EBusiness Suite Manufacturing Applications Strategy Update and Roadmap

E-Business Suite Manufacturing Applications Strategy, Update, and Roadmap Ramchand Raman Vice President, Applications Development

Safe Harbor Statement The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. 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 for Oracle’s products remains at the sole discretion of Oracle. 2 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information Protection Policy Classification from Slide 12

Agenda § Manufacturing Business - Current Challenges § Next Generation Manufacturing - Key Drivers § Highlights of EBS Manufacturing - Release 12 and 12. 1 § Future Directions § Q&A 3 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information Protection Policy Classification from Slide 12

Today’s Manufacturing Environment Increased Business Pressures with Globalization Global Customer Base Management Manage varied expectations and service demanding customers spread across the globe Constantly innovate and rapidly deliver highly customized, quality products at competitive prices for a broader customer base Global Demand Supply Coordination Complex Supply Chain Network Management Manage demand variability and coordinate supplies internally and externally from different geographical locations Manage complex, dynamic global supply chain networks of partners and suppliers to operate in harmony Supply Chain Cost Containment Reduce supply chain costs to stay competitive in an ever expanding global marketplace 4 Rapid Product Innovation & Supply Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information Protection Policy Classification from Slide 12 Regulatory Compliance Management Comply to standards like S-OX, 21 CFR Part 11, Ro. HS, WEEE, ISO 9000 and other local, country specific regulatory norms

Typical Information Technology Landscape Operational Challenges with Disparate Systems Customer Relationship Mgmt Corporate Supply Chain Management Enterprise Resource Planning Business Intelligence Disconnected Homegrown / 3 rd Party MES Factory Automation Quality / SPC Maintenance / Service Multiple Plants w/ Different Systems 5 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Multiple Contract Manufacturers Insert Information Protection Policy Classification from Slide 12

The Need for Change From Fragmented Shop Floor to Integrated Value Chain Performance Demand Driven Lean Manufacturing Lean Execution Manual Processes 1 Marginal Retroactive Transactions Limited Collaboration 6 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Automated Management 2 Stable 3 Advanced 4 Best Practice Internal Process, Data Direct Work Instructions/ Real-time Optimization Device Integration Standardization, Foundational Selective Improvements Insert Information Protection Policy Classification from Slide 12 Multi-Enterprise Orchestration

Roadmap: Continued Releases & Innovation Ongoing Point Releases Easy to Uptake Planned Released … Major Release 11. 5. 10 12. 1. 2 12. 1. 3 Minor Release Nov 2004 7 12. 2 Jan 2007 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. May 2009 Dec 2009 Aug 2010 Insert Information Protection Policy Classification from Slide 12 EBS for Endeca Nov 2012 12. 2. 3 12. 2. x …

Oracle E-Business Suite Support Timelines Updated Support Policies for 11. 5. 10 and 12. 1 2007 2008 2009 2010 2011 Nov ‘ 10 11. 5. 10 Premier 2012 2014 2015 2016 Jan ‘ 15 Extended Sustaining GA Premier Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Dec ‘ 18 Extended Today 12. 2 GA will start new support timeline 8 Longer Support Timeline on Upgraded R 12. 1 System May ‘ 17 May ‘ 14 May ‘ 09 GA 2018 Risk Mitigation for Customer if Exception Upgrade Runs Extended Sustaining Long Offer Exception to Sustaining Support for first 13 months Premier 12. 1 2017 Nov ’ 13 Dec ‘ 14 Jan ‘ 12 Jan ‘ 07 12. 0 2013 Insert Information Protection Policy Classification from Slide 12 Extend 12. 1 Extended Support thru Dec 2018 Waive all uplift fees for 12. 1 Extended Support For More Info on Announcement, see MOS Doc ID 1495337. 1

E-Business Suite Manufacturing 9 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

