Business System Rejuvenation

 

Are you exploiting your system to the full?

 

Objective of this paper

The objective of this paper is to show how any Oracle implementation can be improved significantly once the initial implementation has bedded down. Many improvements can be made at little cost but with significant benefit. They can also act as a catalyst for further ideas. Examples of how the process can work in practice have been taken from work carried out at Ortho-Clinical Diagnostics at Cardiff, manufacturers of Immunodiagnostic products for highly advanced blood testing systems. The study shows how an effective rejuvenation programme can be achieved through the use of a good balance of internal and external resources along with sound product knowledge, skilled resources and desire to make more effective use of the Oracle software and to improve business performance. Although the paper focuses on the manufacturing and operations areas of the business, all areas of the business can take benefit from the approach outlined.

 

Background

There is no doubt that Oracle is a very powerful system. It has a range of features that enable most business activities to be modelled. However at the time of implementation timescales are usually very tight, consultancy is very focussed on the essentials and users have very limited experience of the system. Many of the ‘nice to have’ features of the system are parked at the time of implementation either deliberately or are just squeezed out as the dreaded go live date rushes headlong towards us. How often do we utter such worthy statements as:

 

‘When we have more time we must revisit our MPS policies’

 

‘This forecasting looks as if is really could be useful to us’

 

‘Once we’ve got past implementation we must ‘think lean’ and start to simplify the business’

 

The list is endless, and many further opportunities are never even identified. But it doesn’t really matter, because we would never get round to implementing many of our ideas since we are always busy and there is always some thing else that is perceived to be more important.

 

As a result many organisations continue to operate a very one-dimensional system that takes the business no further that the previous system despite the major investment in hardware, software, consultancy, support and time.

 

What stops us?

 

In order to facilitate effective change in anything we do in life we need to put three elements in place

 

o       Knowledge

o       Skill

o       Desire

 

If we consider these elements with reference to rejuvenating our implementation then, in many organisations, we would struggle to make any headway. Knowledge is limited to the experiences we have. If our implementations have been very focussed on achieving an on time implementation that causes minimum disruption to the business then many of the ‘nice to have’ but at the same time exciting opportunities to enhance business practice will have either been forgotten or, more likely, not even been offered as an option. The practitioners and experts in the business come and go and often the status quo is accepted as the way to operate. We have to find an effective way of developing system knowledge of our users, as without it we have no chance to make effective change.

 

Even if we have the knowledge we may not have the necessary skills to facilitate the change. Skill is required to implement proposed changes and to sell the concepts and ideas. Skill can be developed or procured, but is very difficult to develop on an individual basis without external help.

 

The final piece in the jigsaw is the hardest one to attain. There has to be a desire to make the changes. While living in the comfort zone is not particularly exciting, is does offer no threat. The philosophy of ‘if it’s not broken then don’t fix it’ will not loose you your job but neither will it save the business money, cut out ineffective practice, reduce your inventory, shorten lead times, improve communication ………..

 

The desire for change comes from within. Unless you have enlighten and enthusiastic support for moving the business forward then the process of introducing a rejuvenation program will become an extremely fruitless and frustrating exercise. It must always be remembered that systems complement business practices. You don’t impose change by using different parts of the system. You must first perceive a need for improved practices and evaluate the effect of change. It must provide tangible benefit that simplifies, reduces cost and speeds up current practice. The selling of the ideas, concepts and improvements is the key to gaining a ‘buy in’ at the right level in the company.

 

If you can identify the way forward to satisfy the demands of knowledge, skill and desire then the process can begin!!! And remember, at a time when many companies are deliberating over their future systems strategies and the role that Oracle plays, it must be worth taking that extra step towards making your existing implementation more effective. It’s a far cheaper option.

 

How to proceed

Although many ideas can be generated in house it is very beneficial to take advantages of a consultant who has the rare qualities of good working knowledge of Oracle and its features, along with a breadth of experience in business consulting, with both theoretical and practical experience. The experience of others who have worked in many diverse organisations can prove invaluable when internal experience is constrained by what has been learned and developed in house.

