Enable the Disruption-free Factory with Oracle Smart Operations

Combine shop floor operations data with business data to create a continuous feedback loop that helps accelerate decisions, improve quality, and drive continuous improvement. CLICK TO READ THE EBOOK

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Enable the Disruption-free Factory

with Oracle Smart Operations

March, 2024, Version [1.0]

2 Enable the Disruption-free Factory with Oracle Smart Operations / Version [1.0]

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Table of contents

Purpose 4

Introduction 4

Are you ready for the change in manufacturing? 5

What does Smart Operations look like for manufacturing industries? 5

Why aren’t current manufacturing implementations enough? 6

What can manufacturers do to bridge this gap? 7

Visibility into manufacturing operations as they happen in the physical

world 8

Contextualization of operational events to relevant business context 8

Insights and recommendations derived from integrated IT and OT data 8

Closed-loop interactions with physical processes to improve quality and

productivity 9

Operator-level optimized user experiences 9

Supervisor-level optimized user experiences with digital twin visualizer 9

Business value of Oracle’s Smart Operations initiative 9

Smart Operations beyond manufacturing 10

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Purpose

This document provides an overview of features and enhancements included in release 24C. It is intended solely to

help you assess the business benefits of upgrading to 24C and planning for the implementation and upgrade of the

product features described.

Introduction

Oracle Smart Operations is an Oracle Fusion Cloud SCM initiative that increases operational performance and

improves the workforce ability to make intelligent and timely execution decisions.

It combines real-time operational data with business data and digital technologies to simplify operations processes,

deliver recommendations, and enable automation across supply chain and manufacturing execution.

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Are you ready for the change in manufacturing?

Many manufacturing organizations have been slow to adopt new information technology (IT), and, for the most part,

this hesitation also applies to operational technology (OT). However, given the economic, competitive, and labor

shortage pressures bearing down on manufacturers, the next five years will likely bring increased automation and

radically new product lines and go-to-market approaches.

In 2022, McKinsey & Company conducted a survey of high-ranking executives in the industrial sector, revealing that

“two burning issues are keeping manufacturing leaders awake at night: material and labor constraints caused by

rising costs and talent gaps, and a need for improved production visibility through better demand forecasting,

inventory processes, manufacturing flexibility, and real-time visibility of the factory floor.”*

*“Digital twins: The next frontier of factory optimization,” McKinsey & Company, 10 January 2024

To combat these challenges, much of the focus has been on planning and end-to-end supply chain visibility. Today,

manufacturing organizations are increasingly focused on operations, looking to build flexibility and visibility while

continuing to improve results. Increasing operational agility can enable these organizations to rapidly adapt their

execution to changes in supply or demand. Operational performance can benefit substantially from automation and

empower a new generation of frontline workers in the process.

Oracle believes that achieving this combination of execution agility and high operational performance begins with

transforming how IT and OT infrastructure are integrated to support operations, although today, for the most part,

both IT and OT setups involve dated and convoluted infrastructures. This is a major impediment to building and

supporting a “factory of the future” that can meet today’s demands and anticipate tomorrow’s challenges. Resolving

this issue requires the creation of a digital twin that can combine and interpret data from IT and OT to seamlessly

deliver timely information, recommendations, and instructions to people and machines. This joint application of

business data, operational data, and advanced analytics—known as Smart Operations—is already showing promise

on factory floors.

Information technology (IT)

Information technology hosts and manages the business master data, perpetual data, and transactions that

enterprises use for their business operations. It focuses on planning, orchestrating, and tracking activities

throughout an organization.

Operational technology (OT)

Operational technology monitors and controls physical changes in industrial equipment and other assets. OT can be integrated within single machines or can manage activities across multiple pieces of equipment.

What does Smart Operations look like for manufacturing

industries?

Frontline workers make the best decisions they can with the information and analytics they currently have available.

All too often, though, that information is stale and incomplete, and they have no analytics to interpret it effectively.

Similarly, while automation is increasingly common in manufacturing, it tends to be used for specialized tasks that are

set up by operators. In cases where automated operations actually leverage business information to adjust based on

changing demand or material characteristics, challenges still exist often due to a bespoke disconnected solution.

Manufacturers stand to gain considerable competitive advantage by infusing their operations with the right data and

insights, at the right time, and at the right place. Providing operational employees with real-time information from the

factory floor in context with enterprise-level supply chain information can accelerate high-value decisions during

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execution while informing corrective action and driving continuous operational improvement. Driving and

synchronizing automated equipment with up-to-date supply chain and engineering information can also increase

flexibility and provide a path to lights-out.

What is Smart Operations?

Smart Operations combines real-time operational data with business data and digital technologies to simplify

operations processes, deliver recommendations, and enable automation across supply chain and manufacturing

execution.