EBS Manufacturing at a Glance Integrated Planning, Manufacturing, and Supply Chain Execution Integrated Cost Analysis Planning • • Process Manufacturing For Flexibility Lot-Based Analyze Shop Floor Transportation with Distribution, Asset Suppliers Transportation Maintenance Quality Management Adjust Service Lot / Serial Genealogy Tracking Collaboration with Suppliers, Contractors MES APIs, Direct Access Customer 10 Product ATO / CTO MTS Sample Substitutes Resources Substitutes Demand Schedules Configured Order Quality Specifications Productivity Real-Time Lifecycle Mgmt WIP Visibility Integrate Warehousing / Model Contract Mfgrs Mixed Mode Mfg Execution Repetitive, Flow/Lean ETO Mixed Mode Project Integrate Planning and Execution. Discrete, • Planned Orders • Schedule Changes • Component Intelligence Integrated Intelligence Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Enterprise Shop Floor Contract Mfgrs Insert Information Protection Policy Classification from Slide 12 • • • Suppliers Production Status Material Availability Mfg Capacity Schedules / Changes Ship Notices Invoices / Payments

Enabling the Information Driven Value Chain Delivering on Core Principles – Fulfillment Excellence E-Business Suite Manufacturing Drive Compliance Improve Productivity • Integrated Shop Floor • Enterprise Quality and • Mixed Mode • Genealogy, Electronic • Optimized In House and • Real-time Shop Floor and Logistics Execution CAPA Management Manufacturing Operations Contract Manufacturing 11 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Records and Signatures Controls and Analytics Insert Information Protection Policy Classification from Slide 12 Align Value Chain • Demand Driven Planning, Scheduling and Execution • Top to bottom Supply Chain and Financial Integration

E-Business Suite Manufacturing Key Highlights Release 12/12. 1 12 Copyright © 2013, Oracle and/or

EBS Manufacturing Release 12 and 12. 1 – Key Highlights Discrete Manufacturing/MES • • Operator and Supervisor functions Exceptions Management Electronic Records and Signatures • Chargeable/Shikyu Subcontracting • Buy/Sell Subcontracting • Non-Chargeable Subcontracting Operator Skill Validation Serialized Mfg Enhancements Time Entry Enhancements Extensibility Process Manufacturing/MES • • • Outsourced Manufacturing Landed Cost Management Least Cost Formulation Ingredient Substitutions Electronic Batch Records Touch Screen User Interfaces Dispensing/Pre-Mix 13 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Endeca Extensions • • Discrete Manufacturing Quality • • • Cost Management Engineered Systems • In-Memory Cost Management (phase 1) Lot Based Manufacturing (OSFM) • UI and Open Interface Enhancements • Production Scheduling Support Insert Information Protection Policy Classification from Slide 12 Shop floor device integration Performance/Usability Improvements Electronic Records and Signatures Enhanced Receiving Inspection & CAPA Converged Inventory Process Manufacturing Inventory Management MES Integration • • • Common Item Master Dual Unit of Measure Control Material Status and Advanced Lot Control Enhanced Inventory Allocation Rules Deferred ERES & Global Lot Attributes Manufacturing Analytics • MES, Quality, Costing, Planning & Inventory

Manufacturing Execution System (MES) 14 Copyright © 2013, Oracle and/or its affiliates. All rights

Optimize Manufacturing Operations Manufacturing Execution Systems for Discrete and Process Industries MES for Discrete Mfg Operator • Work from dispatch list • Record transactions, quality info, work completion, and time • View work instructions and component info • Report production exceptions • Skills certification Supervisor • Review & resolve exceptions • Monitor shop floor progress ü ü 15 ERP Corp Mgmt MES Production Mgmt Shop Floor Control System Automation & Control MES for Process Mfg Process Engineer • Manage recipes & advanced process instructions Production Supervisor • Create & manage batch status • Log non-conformances Converged Inventory Dispensing / Production Operator • Touch Screen User Interface • Pre-weigh designated ingredients • Process batch operations • Operator Certification Deliver Real-Time Shop Floor Visibility to Multiple Layers of Management Reduced TCO / Complexity via Integrated Mfg Mgmt & Production Execution Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information Protection Policy Classification from Slide 12

MES Usability Improvements Converged Inventory • Discrete MES – – Reduced Screens, Mouse Clicks Express Transact Components Assembly Serial# centric Work Order Detail Page New Extension Hooks – Mass Move • Process MES – More capabilities for Touch Screen UI – Additional Transactions Support 16 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information Protection Policy Classification from Slide 12

