Oracle Process Manufacturing Statement of Direction

October 2007

Oracle Process Manufacturing Statement of Direction

Process Manufacturing is more complex and more difficult than ever before, requiring innovation and sophistication from firms wishing to be successful and dominant. The pace of business is accelerating with customers and partners expecting immediate answers and customized products. Customers, the supply chain, and competition have all become global, while compliance with regulatory requirements is now a part of everyday business. Globalization is creating relentless pressures to drive additional efficiencies, and do more with less. Superior quality and on-time delivery is necessary to provide a competitive market advantage. In the midst of all this, most manufacturing companies are faced with a myriad of different, disconnected systems on the shop floor, making it difficult to react quickly to changes on the shop floor, in demand, or in supply availability. Future releases of Oracle Process Manufacturing applications will offer new features and products designed to give anufacturers the ability to leverage Oracle applications directly on the shop floor, providing extra visibility and flexibility, while eliminating the complexity of integrating some or all of their third party systems. But additionally, for those particularly in complex or highly automated environments, Oracle will provide a next-generation Enterprise Manufacturing Intelligence (EMI) solution called Manufacturing Operations Hub that would integrate to the existing disparate plant systems and provide intelligence on top of those systems without forcing you to rip or replace them. Focus of our future investments will be on the following themes: Improved native manufacturing execution system (MES) Support for outsourced manufacturing and attribute driven manufacturing Improved R&D capabilities through tighter integrations Next generation Manufacturing Operations Hub for integration and intelligence Process industry specific planning enhancements Inventory enhancements to support lot requirements in Process industries

[Product Name] Statement of Direction

Page 2

ORACLE MANUFACTURING EXECUTION FOR PROCESS MANUFACTURING

In Release 12, Oracle began closing the gap between traditional Enterprise Resource Planning (ERP) and Manufacturing Execution Systems (MES) for Process manufacturers by adding a new product, Oracle Manufacturing Execution (MES) for Process Manufacturing, to the Process manufacturing product suite. This new MES for Process Manufacturing enables companies to improve operator efficiency, deliver real-time shop floor visibility to multiple layers of management and reduce the total cost of ownership through integrated manufacturing management and production execution. Primarily targeted for small to medium sized businesses, in low to medium automated facilities, it offers integrated production execution, enables paperless record keeping, and provides visibility to shop floor supervisors. Customers can manage all of their execution and financial information in a single, real-time database, reducing costs, data replication and risk of errors, while improving data accuracy, process repeatability and information visibility. Potential benefits include

Enforcement of manufacturing best practices with an improved touch screen operator-centric user interface for dispensing and the shop floor Lower cost of compliance and training costs Reduce manufacturing order lead time, direct labor costs and paperwork with real time data entry and device integration

Oracle will continue to invest in this important functionality in future releases, including the following:

Serialized Manufacturing Operator Certification Tighter Integration to Time and Labor Systems

Serialized Manufacturing

To improve product traceability and genealogy, many production environments require that a serial number be identified and associated with the product at either the start of production, or at a specific step within the production process. Currently, in-process serialized transactions were supported only through Mobile Supply Chain Applications. In a future release, the MES for Process Manufacturing will support this functionality by allowing operators to query one or many serial number(s) to retrieve work content information, easily record component serial information and quality results, and perform transactions. Operators will also be able to continue to use the dispatch list, which will list both serialized and nonserialized assemblies in their queue.

[Product Name] Statement of Direction

Page 3

Operator Certification

Operator Certification satisfies the regulatory requirement of FDA 21 CFR Part 211.25 for Personnel Qualification. It enables the corporation to identify the required skills and training needs, as well as certification approvals, for an Operator to perform Production activities. Operator certification is seamlessly integrated with Oracle HRMS for all needs related to skills definition, training needs and certification.
Tighter Integration to Time and Attendance Systems

Some process industries require sophisticated time and attendance tracking. To provide this capability, tighter integration to a robust time and attendance system will be added. Functionality may include a unified and streamlined clock in/clock out mechanism, streamlined resource assignments for the supervisors, complex resource allocation when a user clocks in to multiple jobs, and additional labor metrics.
ORACLE MANUFACTURING PROCESS EXECUTION

Oracle Process Manufacturing Process Execution, designed specifically for process manufacturing industries, provides comprehensive, real-time visibility and control of production. It supports management of ingredients, products, coproducts, byproducts, and resources such as machinery and labor, scaling, backflushing, dual units of measure, lots and sublots, and many other requirements of process manufacturers. Oracle Process Execution enables you to realistically model the shopfloor operations of material movement and tracking to staging area and then consumption onto a batch. Oracle Process Manufacturing Process Execution is part of Oracle Applications, an integrated suite of e-business applications for the enterprise, which is designed to transform your business to an e-business. In future releases of OPM R12, additional process manufacturing functionality will be enabled, including the following:

Support for outsourcing and toll manufacturing Make to Order Strategy for Process Manufacturing Attribute driven manufacturing Multiple Batch Groupings and Actions

Outsourcing and Toll Manufacturing

Many process manufacturers rely on third parties to perform some of their manufacturing process. This may be due to limited capacity, or because the manufacturing process requires some type of specialized processing which the manufacturing company is not equipped to do them.

