, Airbus’s top 80 suppliers were monitored for performance and capacity risks. During 2015-2016, the effort was expanded to include the entire supply chain, along with the need to enable and control activities in a digitally supported environment. Today, the supply chain control center serves as the overall focal point of the supply and production demand network, a singular control point for supplier issues managements, and a mechanism available for Airbus senior management to monitor, resource and report on current production performance.

From our lens, one of the more fascinating learning’s derived from Airbus’s efforts in this area was the application of technology.  The overall technology scope was described as not one of a big-bang program deployment of the most sophisticated technology but rather one of continuous, agile rapid development utilizing standardized software applications.

The process calls for every Airbus supplier to have a common identifier supported by the capturing of rapid scan health checks for each supplier. Suppliers tracked are multi-tiered, extending to the level of tier four suppliers, as one cited example, including bathroom counter tops. These rapid scans include overall capacity status, known supplier issues as well as issues that may be caused by Airbus itself as a customer. Eight core supplier skills are monitored on a continuous basis. Any supplier issues are managed with clear action plans that are recorded, monitored and made visible.

More importantly, a process is enforced where the supply chain control center serves as the single source for Airbus management teams to coordinate and report supplier capabilities and maturity, industrial capacity and any supplier risks. Color coding is utilized to rank various supplier and/or Airbus issues and to focus Airbus’s supplier management teams on the most critical or rear-term issues needing resolution. Supplier management teams are described as now spending more of their time directly at supplier sites working on these key issues as opposed to internal management reporting and update meetings.

Articulated major benefits are teams focused on real problems and assisting suppliers with resolving their challenges. Further described is global transparency and trust among internal and external teams with early warning to issues that can impact Airbus. Once more, every level of management has identified levels of responsibility related to certain supplier issues.

An unexpected benefit was described as this tool serving as an archive of prior product design or component engineering issues and as a foundational data store to be able to more reliably predict degradation of key performance indicators. That will likely serve as a future basis for mining supply chain intelligence and more predictive analytics capabilities than can better anticipate supplier challenges down the road.

The more we heard, the more this supply chain control center sounded as a mechanism to support and serve the executive level sales and operations planning process that exists among many manufacturers.

Moving forward, Airbus has plans to enhance supply chain control center functions with mobile-based user enhancements along with making this tool available to other functions such as manufacturing engineering, product development, contracts management and customer support.

Key learning and success factors experienced by Airbus in the use of this tool is that transparency builds trust. Initially, the fear of yet another reporting mechanism hindered initial broad deployment efforts but as the control center began to remove duplicate reporting, acceptance was gained.  The Airbus supplier management team placed the development focus on process and people first, with technology serving as the adapting or best enabling support tool. Strong management endorsement and use of the tool was important as well. Another key learning articulated was that low cost and low tech approaches can work when coupled with continuous, incremental phased development.

Airbus’s Supply Chain Digital Control Room development was sponsored by CSCMP as one of six selected finalists in the organization’s 2016 Supply Chain Innovations of the Year recognition award.  Judging from what we observed, Airbus has implemented unique innovation in the management and control of supply-chain wide visibility and to supplier management ramp-up and issue resolution needs without the need for a elongated big-bang technology-driven deployment.  We thank Airbus for allowing this capability to be shared at this year’s CSCMP event.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Supply Chain Matters Highlights of Oracle Open World 2016 Conference- Summary Impressions

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This Editor once again attended the Oracle Open World conference in San Francisco this week and Supply Chain Matters has been publishing impressions throughout the week. As a reference, our prior blog commentaries included: oracle_ow16_sized450

Highlights of Oracle’s Q1 FY17 financial performance last week leading-up to OpenWorld

Our initial on-site Commentary One posting highlighting Larry Ellison’s opening keynote.

Our Supply Chain Matters Commentary Two posting addressed reported uptake of Oracle SCM Cloud from last year’s announcement.

Our Supply Chain Matters Commentary Three posting explored the interrelationships among Oracle ERP Cloud and Oracle SCM Cloud, as well as highlighted announced future pipeline releases planned for SCM Cloud.