A manufacturing operator receives a message to increase their inspection rate based on a prognostic change in

operating pressure, resulting in reduced defects and scrap.

A maintenance technician receives a recommendation for corrective action based on past repairs and events, reducing wrench time, and increasing uptime.

Not only can Smart Operations support day-to-day execution, but it can also promote greater engagement of

employees. In simplifying operational processes, Smart Operations allows employees to focus on actual value-

creation activities and take on new and pressing challenges such as increased automation, sustainability, revenue

transformation, and flexible production.

Indeed, Smart Operations and improved employee engagement are the only initiatives ranked by Gartner® as having

an “extremely large” positive business impact for manufacturing enterprises. *

*“Top Innovative Technology Trends for Manufacturing Operations Leaders,” Gartner®, 10 November 2023

Why aren’t current manufacturing implementations

enough?

In manufacturing, value creation happens on the factory floor where the execution activities of the operators and

machines come together to transform materials into products to be shipped to customers, all within the wider context

of enterprise-level business activities and influxes of information. Despite the adoption of manufacturing execution

systems (MES), manufacturers often fail to effectively include execution in their enterprise-wide digital threads. The

point solutions selected independently by different groups across the organization fail to share information across

other operations and business groups, limiting the access of the production supervisor or operator to actionable, real-

time supply chain and product information. As a result, IT/OT convergence remains elusive, and each system-to-

system gap creates another tear in the digital thread, which ultimately limits the transformative potential of Smart

Operations for Manufacturing.

The challenges in establishing a digital thread across IT and OT system layers can also be present within the layers

themselves. This can be particularly evident within longstanding incumbent systems, including Oracle E-Business

Suite, where piecemeal developments over decades may have resulted in highly customized and extended

implementations. Such systems generally struggle to meet the needs of a rapidly evolving business context, and in

some cases can actively impede an organization’s ability to adapt, innovate, and compete. Since most of these

solutions are deployed on-premises, any potential innovations from the vendor would require a costly forklift

technical upgrade to access.

These systems also employ complex and often inconsistent user interfaces that are designed to feed the system

rather than meet the user’s operational objectives. When combined with broken process flows, these data-centric user

interfaces essentially disempower the employee instead of enabling them to deliver value.

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IT/OT Convergence is a hot topic in operations today.

There is often poor coordination between operational technology and information technology teams. Frequently,

they pursue different directions and partnerships, resulting in little synergy and actively limiting value creation.

For example, manufacturing equipment collects telemetry data via OT that may be stored away for future

analysis. But the lack of real-time business contextualization captured in IT limits its immediate usefulness for

throughput, product quality, and equipment availability. Given the increasing capacity to leverage such

information with data analytics and AI, this is a critical loss.

Unfortunately for many manufacturing organizations, their enterprise systems and supporting functions aren’t

equipped to reliably and continuously act on information and insights fed back from operations. Even if operational

data can be gathered and contextualized for quality, product engineering, manufacturing engineering, procurement,

HR, and other areas, the systems in place aren’t often set up to receive and mine that data.

What can manufacturers do to bridge this gap?

To address this challenge, manufacturing organizations need to focus on five key areas.

1. Introducing a unified solution that connects the

digital thread across the enterprise, including

operations such as manufacturing and

maintenance execution.

2. Deploying advanced analytics to contextualize

factory floor information in real time without

specialized data science skills.

3. Eliminating wasteful or low-value manual

processes through redesigned process flows and

automation.

4. Prioritizing a user experience designed to support

execution, rather than simply delivering data and

feeding the system with results.

5. Establishing a single source of truth for frontline

workers that delivers up-to-date information and

analytics—the right data and insights, delivered at

the right place and the right time.

This is precisely what Oracle’s Smart Operations delivers.

Figure 1. Smart Operations powered by Oracle Fusion Cloud SCM

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Smart Operations powered by Oracle Fusion Cloud SCM

The Oracle Fusion Cloud Suite has been recognized by analysts and across industries as a leading IT solution for

product-centric enterprises, including manufacturing organizations (see the 2023 Gartner® Magic Quadrant™

for Product-Centric Industries).

With its uniform technology base, delivered as SaaS on the cloud, the Oracle Fusion Cloud Suite (ERP, HCM, SCM, and CX) offers deep process integration to connect a digital thread across the enterprise. It provides a

continuous stream of innovative business solutions that leverage new technology, such as the recent

introduction of Gen AI features. The suite also incorporates automated best practices throughout, delivering all this through a next-generation user experience that empowers the employee. You can access these benefits by

re-platforming your legacy IT solutions, including those currently on the E-Business Suite, to help set your

company up for future success.

These capabilities also make the Oracle Fusion Cloud Suite an ideal base to address the additional requirements of an integrated IT/OT solution and deliver on the promise of Smart Operations.