[Product Name] Statement of Direction

Page 4

This is becoming a common process across all process industries, including textiles, life sciences, food and beverage, chemicals or metals. Across process industries it is required to have vertical integration with suppliers, focus on new products and product lifecycles, and tight integration of supply chains that are able to react responsively to market demand without holding inventory. The ability to model outsourcing of steps in the production process will be provided. This will be integrated to provide the ability to have a purchase order created for the outsourced manufacturing. Necessary shipping documentation will be provided. Also users will be provided with information related to material availability with their subcontract vendors as well as information related to material cost.
Make to Order Strategy for Process Manufacturing

In contrast to the Make to Stock strategy, many organizations manufacture items against specific customer orders. This is common in Food and Beverage or Metals industry. The major requirement for integrating Process Execution with Order Management is the ability to create a Production batch from a sales order and reserve the output of the production order for sales orders. This functionality allows users to create a Production order based on rules for a specific sales order. Once the production order is created and executed, the output is reserved for the said sales order, which can then be shipped. Additionally, changes to either the sales order or batch will result in notification to the interested parties, so that the order can be canceled or rescheduled or the customer can be notified of a delay.
Attribute Driven Manufacturing

In some industries, such as metals and pulp and paper, there is a need for attribute driven manufacturing. A customer may have a requirement for a unique set of attributes for a generic product. If material is not in stock that meets the customers requirements, it must be produced. Oracle Configurator will be integrated with Order Management for a Process Manufacturing Organization to enable capturing the specifications during Order capture. This specification captured will be then passed on to Process Execution to manufacture to specification. Process Execution will provide a way to create a production batch based on the customer required attributes specified on the sales order.
Multiple Batch Groupings and Actions

Process manufacturers often have the need to manage multiple, related production orders together. For example, in consumer packaged goods manufacturing

[Product Name] Statement of Direction

Page 5

environments, it is common to have a bulk material which is run on a production line, and at the end the line splits into two or more packaging lines which package the bulk material into several packaging configurations. An example of this type of manufacturing is the making of potato chips. Potatoes are processed in bulk through slicing and frying and then split to add seasonings to produce different flavors and packaging configurations. Other examples of industries that require this type of process modeling are pulp and paper, chemical, and any other industry that has a limited number of intermediate phantom items that are packaged in multiple configurations. The ability to group production orders on several criteria will be provided. These groups can be uniquely identified. Also, the ability to mass transact batches will be provided. For example, the ability to select several batches and release, complete or close them together will be provided.
ORACLE PROCESS MANUFACTURING PRODUCT DEVELOPMENT

OPM Product Development enables the formulation of products to individual customer specifications by graphically constructing recipes and simulating product costs, composition, and analytical parameters while enforcing regulatory compliance with the proper approvals, reporting, and audit capabilities.
Formula Visibility in Centralized Product Definition

To bring innovation to market quickly and profitably, the new product introduction and development process must have visibility into the full product structure to understand its composition and manufacture as well as to validate compliance to customer and market requirements. In future releases, users will have the ability to view and update formulas directly from the centralized product definition to promote quicker updates and better collaboration across functional departments such as Research & Development, Manufacturing, Sales and Marketing, Quality Assurance, and Regulatory Affairs. Users can view formulas by their status to distinguish lab vs. production formulas or active vs. obsolete formulas. Formula details such as ingredients, quantities, and multiple formula levels are available for viewing as well as editing. This interactive formula view supports formula changes, scaling, analysis, and approval without the barriers of informational and departmental silos.
ORACLE MANUFACTURING PROCESS PLANNING

Process industries have unique requirements for Advanced Planning and Scheduling tools. Advanced Supply Chain Planning has been enhanced for process industries with a number of process features. Current features supported for the process industry are Resource Charges, Complex Routings, Advanced Co-Product Planning, and Contiguous Operations (Hard Links between operations). In future releases of OPM R12, additional process planning functionality will be enabled, including the following:

[Product Name] Statement of Direction

Page 6

Support for Resource Batching Hard Pegging of supply to demand Attribute Planning Forward Scheduling independent of Demand