Our Supply Chain Matters Commentary Four posting highlighted the key messages from Larry Ellison’s second keynote, specifically implication of the release of Oracle Database Cloud.

In this our final on-site commentary, we share summary impressions, insights and takeaways for our readers and clients.

This Editor and analyst has been attending Oracle’s annual OpenWorld customer conferences on an off and on basis for well over a decade.  During that time span, I have observed lots of changes concerning Oracle from organizational, technical and customer applications perspectives.  Some to the good, some not so. That has been the context of our coverage of this and past annual OpenWorld events.

During this year’s as well as last year’s conferences, Oracle senior executives reminded attendees that it has taken this company ten years to reach its vision of Cloud based IT technologies and software-as-a-service (SaaS) applications. The results of that ten-year effort are now manifesting themselves in the blizzard of new Cloud based product and platform announcements that continue to unfold every year.  It is now difficult for customer’s to be able to keep-up.

I can well remember when the Oracle Fusion initiative was first introduced, and there were no initial indications of the length of the journey, only the breadth of the vision and the scope of the endeavor.  Indeed, the vision was bold, and to Oracle’s credit, it was not watered down when the challenges grew deeper. The effort took on a holistic approach to include infrastructure, database as well as applications dimensions.  Few enterprise technology companies have been able to execute such a breadth of technology.

More importantly, Oracle’s adopted a business and industry focused lens, one that could specifically respond to the overriding businesses challenges that enterprise, business and functional organizational focused technology needed to address and solve. This was an area where Co-CEO Mark Hurd plays a valuable role in his role-based articulating of the C-Suite challenges of business in so many industry settings and how IT must be able to respond to such challenges.

Such challenges include various multi-vendor based legacy ERP backbone customers who felt hobbled in their ability to ever be able to take advantage of the next generation of technologies because of the realities that upgrading was far too disruptive to existing business processes, would take far too much time and be far too expensive. Legacy ERP includes tendencies to have added too much business unique customization that provided more obstacles to overcome in adoption of newer technology.

As many technology authors and visionaries have pointed, in the prior era of ERP implementations, systems integrators were making the bulk of the initial money while ERP providers themselves gained sustaining revenue streams related to annual maintenance of systems that in essence, get the basic job done but add little to needs for more business agility, adaptability and revenue growth.

Oracle’s journey has been directed at developing a holistic Cloud based technology approach that can address IT as well as business cost control and margin challenges. It very much includes engineering based systems approach, as was often articulated by Larry Ellison himself. For our readers, that implies that Oracle’s target is to sell technology to senior leadership levels of businesses, as well as to IT or functional teams.

At the same time, the journey has led Oracle to bring along a host of other different traditional licensed application suites such as JD Edwards, E-Business Suite, Advanced APS, Siebel, Demantra, Agile, G-Log and many others. To its credit, Oracle did not stop ongoing development nor customer support programs in its own traditional suites, new acquisitions or long-time applications.  That afforded customers the peace of mind to determine which technology paths they wanted to pursue, at their own timeframes, as opposed to ‘it is my path to the Cloud or on your own’ approaches that some technology vendors tend to influence.

In its most recent financial performance briefing for analysts and investors, Oracle executives indicated that while the bulk of its installed based software applications customers have yet to make their decisions to move to Cloud based adoption models, many have begun an overall assessment strategy. At this year’s event, some executives’ views indicate a ten-year window, some view it as far less. Oracle has rightfully provided multiple paths, while assuring that legacy behind-the-firewall applications will be supported.

Many of the new early adopter customers of Cloud based platforms and applications have done so for specific business motivations, many with common themes of shedding legacy IT infrastructure costs with the ability to make more manageable technology leaps. Some view the Cloud as another form of leasing technology, or a computing utility platform that flexes with the needs of business or supply chain. That has been the declared surprise to the current momentum.  The upside has built-in momentum if Oracle continues to execute as it has done up to now, both in internal development and external acquisition.