Common Inventory for Discrete and Process Mfg • Single Inventory Model Order Management OPM Inventory OPM Production Costing 17 Procurement • Process features include: ASCP – – – Discrete Oracle Inventory OPM Recipe / Quality Copyright © 2013, Oracle and/or its affiliates. All rights reserved. WIP Costing Insert Information Protection Policy Classification from Slide 12 BOM / Quality Dual Units of Measure Grade Expiration/ Maturation Dates Material Status Enhanced inventory allocation rules – Indivisible lots – Support for “child lots” (replace “sublots” in OPM)

Outsourced Manufacturing 18 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert

EBS Outsourced Manufacturing § What is it? § A new product in E-Business Suite 12. 1. 3 that provides original equipment manufacturers (OEM) the ability to model key set of industry standard outsourced manufacturing business processes to track and manage all aspects of the outsourcing business with one or many contract manufacturers. § Who is it for? § The solution is for original equipment manufacturers in all discrete industries such as Industrial Manufacturing, Hi-tech, Medical Devices, Automotive, Aerospace and Defense etc who have outsourced part or all of their manufacturing activities to contract manufacturers and need the visibility into those activities. § What are the key capabilities? § Endeca visualization layer provides accurate and real-time visibility into the overall health of the outsourced manufacturing business related to inventory balances, financial positions, and production bottlenecks such as quality issues, delays, and material shortages that could help mitigate risks to key customer commitments. 19 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information Protection Policy Classification from Slide 12

EBS Outsourced Manufacturing Four categories of visibility into outsourcing business 1 2 Subcontract Order Status Inventory Balances EBS Outsourced Manufacturing Main Point 3 4 Financial Positions Quality 20 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information Protection Policy Classification from Slide 12

Visibility into Outsourced Manufacturing Key Performance Indicators Typical Business Questions… How many subcontracting orders are delayed and which customers are impacted ? What’s the value of our material at manufacturing partner locations ? What’s the value of goods in transit to manufacturing partner locations? What’s the value of defective finished goods received from manufacturing partners ? What’s the value of uninvoiced subcontracting orders ? 21 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information Protection Policy Classification from Slide 12

Outsourced Manufacturing Business Practices A OEM B Manufacture Assembly Process 10 Inhouse Process Outside MP C RMS Ship Partial Product B C 20 Process Inhouse B Receive Finished Product 30 B Buy Components 20 Drop Ship Components A C C Ship Components A Receive Assembly MP OEM * A RMS B C Drop Ship Components B Buy Components B C Sell Components (with Markup) Buy Assembly A OEM 22 RMS C Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information Protection Policy Classification from Slide 12 B Buy Components B MP Drop Ship Components A C C Virtual Sale of Components Virtual Purchase of Assembly A OEM * Applicable only for Japan, Korea, Taiwan MP

Endeca based Visualization 23 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Subcontract Order Status § View status of subcontract orders (delayed, on-time) and component allocations across manufacturing partners 24 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Inventory Balances § View quantity and value of components in-transit or at manufacturing partner

Quality § View reasons for poor quality of outsourced products and their value across

Financial Positions § View financial positions of subcontract and replenishment orders for a manufacturing

E-Business Suite Outsourced Manufacturing Business Benefits § Gain full visibility into the overall health of outsourced manufacturing § Quickly view and analyze financial transactions related to subcontract orders § Track quality issues related to supplied components and finished products § Monitor sales and procurement activities to meet on-time customer delivery § Collaborate effectively with approved suppliers and contract manufacturers § Analyze and negotiate service level agreements and pricing to optimize costs § Mitigate risks related to inventory bottlenecks across manufacturing partners 28 Copyright © 2012, Oracle and/or its affiliates. All rights reserved.

Endeca Information Discovery 29 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Oracle Endeca Fully Integrated Within EBS E-Business Suite Applications Extensions EBS Endeca In-Memory Information Discovery Structured and Semi-Structured Data Unstructured Data E-Business Suite Database 30 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Files Social

E-Business Suite Extensions for Endeca Enterprise Asset Mgmt Field Service Asset Performance Spares Planning Work Orders Incidents Materials Depot Repair Projects Management Installed Base Management Supply Chain Management Channel Revenue Management Discrete Manufacturing Inventory Management Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Procurement Order Returns i. Procurement Order Delays HCM Candidate Job Search Learning Management Process Manufacturing Warehouse Management Cost Management 31 Claims Order Management Available Now!