Oracle’s Smart Operations initiative increases operational performance and facilitates intelligent and timely execution

decisions. Building on Oracle’s existing capabilities, our plans include the following:

Visibility into manufacturing operations as they happen in the physical world

From initial design to the factory floor, Oracle Fusion Cloud SCM provides a single digital thread that

connects data from across different environments. This enables real-time visibility into

manufacturing operations for all stakeholders. Connectivity across a wide range of factory floor

equipment and processes for real-time data acquisition is simplified through an open collection

infrastructure and digital twin-based API, providing the flexibility to work with your equipment

vendors and device data (IoT) aggregators.

Contextualization of operational events to relevant business context

This addresses the critical contextual gap where OT-sourced time-series data lacks the context of the

business transaction that triggers its generation (e.g., manufacturing order, customer request, etc.)

and which is generated and managed by separate IT systems. Smart Operations for Manufacturing

preserves this connection using a single data model that dynamically links operational events to

relevant business contexts to automatically determine further actions, if any.

Insights and recommendations derived from integrated IT and OT data

The key to unlocking new value from IT and OT convergence is combining information from all

aspects and levels in a single data model, then applying continuous analytics and machine learning to

proactively generate insights that drive greater efficiency and quality. Smart Operations leverages the

advanced analytics of Fusion AI to deliver actionable insights into quality assurance and control, asset

availability, and performance management. Smart Operations can deliver these insights as a natural

extension of the user experience, further helping to empower and engage employees.

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Closed-loop interactions with physical processes to improve quality and

productivity

By bridging the IT/OT divide, Smart Operations can interoperate in both domains. Changes driven

from upstream, such as altered order priorities or production schedules, may be better implemented

on the factory floor. Similarly, issues such as faulty or failing equipment can be identified quickly and

incorporated into upstream planning and maintenance processes. Examples range from simple

closed-loop interactions such as turning on a workstation Andon light when production exceptions

are detected, to advanced interactions such as sending instructions to an industrial robot to

reconfigure itself for the next work order.

Operator-level optimized user experiences

Smart Operations prioritizes capabilities that help the user execute physical tasks and reduce

transactions. Such capabilities include the following:

• Checking for operator certification through integration with Oracle Learning

• Provisioning versioned, detailed, and visual digital work instructions linked to work orders

• Automating the reporting of resource usage and work-step completion

• Providing access to training material and generative AI–driven recommendations from Oracle

Fusion Knowledge Management

• Connecting users to peer groups for support using industry-standard collaboration tools

• Gamifying training to encourage employee learning, progress tracking, and completion

estimation

Operators can access all these capabilities from their workstations through a user interface purposely

designed to provide a friction-free digital experience. This enables operators to focus on their

manufacturing tasks, while granting quick access to the information needed to efficiently perform

those tasks.

Supervisor-level optimized user experiences with digital twin visualizer

Supervisors need on-the-go, intuitive visualizations of the real-time status of production and

equipment health to make informed decisions as they manage production issues and conduct routine

Gemba Walks. Smart Operations digital twin visual explorer provides:

• A bird’s-eye view of the factory floor

• In-context visualization of telemetry data and events collected from shop floor equipment,

overlaid with relevant operational context for a 360-degree production update

• Operational context including the overall production schedule, resource availability, quality

issues, expediting requirements, and maintenance schedules

• Pre-built and customizable metrics for efficiency, performance, and quality

Business value of Oracle’s Smart Operations initiative

Smart Operations can provide a unified solution for connectivity, insights, automation, and employee

engagement. In doing so, it can eliminate, for most manufacturing organizations, the need for

separate applications to support execution.

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Increased Operational Performance According to Deloitte “smart factory initiatives typically accelerate business value creation. Companies report on average 10–12 percent gains in areas such as manufacturing output, factory utilization, and labor productivity after they invested in smart factory initiatives.”

Focusing on high performance execution in the factory, core to throughput and quality, results in high overall operational performance, not just in output, but also in cost, quality, and delivery.

This rationalization of the technology required to run a manufacturing enterprise is a further

compelling reason to move off legacy on-premise applications and implement the Oracle Fusion

Cloud Suite.

Smart Operations beyond manufacturing

The concepts of Smart Operations — that of a connected digital thread that can include connectivity

to the physical world, combined with analytics, AI, automation, and employee engagement—have

broad applicability outside of manufacturing. For example, the closely related field of maintenance

can benefit from these same capabilities, facilitating predictive maintenance and integrating asset

availability more effectively into overall enterprise processes. Smart Operations ideas can also be

applied to healthcare supply chains, where RFID, automated replenishment, and robotic picking can

deliver significant labor- and cost-saving benefits while helping improve patient outcomes. Indeed,

Smart Operations ideas can be applied to almost every area within any type of product-centric

enterprise.

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Enable the Disruption-free Factory with Oracle Smart Operations

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