Today there are some key new Oracle faces in senior leadership roles of development, sales and other areas while the company manages to continually balance new and seasoned experience and vision. While the bravado of the prior Oracle sometimes shows, it is now accompanied by a discernable shift toward being more customer and services focused. That includes adoption of practices directed at providing customers with what is described as zero-hassle buying, allowing more customers to try before they buy, and yes, less expensive pricing. Customer engagements are now assigned an executive sponsor for monitoring and customer feedback.

Over these past ten years, a lot has changed, most toward the better.  Today’s Oracle is one of momentum, continuous innovation and perhaps a dose of fast follower.  We continually observe this with every subsequent OpenWorld.

With the pending acquisition of NetSuite, and that of other acquisitions such as LogFire, Oracle is indeed increasing its momentum in offering a more business compelling and flexible path toward Cloud based ERP, data management, analytics and supply chain focused applications.  Indeed, acquiring 2800 Oracle ERP Cloud customers might well be just the beginning of this momentum. Oracle SCM Cloud will continue to be the recipient of that momentum as will Oracle Procurement. This Editor previously cited Oracle’s SCM development team for its slow pace toward the Cloud, but as noted in our prior commentary, we now observe that the pace of innovation is now accelerating.

Last year and again this year, Mark Hurd’s classic prediction was that by 2025, there will be but two enterprise technology vendors controlling 80 percent of the SaaS technology market.  Last year, we viewed that prediction as stick to the wall wishful.  This year it is beginning to look more likely that Oracle will indeed one of the few enterprise technology vendors that got it right.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Supply Chain Matters Highlights of Oracle OpenWorld 2016 Conference- Commentary Four

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This Editor is once again attending the Oracle Open World conference here in San Francisco and Supply Chain Matters is publishing impressions throughout the week. As a reference, our prior blog commentaries included:

Highlights of Oracle’s Q1 FY17 financial performance last week

Our initial on-site Commentary One posting

Our Supply Chain Matters Commentary Two posting.

Our Supply Chain Matters Commentary Three posting.

On Tuesday, Oracle icon Larry Ellison delivered his second keynote and he did not disappoint the conference and live online audience regarding grabbing attention. His two key themes for his second keynote were advances in Cloud based database technologies as well as Cloud infrastructure.

Ellison reiterated to the audience that Oracle database technology has transitioned through three major transitions of computing starting with the original RDBMS that ran on Digital Equipment technology, through iterations of client-server and Internet technology, and now a complete transition to the Cloud. By formally announcing Oracle Database 12C Release 2 for the Cloud, Oracle is literally throwing down the gantlet in direct dead-to-head competition with Amazon Web Services (AWS) as well as all other database technology providers. As a means of reference context for many of our supply chain functional readership, AWS is the IT hosting platform service that Amazon provides, and many software technology firms utilize AWS for hosting.

Two of the compelling technology features of this new database application beyond its Cloud native platform is increased support for multi-tenancy, allowing up to 4000 databases to be managed as one.  What that implies is the potential for dramatically lower database maintenance needs as well as increased opportunities for added automation of database management and backup. Ellison flatly declared that this new release should dramatically lower business costs and make database administration far simpler. The other compelling feature is greatly enhanced in-memory capabilities for columnar store along with Active Data Guard services. With the features and functions of this native Cloud Oracle database release, IT teams should have the flexibility to host databases on the Cloud, as well as on premise, with the ability to interchange at any time. The on premise database is claimed to be technically, the exact same as that within the Cloud.  Both will be provided with the data security and encryption capabilities that Oracle claims is industry leading.

Most of Ellison’s remaining keynote was a litany of direct citing of current performance benchmarks of Oracle database performance in response time, transactional and OLTP loads in direct contrast to AWS performance.  He challenged Amazon to respond if they disagreed with Oracle’s analysis.  Tech bluster aside, SAP ERP, supply chain, as well as other best-of-breed software users should focus on the fallout and implications of Oracle’s announcement this week.