Resource Batching

Manufacturers must be able to ensure full utilization and efficient use of their resources. In order to do that, they must be able to gather multiple production batches being processed from upstream operations, and load them together into the same piece of equipment to be processed concurrently. OPM Planning will be enhanced to take advantage of the Resource Batching functionality that is available in Production Scheduler and Advanced Supply Chain Planning. A user will be able to go to the Plant Resource form, explicitly define a given resource as batchable, and define a minimum and maximum spot capacity and a pull forward window. Within Production Scheduler, a user can specify attributes values (such as Temperature, Color, Duration etc) which can be used to group products/batches together for processing. Production Scheduler and ASCP can then plan and schedule multiple batches in a batchable resource simultaneously.
Hard Pegging of supply to demand

Manufacturers in both the make to order and make to stock environments need to be able to peg a demand order to a supply order. This may be a one to one relationship or a one to many. Once a demand order is pegged to a supply order ASCP must maintain this hard peg.
Attribute Planning

Users need to be able to input the quantity of raw material available and plan for the optimal product mix. In addition, users need to be able to input the quality of material, using either quality grade or other attributes, and be able to plan by quantity and quality of raw material
Forward Scheduling Independent of Demand

Due to seasonal supplies, such as the harvesting of crops which will perish if not processed, raw material must be forward scheduled even though there currently is no demand. APS will plan to produce finished goods without demand (forecast and or sales orders) prior to the raw materials expiring. At times, there may be demand that will consume a portion of the raw materials however; APS must still plan to produce the balance prior to expiration.
COMMON INVENTORY

Process Inventory features and functionality are now incorporated into Oracle Inventory. Customers of Oracles Process Manufacturing applications can now use

[Product Name] Statement of Direction

Page 7

Oracle Inventory and Oracle Warehouse Management. The use of a single inventory application provides the Oracle Process Manufacturing user seamless integration with the rest of the e-Business Suite. This feature opens up additional functionality that was previously only available to Discrete Oracle Inventory users, such as vendor-managed and consigned inventory, reservations, move order requisitions, kanban, min-max replenishment and robust physical inventory and cycle counting functionality. The ability to implement Oracle Warehouse Management allows users to leverage sophisticated picking rules, license plates (LPNS), put-away rules and task management. In future releases of R12 Common Inventory, additional process functionality will be enabled, including the following: On-hand Lot Status/LPN Status Lot Genealogy Enhancements Mass Change Status for all Child Lots associated to a Parent

On-hand Lot Status/LPN Status

Lot status defines the availability of goods for sales, shipping, production and planning. In highly regulated industries there is the requirement to strictly separate the change of material status from the physical movement of material. For all industries, it is important that the movement of material not result in an accidental change of material status.
In addition to the previously existing levels of material status tracking at the subinventory, locator, lot and serial levels, a new level of material status tracking has been introduced at the inventory on-hand balance level so that a user will have the ability to: Co-mingle in the same location material of different statuses, and at the same time allowing the same lot to have different statuses in different locations. Move material without causing a change to material status without having to maintain material status at the lot level. Track material status for the contents of a LPN.
Lot Genealogy Enhancements

Enhancements have been incorporated into the Lot Genealogy form to allow the user to: Highlight a particular item lot on the genealogy tree and toggle between the Where Used and Source tabs using the highlighted item lot as the top level node in the tree structure. This allows the user to refresh the tree

[Product Name] Statement of Direction

Page 8

with a different top level node without being forced to go back to the query window. View more levels of detail in the left-side navigator window where lot branches are expanded before they are forced to scroll horizontally.

ORACLE MANUFACTURING OPERATIONS HUB

The need for accurate and timely information about product and process quality, manufacturing operations and status and performance of manufacturing assets is very well understood and realized by most industries. For too long, manufacturing has been isolated. Most of the important production data has not been easily accessible, and is therefore not very useful in improving performance. This has created the need for software applications delivering accurate and real time performance management (RPM). The solution however must takes advantage of your existing IT infrastructure, enabling you to deliver information securely over intranets, extranets, or the Internet without the need for any modifications. Manufacturing Operations Hub would help you acquire manufacturing data in realtime, establish the operating context for that data, and ensure that it is stored in a manner that makes it accessible at later times for a variety of uses. The solution would facilitate the visibility of this real-time manufacturing data to users throughout the enterprise, and includes tools for enhanced decision support and role-based display of performance against operating metrics. Events and alarms would notify all who should be informed when important or unforeseen events take place. Some of the highlights of this solution include: Generic, extensible manufacturing data model Deliver ERP Data to Plant Floor Systems Gather real-time streaming tag data, directly from equipments Contextualize streaming equipment data Provide repository of events at the plant floor level Gather transactional data from other local plant floor systems Convert plant floor data into Metrics and key performance indicators (KPIs) ISA 95 standard based integration

Generic, extensible manufacturing data model

The core component of Manufacturing Operations Hub would be a generic data model that is open and extensible to meet the requirements of different industries.

