Overview
Birlasoft transforms demand management and supply planning with Oracle Cloud to enhance supply chain outcomes for a global Oil & Gas equipment manufacturer.
Oil and Gas (O&G) supply chain operations are complex. When these operations span multiple countries and geographies, oil and gas companies find it even more difficult to orchestrate their supply chains effectively.
Our client, a leading worldwide provider of materials used in O&G drilling, production operations, and oilfield services with operations spanning 600+ locations across six continents, was experiencing acute challenges that impeded reliable supply chain outcomes. The organization lacked a demand planning process for sales, and its planning and ordering processes were fragmented. This made it difficult to provide accurate promise dates to customers.
To mitigate these challenges, the client engaged Birlasoft to transform the digital systems and processes underpinning its supply chain operations. Birlasoft collaborated with the client to deploy and help them adopt Oracle Supply Planning Cloud, Demand Management Cloud, and Global Order Promising. In addition, Birlasoft also migrated Oracle Transport Management and Global Trade Management to the Cloud while developing turnkey solutions to drive accurate demand and supply planning.
The engagement enhanced organizational productivity, improved supply chain reliability, and inventory management outcomes across the client’s global operations. See the details of this engagement below.
The Challenge
1. Missing demand planning processes for internal, external, and spare parts
The client needed a systematic and standard demand planning process to manage both internal and external sales, as well as spare parts. The lack of a streamlined demand planning system typically leads to inaccuracies in forecasting and inventory management, impacting the organization’s ability to meet customer demands on time.
2. Lack of a centralized supply chain planning function
The client needed a systematic and standard demand planning process to manage internal and external sales and spare parts. A lack of a streamlined demand planning system typically leads to inaccuracies in forecasting and inventory management, impacting the organization’s ability to meet customer demands on time.
3. Inability to provide accurate promise dates
Due to fragmented supply planning and demand management workflows, the client was finding it difficult to provide accurate promise dates to its customers. Inaccurate promise dates typically lower customer satisfaction and trust, affecting revenue opportunities in the future.
The Solution
Based on Oracle Cloud solutions, Birlasoft delivered comprehensive capabilities to support key supply planning and demand management processes. Here are three key components of the implemented solution.
1. SKU Categorization for Supply Chain Planning
To support accurate supply chain planning, Birlasoft devised a Stock Keeping Unit (SKU) categorization solution that focused on planning only critical sub-assemblies and components at all levels based on consensus forecasts and true demand.
The SKU categorization solution leveraged the BOM of low-runner parent objects to derive and populate forecasts of critical components. This solution reduced inventory levels and drove more optimal supply planning based on granular data.
Based on actual sales orders, the solution applied consensus forecasts only for critical sub-assemblies and critical components of low-runner end products and planned non-critical components and low-runner end items. This ensured accurate demand forecasting and efficient inventory management.
2. Demand planning based on leading economic indicators
Oil and Gas demands are strongly linked to fluctuations in leading economic indicators. Birlasoft exploited its extensive domain expertise to build a reliable demand planning solution that accounted for these indicators.
The solution applied a top-down market basket analysis approach to create a composite leading economic index using the indicators. The leading economic indicators selected to create this index include crude inventories, rig count, container rental index, refinery use and production, import-export and trade data, and general indicators like CPI and GDP.
By leveraging this solution, the demand planning teams were able to create more accurate demand forecasts, enabling the production and sales teams to act in sync with market conditions.
3. Excess Inventory Redistribution (EIR) solution based on Oracle PaaS
Birlasoft deployed its Excess Inventory Redistribution solution, which runs on Oracle PaaS, to facilitate the optimal use of excess inventory. The solution leverages supply planning and demand planning data from across the business units to bring visibility into excess inventory.
This data is leveraged to enable rule-based material distribution, which ensures that excess inventory across the organization’s network is used optimally. This rebalancing reduces waste, promotes lean inventories, and enhances supply chain outcomes across all facilities.
Benefits Delivered
The supply planning transformation initiative enabled the client to achieve more resilient and reliable supply chain operations. Here are the key strategic and operational benefits that the client realized by engaging Birlasoft to lead this initiative:
- Improved supply chain reliability: Oracle Supply Planning Cloud enabled more reliable master production schedules and endowed improved agility, allowing the client to replan quickly.
- Enhanced capacity planning: The solution provided comprehensive capacity planning capabilities, enabling the client to effectively balance production lines with demand.
- Increased productivity with automation: Oracle Cloud modules enabled automation and deployment of user-friendly processes, like KPI-based planner dashboards and simulations for various scenarios, which led to productivity gains.
- Improved inventory management: The SKU categorization solution reduced inventory levels by segregating demand for low-runner and high-runner items.
- Increased demand planning accuracy: Using leading economic indicators for demand planning improved forecast accuracy, aligning the operations with market trends and economic conditions.
- Optimal inventory redistribution: The EIR solution optimized the use of excess inventory, re-balancing stock across the network to reduce waste.
The client now runs its supply chain operations on a modern IT platform with continuous quarterly updates and new functionalities. This lowered the technical debt and ensured the solution remained current and efficient.
Talk to our experts to discover how we can partner to transform your supply chain operations.