 

There is a very simple methodology than can be adopted to facilitate change. The six step approach outlined below shows how a speedy implementation of change can be achieved. The methodology is simple but effective and provides a structure to the change process.

 

The diagnostic phase provides an opportunity to step back from the day to day business activity and to start to think about what really happens. Many practices are system constrained or are temporary solutions that have become part of the process by accident.

 

The Review stage builds on the diagnostics and looks at opportunities to move the business forward. This can involve ideas regarding the way that input data is derived or more fundamental  concepts that may change the business methodology.

 

Key control data must be reviewed on a regular basis and is often urgent need of assessment and recalculation. For example, when did you last review safety stock policies, Min Max levels, item classifications, lead times, batching policies etc.

 

Sometimes we need to look at more fundamental aspects of the way we want to operate and the system we have to support it. Here we can examine bill of material structures, planning BOMs, capacity planning, Master Scheduling techniques such as two level schedules, time fence planning, ATP, forecasting etc

 

Operationally we can look at how we use backflushing of material, labour and overhead, using work orderless completions, introducing kanbans, supplier scheduling, shop floor scheduling, using alerts etc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Once ideas have been generated they must then be evaluated. Where will the major benefits come from? What will make most impact? What can be achieved quickly to provide the project with some early impetus and recognition? This evaluation process is essential for gaining the support of leaders and decision makers in the business who rightly demand to see quantifiable gains for their investment in resource and time.

 

The evaluated ideas then need to be developed in line with the Oracle functionality. A test plan needs to be written along with test data and an acceptance test.

 

The testing can then take place. This needs to be done on a recently copied test system and a full evaluation of ‘before’ and ‘after’ must be completed and fully documented.

 

Finally, once the criteria for user acceptance has been satisfied, the end users must be trained and the accepted solution can be implemented. Business and system procedures must also be updated.

 

 

Ortho-Clinical Diagnostics Case Study

Ortho-Clinical Diagnostics installed Oracle Manufacturing 10.7 in April 1999. The implementation was typical with tight timescales and limited resources. Users accepted rather than welcomed the new system. The previous manufacturing software was MM3000 plus bespoke ease of use systems that were very user friendly.

 

Following the implementation regular meetings with users have taken place where comments and suggestions sought and acted on. An MRP Rejuvenation Project team was set up during 2000. The methodology outlined earlier was broadly followed and number of  activities were identified that would enhance the implementation and improve effectivity at the site. From this list a limited number of mini project were identified for fast track implementation. They included:

 

-                     The introduction of fixed batch quantities for finished goods items to simplify planning and routing maintenance and a check on projected inventory

-                     Use of Planning Items linked to forecasts to generate proportional demand for linking calibrator demand to kits

-                     Development of alerts for work in process booked into and out of the reject intra operation step

-                     Restructuring of routings that use multiple resources and differing shift patterns to ensure that forward and backward\scheduling produce the same start and finish dates

 

Each activity needed to be planned carefully, exploiting Oracle functionality and at times being creative in the use of flex-fields. Areas for change needed to be identified and a rigorous test plan developed and executed. Results had to be compared with expectations with all discrepancies being either resolved or accounted for. All the above activities have now been fully tested and are in the process of being implemented in the live database. It is worth taking some time to consider a couple of the projects in more detail.

 

Forecasts, Planning Items and BOMs

Blood testing kits are supplied with calibrators. A calibrator can be used to calibrate a number of the same testing kit. The calibrator is supplied free of charge, although there is real cost to the business in terms of material cost, resource cost and capacity use. In the past customers place their own orders for calibrators. It was found that forecasts for calibrators were far less accurate than forecast for kits. The use of a planning BOM linking calibrator demand directly to kit demand would remove the requirement for a calibrator forecast and make considerable savings. The proportion of calibrators to kits would be based on historical usage and market intelligence.