Demo Order Management Integration with Manufacturing and Inventory Management Demo 32 Copyright © 2012,

Manufacturing Analytics 34 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert

Manufacturing Analytics Pre-packaged KPIs and Dashboards Manufacturing Quality Plan to Produce Manufacturing Execution Process Manufacturing Converged Inventory Manufacturing Quality Inventory Production Costing Sample Reports Plan to Produce Manufacturing Execution Process Manufacturing • Production Attainment • Past Due Work Orders • Planned Production • • • Formulation Yields • Adjusted Formulation 35 Work Order Detail Open Work Orders WIP Operation Analysis Scrap Summary Rework and First Pass Yield Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Variance • Scaled Formulation Manufacturing Quality • Quality Summary • Quality Results • Non Conformance Variance Insert Information Protection Policy Classification from Slide 12 Production Costing Inventory • Cost Metrics KPI • Manufacturing Cost • Inventory Expirations • Excess and Obsolete • Manufacturing Cost • Inventory Aging Summary Variance Summary • Cost Trend Inventory

Mobility 36 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information

EBS Mobile Applications Strategy i. Pad access to EBS Self-Service: Specialty Mobile Applications for EBS: • OA Framework being certified on Safari • Application Examples: • Expenses • HR Self-Service • Projects time entry • i. Procurement • Order Information Portal Endeca for EBS enhances user experience: • Endeca Applications: • Order Management • Asset Maintenance • Projects • Discrete Manufacturing • Field Service • Channel Management 37 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. • ADF Mobile-Based • Native Mobile UIs • Mobile device services • Disconnected access • Application Examples: • Mobile Field Service • Mobile Maintenance • Mobile Shop Floor Manager • Mobile Warehouse Manager Oracle Business Intelligence Mobile: • Business Intelligence content on i. Phone & i. Pad Insert Information Protection Policy Classification from Slide 12

In-Memory Cost Management 38 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

In-Memory Cost Management Built and optimized for Oracle Engineered Systems Solution Summary • Cost Impact Simulator Impact on product costs from BOM, Routing, Resource, Overheads • Cost Comparison Tools Detailed cost elemental comparison and derivations across entities • Gross Profit Analyzer What-If simulation capability for cost impact on the product gross margin • Inventory Period Health Check Real-time monitoring and mitigation for Period Close bottlenecks View and search Receiving/Inventory/WIP transactions and accounting distributions 39 | © 2012 Oracle Corporation Confidential and Proprietary – Oracle Internal Use Only

In-Memory Cost Management Built and optimized for Oracle Engineered Systems Solution Summary • Cost Planning & Optimization Ability to quickly set up and derive resource and overhead rates • Cost Forecasting Predict item costs and inventory valuation using statistical techniques and external factors • Cost Variance Analyzer and Reconciliation Cost variance analysis from Manufacturing, Procurement, Landed Costs Streamlined reconciliation for accrual and inventory value across transactional distributions, sub ledger accounting and GL 40 | © 2012 Oracle Corporation Confidential and Proprietary – Oracle Internal Use Only

Roadmap 41 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Insert Information

EBS Manufacturing Roadmap Manufacturing Execution System • • • Electronic Kanban Support for contingent workers Oracle Time and Labor integration Usability Improvements Serialized Manufacturing -- Automatic dekit -- Express transact improvements Engineered Systems • In-Memory Cost Management (phase 2) 42 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. Outsourced Manufacturing • • ATO/CTO support i. Supplier Portal Integration Serial and Lot Genealogy Support for Process Manufacturing Endeca Information Discovery Manufacturing Quality • Discrete Manufacturing -- Operator centric dashboards • Process Manufacturing -- Operator centric dashboards • Cost Management -- Variance Analyzer -- Reconciliation Converged Inventory Process Execution/Financials • Open interfaces for batches and transactions • Improved OPM Financials -- Performance Improvements -- Functional Enhancements Insert Information Protection Policy Classification from Slide 12 • • Manufacturing Defect Analysis Project Manufacturing Lot Based Manufacturing (OSFM) Master Data Management -- Product, Supplier, Site