Giving Yourself Options Using

Oracle Assemble To Order (ATO)

Bob Collins, CFPIM, CIRM
SSI North America
Chicago, IL
August 15, 2003
Agenda
Why consider ATO?
Advantages to ATO?
Example of Oracle ATO

ATO Assemble-to-Order
A production environment where a good or
service can be assembled after receipt of a
customers order. The key components . . . used
in the assembly or finishing process are planned
and usually stocked in anticipation of a customer
order. Receipt of an order initiates assembly of
the customized product. This strategy is useful
where a large number of end products (based on
the selection of options and accessories) can be
assembled from common components.
- APICS Online Dictionary (10th Edition)
ATO Bills and . . .
Modular Bills
Planning Bills
PTO Bills (Oracle)
Hybrid Bills (Oracle)
Why consider ATO?
Options make planning and stocking
EVERY possible end item unrealistic
to impossible
Difference between customer
delivery lead time vs. procurement
and manufacturing lead time

Stock issue
When options are considered, there
may be hundreds of thousands of
end items
Potentially millions of dollars of
inventory
Many potential configurations are
never ordered
Space problems, maintenance issues
Lead Time issue
Customer delivery lead time = 4
weeks
Procure materials, fabricate and
assemble 28 weeks!
Total Lead Time
Customer
Delivery
Lead Time
MTS MTO
Total Lead Time
Customer Delivery
Lead Time
MTS
MTO
Total Lead Time
Customer Delivery
Lead Time
ATO
Total Lead Time
Customer Delivery
Lead Time
Final
Assembly
Lead Time
Subassembly Lead Time
Inventory Implications
End Items End Items
Raw Materials
Raw Materials
Inventory
Inventory
Order placed
MTS MTO
ATO and Inventory
End Items
Sub
assemblies
Raw Materials
Order placed
Inventory
Advantages to ATO
Better response time
Reduced costs
Lower inventory
Reduced number of master
scheduled and forecast items
Faster and fewer errors in order entry
Example: Computer
Computer
Options
Processor
(1 of 8)
RAM
(1 of 4)
Modem
(1 of 3)
Optical Drive
(1 of 6)
Monitor
(1 of 6)
Speakers
(1 of 3)
Printers
(1 of 7)
Hard Drive
(1 of 6)
Graphics Card
(1 of 5)
Ethernet Card
(1 of 3)
Software package
(1 of 5)
8 x 4 x 6 x 5 x 6 x 3 x 7 x 6 x 3 x 3 x 5 = 32,659,200 end items!
Maintenance Nightmare?
8 x 4 x 6 x 5 x 6 x 3 x 7 x 6 x 3 x 3 x 5 =
32,659,200 end items
OR
8 + 4 + 6 + 5 + 6 + 3 + 7 + 6 + 3 + 3 + 5 =
56 items at the option level
ATO allows you to create fewer Bills!
More advantages
Fewer Bills of Materials
Less BOM maintenance
More efficient order entry
Forecast/plan at level below the end
item
Helps isolate opportunities for
standardizing and changing the
manufacturing process.
Example
Pentium 4 Family
Level
0 ATO Model
Processors Hard Drives Monitors
ATO Option Class
1
2
1.4 GB 2.1 GB
60 GB 80 GB 120 GB
17 Flat 21 Super
ATO Items
Subassemblies
Components
.20 .60 .20
.30 .70 .40 .60
3
Planning Percentages
Planning Process
100 Pentium 4s in September
30 1.4 GB processors
70 2.1 GB processors
20 60 GB Hard Drives
60 80 GB Hard Drives
20 120 GB Hard Drives
40 17 Flat Screen monitors
60 21 Super Screen monitors
Optional/Mutually Exclusive
Optional/Mutually Exclusive
Description [ ] Mutually
Exclusive (default)
[X] Mutually
Exclusive
[X]
Optional
Choose any
number or no
options on the
option class bill
Choose one or no
options on the
option class bill
[ ] Optional
(default)
Choose at least one
option on the
option class bill
Choose one, and
only one, option on
the option class bill
Configurator
Configurator
When the order is placed, Order
Entry picks the options the customer
wants
Rules to guide Order Entry
Can reuse existing numbers if profile
option is set
Configurator Rules

E.g., Automotive Manufacturer
IF air conditioning ordered for vehicle
THEN must include tinted windshield
Configured Bill (*)
Pentium 4 Family*1234
Level
0 ATO Model
Processors Hard Drives Monitors
ATO Option Class
1
2
80 GB 21 Super
ATO Items
Subassemblies
Components
.60 .70 .60
3
2.1 GB
Creation of Configured Item
Creation of configuration bill of
material based on the model bill of
material
Creation of configuration routing
based on the model routing
Link the configuration item to the
sale order
Creation of Configured Item
Kick off the configuration item
workflow process, which completes
the following:
Lead time calculation for the configuration
item (discrete manufacturing items only)
Supply Chain cost rollup for the
configuration item
Affect on Forecast
Forecast at the Model level, using
planning percentages
Configured items will consume the
forecast for the Model
Want to try it?
Metalink.oracle.com


Flow for ATO Configuration

Step-by-step instructions
Summary
Oracle Applications supports ATO
(and PTO & CTO) with a range of
features in order entry, demand
forecasting, master scheduling,
production, shipping and financial
accounting.
Thank you!

Bob Collins, CFPIM, CIRM
SSI North America
Chicago, IL
Bob.collins@us.ssiworldwide.com

August 15, 2003