 

The exercise that needed to be carried out involved

 

-                     Developing a suitable template for the planning items

-                     Setting up for each blood test kit two new planning items

ABC-EUR representing the item that would receive demand based on a European forecast of demand

ABC-USA             representing the item that would receive demand based on a USA forecast of demand

-                     Creating a planning Bill of Material for each planning item

-                     Setting the BOM quantity to 1 for the kit and a relevant ration (0.21) for the calibrator

-                     Adding a cat code assigned to it held as a BOM flex-field.

 

In addition, forecasts for Europe and USA are provided electronically. The forecasts refer to a Cat Code rather than the OCD item. A request set was created to read in the forecasts, generating the item forecasts for OCD items in the correct forecast designator. Code was generated to load forecast against item where cat code is same as forecast item and forecast designator is the same as the character string if the item after the dash. For example, when loading the forecast from the USA, it would be loaded into forecast designator ‘USA’ and would load the forecast for forecast item abc123 against the item that had abc123 in the BOM flex-field and had –USA at the end of its item number. Any forecasts for calibrators were excluded.

 

Testing involved evaluating the current set up without planning BOMs examining:

 

                        Supply and Demand for Kits and Calibrators

                        Effect of demand on MRP

                        Expected inventory levels

 

Then the modifications were made to the data and support programs. The same evaluations were then made and all differences reconciled. Tweaks were made to order modifiers that were adversely affected by the planning proportions for calibrators.

 

The exercise was fully documented and sanctioned for full implementation. It was successfully introduced a few weeks later. There were however a couple of surprises that should have been picked up during testing. Planning time-fences in the test system were by coincidence the same for the kits and calibrators. In the live system these had been changed and the demand for kits and calibrators were offset by the difference between the two time fences. This could have been detected earlier if a more recent copy of the database had been used. The second issue was that the planning items came up in the Planned Order Reports. A small modification was made to resolve this.

 

Preparing Routings for Scheduling

One of the features in Oracle routings is that you can develop operations, resources and shifts so that a fairly detailed work plan can be created. A discrete job can be scheduled backwards from a date and time to give a planned start date and time. If this planned start date is then used to reschedule the job forwards then unless you operate exactly the same shift pattern across all resources used in that job, you will invariably find that the calculated completion date is not the same as the original completion date.

 

Does this matter? If then operation scheduled start times are important then the answer is yes. If the dates that the operation are planned to start are different then again the answer is yes. Some might argue that we are trying to do too much with the system, but by carefully restructuring the routings, satisfactory solutions were found to OCD’s predicament.

 

After much thought the following strategy provided a solution for testing:

 

• The ‘scheduled’ option on the operation was used selectively
• Two new resources called TIME and DAYSHIFT were created.
• Rules were developed dependent on whether operations were lot or item based.
• Lot based were unscheduled
• Item based were scheduled.
• The TIME resource was used to offset the preceding operation to ensure that the two operations would take place on separate days.
• DAYSHIFT was used to ‘sandwich’ resources used on an operation or series of operations to ensure that they were all scheduled for the same day.
• Operations that were ‘sandwiched’ were unscheduled.
• Shift start and finish times were carefully synchronised to provide the icing on the cake

 

The solution was tested, amended and retested, documented and is now in the process of being implemented across the board. The result will ensure that manufacturing resources and work in process is synchronised with the MPS and MRP requirements.

 

Conclusion

No implementation is perfect. Constraints at the time of implementation ensure that this is the case. You don’t buy a house and just live in it – its requires maintenance which sometimes requires professional advice. Don’t let your Oracle system suffer from neglect. The world is changing, so must your systems and the way that you use them if you are to retain any competitive edge.

 

• Revisit your implementation
• Invest in it
• Exploit the strengths of Oracle
• Excite your users by offering them more
• Review your data
• Review your policies
• Review your processes
• Think ’lean’