From our lens, make no mistake, this will once again change the competitive dynamics and technical performance options for the database market.  With supply chain and product management applications so data and transactional centric, database technology advancements are key enablers.  The market is already benefitting from newer in-memory database performance capabilities and the performance potential now increases. More importantly, Cloud based and enhanced multi-tenancy opens up more profound opportunities for the savings in overall IT hardware and software investment, deployment and ongoing support costs.  Oracle further provides rather strong arguments for not getting locked-in to specific database platforms but rather adopting database technology that can run in any Cloud platform, ERP focused or otherwise.  We therefore urge our functional readers to check-in with your respective IT and database technical support teams to ascertain their viewpoints and perspectives regarding this latest database technology related announcement by Oracle.

The most significant gauntlet of this week’s announcement is whether Oracle with now drive more aggressive overall pricing for its new Cloud based database.  To take advantage of the OpenWorld opportunity, an entry level version of its Cloud database, claimed to have significant technical features was announced as $175 per user. That may be an example of new and more customer friendly approach that Oracle executives declared during OpenWorld but the proof resides with consistent customer application of such practices.

If Oracle does reduce overall pricing in database technology, it will have market-wide implications. From this author’s view, it implies longer-term lowered cost and improved data analysis performance for supply chain planning, sales and operations planning, analytics and more demand-driven analytics needs.

In our next commentary, we will address summary observations and our takeaways from this year’s event.

Stay tuned to our continuing coverage of Oracle OpenWorld 2016.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Supply Chain Matters Highlights of Oracle OpenWorld 2016- Commentary Three

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This Editor is once again attending the Oracle Open World conference here in San Francisco and Supply Chain Matters is publishing impressions throughout the week. As a reference, our prior blog commentaries included:

Highlights of Oracle’s Q1 FY17 financial performance last week

Our initial on-site Commentary One posting

Our Commentary Two posting.

In previous commentaries we observed that Oracle has been sharing the customer uptake counts for Oracle HCM Cloud and Oracle CX Cloud. While there was again specific mention of Oracle SCM Cloud (Oracle’s complete suite of Cloud based supply chain management and manufacturing applications) there was no customer data shared from the podium in Larry Ellison’s opening keynote. Our Commentary Two echoed customer uptake statistics shared by senior Oracle SCM executives.

We advise our readers to take context to the stated current total of 1090 Oracle SCM Cloud customers since there is the possibility of some double-counting of customers among ERP Cloud and SCM Cloud. Our on-site discussions yesterday indicated that SCM Cloud may be benefitting from the ongoing momentum of 2800 customers embarking on various applications within Oracle ERP Cloud. Development executives for Cloud ERP indicated to independent analysts that one of the current primary motivations for movement toward ERP Cloud is to undo many years of backbone systems customizations that have occurred, leading to increased maintenance and IT support costs. While the majority of on premise deployed Oracle E-Business customers remain with current deployments, Oracle executives indicated building customer inquiries and discussion reflecting on how they can take advantage of Cloud based deployments and the reduction of expensive and complex customizations. As those efforts continue towards Cloud deployment, it obviously opens up on-ramps to SCM Cloud to fill-in potential business process gaps. Oracle SCM executive Jon Chorley indicated that current active on-ramps to SCM Cloud have been early customer’s election to adopt indirect procurement, product innovation management, transportation and global trade management. Oracle SCM executives articulate such motivations towards Cloud as either:

  • Operational excellence
  • Innovate at the edge
  • Divisional level modernization (termed two-tier ERP)
  • Complete transformation to Cloud deployment model

The above stated, we did observe that the release pipeline for SCM Cloud is accelerating from previous levels.  First, SCM senior vice president Rick Jewell flatly indicated that the majority of Oracle’s development resources will be dedicated towards a continuous Cloud based applications development environment. Releases in the pipeline for 2017 include:

Supply Chain Collaboration Cloud, an application focused on supporting primarily outsourced supply chain collaboration and decision support needs.

Supply Chain Planning Cloud will introduce enhanced demand management capability via Oracle Demantra, a full sales and operations planning (S&OP) support utility for supporting multiple ERP and best-of-breed systems, and the beginning of enabling Oracle APS Release 11 Planning Central functionality to be enabled by the Cloud.

Oracle Quality Cloud was described as supporting something that Oracle SCM has not done previously, introducing end-to-end quality management support and quality management best practices.