[Product Name] Statement of Direction

Page 9

The data model would leverage industry standards such as S-95 and provides a good hierarchical structure for reporting or building KPIs and metrics that can be analyzed along different dimensions. The data model would also leverage Extensible Attributes Framework that would make it open and flexible to different production environments.
Deliver ERP Data to Plant Floor Systems

The Hub would deliver data from ERP systems such as Oracle EBS to the plant floor systems and equipments. The ERP data would include master data such as Shifts, Items, Item Category, Item Costs, Resource, Resource Group, Resource Cost, and also released work orders/ flow schedules, Operations, Material Requirements, Resource Requirements and Sales order lines pegged to work orders. Customers would be able to leverage the Hub to extend the ERP data down into Plant Systems such as MES or production equipments.
Gather real-time streaming tag data, directly from equipments

The Hub is designed to aggregate real-time data directly from control systems such as PLCs, SCADA and DCS on the plant floor. The Hub would primarily utilize an OPC based connection to communicate with devices. To ensure coverage for different types of devices, we have partnered with two of the leading OPC companies- Kepware Technologies and Matrikon.. Kepware and Matrikon have built a large library of device drivers for various types of hardware found on the shop floor. In addition to their standard OPC Servers and Clients, these partners would also deliver tighter integration to Manufacturing Hub. We would also deliver an API and interface table for customers that may want to build or utilize their own connectivity infrastructure on the shop floor.
Contextualize streaming equipment data

One of the core strengths of the Hub solution would be to take highly granular tag data from devices and convert it into meaningful business data to provide reporting to business users such as Plant Managers. The Hub would provide a Contextualization engine and functionality to define business meanings and processing rules for various types of tag data. The Hub would also provide infrastructure to capture and process errors at every stage of data collection.
Provide repository of events at the plant floor level

The Hub is supposed to act as a bridge between ERP and plant floor systems. The Hub would capture events on the shop floor such as scrap or equipment down and would facilitate customers to create appropriate transactions or send notifications to individuals.

[Product Name] Statement of Direction

Page 10

Gather transactional data from other local plant floor systems

The Hub is designed with your existing plant floor systems and infrastructure. Apart from collecting real-time data directly from equipments, the Hub would also utilize metadata driven Oracle Warehouse Builder to extract data from other transaction systems such as MES, Quality etc. The Hub would also allow the user to extract data from spreadsheets.
Convert plant floor data into Metrics and KPIs

As the Hub collects real-time data from devices, most of it will be merged with data from other sources and converted into KPIs or metrics. However some of the data can also be viewed instantly on real-time dashboards to allow users to view events happening in real-time and respond to them before things go too far. The primary objective of the Hub is to bring together data from disparate sources on role based dashboards to allow Plant Managers and his staff to the manufacturing operations efficiently and effectively. We would leverage state of the art BI platform from Oracle Fusion Middleware to deliver dashboards that are easy to use and easy to personalize and modify.
ISA 95 standards based integration

With Release 12, Oracle provides the capability to integrate any MES software application to OPM following the recommendations of the ISA 95 standard. The implementation of this integration uses the Business to Machine Mark up Language (B2MML) as defined by World Batch Forum (WBF). This technology will be changed to use Enterprise Service Bus (ESB) In addition to the current integration support for Production Scheduling and Production completion, additional schemas will also be supported in the upcoming releases.

[Product Name] Statement of Direction

Page 11

Purpose
This document provides an overview of features and enhancements that may be included in a future release of Oracle Process Manufacturing. It is intended solely to help you understand the vision and direction of Oracle Process Manufacturing.

Disclaimer
This document in any form, software or printed matter, contains proprietary information that is the exclusive property of Oracle. Your access to and use of this confidential material is subject to the terms and conditions of your Oracle Software License and Service Agreement, which has been executed and with which you agree to comply. This document and information contained herein may not be disclosed, copied, reproduced or distributed to anyone outside Oracle without prior written consent of Oracle. This document is not part of your license agreement nor can it be incorporated into any contractual agreement with Oracle or its subsidiaries or affiliates. This document is for informational purposes only and is intended solely to assist you in planning for the implementation and upgrade of the product features described. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described in this document remains at the sole discretion of Oracle. Due to the nature of the product architecture, it may not be possible to safely include all features described in this document without risking significant destabilization of the code.

[Product Name] Statement of Direction

Page 12

Oracle Process Manufacturing Statement of Direction October 2007 Author: Karen Theel, Contributing Authors: Valerie Dubois, Amit Singh,Melanie Grosser, Siva Jayaraman, Elaine Wan, and Russ Bayles Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores, CA 94065 U.S.A. Worldwide Inquiries: Phone: +1.650.506.7000 Fax: +1.650.506.7200 oracle.com Copyright 2007, Oracle. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission. Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.