Cloud SCM Release 13 in 2017 is expected to include some form of a supply chain analytics cloud application that would include analytics-driven navigation as well as newly developed Oracle analytics technologies pre-configured to support key supply chain decision support needs.

Other areas mentioned, not specifically in timeline include abilities to support Internet-of-Things data sensing of capital equipment and the sharing of analytics directly into manufacturing and shop-floor scheduling systems,  A sophisticated on-stage demo of potential functionality was demonstrated.

Before closing out this commentary, we share some additional thoughts. If your organization remains concerned about potential shift of applications hosting to the Cloud, you are obviously not alone.  Concerns for data and information security are natural and even acknowledged by enterprise technology providers such as Oracle.  Yet, do not be close minded as to not consider the operational, decision-making and/or financial benefits that Cloud based deployments can and will ultimately provide.  The reality remains that if your organization remains conservative, industry competitors or disrupters will move to gain important competitive advantages in cost, productivity and business agility.  Therefore, keep an eye toward developments and demand that Cloud technology providers provide required information and customer deployment references. Talk to early adopters and talk to independent analysts who have knowledge of this quickly changing landscape.

Yesterday, Oracle icon Larry Ellison delivered his second keynote and he did not disappoint. His two key themes were advances in Cloud based database technologies as well as Cloud infrastructure.  It was pointed and direct, and from this author’s view, provided many longer-term implications for supply chain planning, sales and operations planning, analytics and more demand-driven analytics needs.  We will address these functional implications in our next commentary.

Stay tuned to our continuing coverage of Oracle OpenWorld 2016.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Supply Chain Matters Highlights of Oracle OpenWorld- Commentary Two

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This Editor is once again attending the Oracle Open World conference here in San Francisco and Supply Chain Matters is publishing impressions throughout the week. We began our coverage with highlights of Oracle’s Q1 FY17 financial performance last week, along with our initial Commentary One posting.

In our previous commentary we observed that Oracle has been sharing the customer uptake counts for Oracle HCM Cloud and Oracle CX Cloud. While there was again specific mention of Oracle SCM Cloud (Oracle’s complete suite of Cloud based supply chain management and manufacturing applications) there was no customer data shared from the podium in Larry Ellison’s opening keynote. We stated our goal for the remaining sessions of this year’s OpenWorld is to probe deeper on current market uptake.

Yesterday, Supply Chain Matters specifically attended the 90 minute session: Oracle Supply Chain Management and the Intelligent Supply Chain. This session featured seven people on the podium including two of Oracle’s most senior supply chain development executives. Executive vice-president Rick Jewell specifically addressed what he termed as the “state of the union of Oracle SCM Cloud.” Here are the highlights:

A current total of 1090 SCM Cloud customers was indicated. (Note: This author later confirmed with a senior Oracle executive that there is the possibility of some double-counting of customers among ERP Cloud and SCM Cloud.)

A detailed listing of current SCM Cloud applications customer uptake and entry points indicated:

  • 290 adopting inventory management
  • 200 adopting product innovation management and PLM
  • 160 adopting transportation and global trade management
  • 90 adopting order management
  • 40 adopting manufacturing and planning control

Jewel further shared current highlights of operating statistics concerning the Oracle SCM Cloud platform which included:

  • Managing 28 million product lines
  • $40 billion freight spending under management
  • 600,000 plus named users
  • 3000 plus trained partners

Also during the session, the profile of four early-adopter customers were shared and included:

  • Canadian based medical device manufacturer Profound Medical Corp
  • UK based life sciences company Abcam
  • S. based energy fuel cell provider Ballard Power Systems
  • High tech consumer electronics manufacturer Western Digital which is currently embarking on a three year deployment window of all-in for Oracle SCM Cloud

There was lots of other information shared in this session including future applications releases planned for 2017

We will cover more of this detail in other subsequent other OpenWorld dedicated commentaries.

Suffice to note at this point that Oracle is achieving some initial momentum with its Oracle SCM Cloud suite and the ongoing development cycle is accelerating.

Stay tuned to our continuing coverage of Oracle OpenWorld 2016.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


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