As Tecumseh adopted Oracle-based business processes, efficiencies rippled throughout the company. Purchasing was streamlined; inventory management and cost visibility improved; and
order fulfillment rates increased. Perhaps most impressive, the
time needed to close the books each month was cut by 18 days.
Yenor attributes the success of Tecumseh’s Oracle E-Business
Suite rollout to his business-oriented IT team. “We have key
people who specialize in business
process,” he explains. “Think about
the traditional Oracle business processes in a typical manufacturing
company, like financials, procurement,
supply chain, and manufacturing.
People own those processes and work
with business leaders around the
world. They speak business language.”
This business-first mindset also helps
at budget time, he adds: “It’s not the
>>SNAPSHOT
Tecumseh Products Company
tecumseh.com
Headquarters: Ann Arbor, Michigan
Manufacturing locations: Brazil, Canada,
China, France, India, Mexico, United States
Industry: Industrial manufacturing
Net Sales: US$933.8 million in 2010
Employees: 8,500 worldwide
Oracle products: Oracle E-Business
Suite, including financials, manufacturing,
advanced supply chain planning, inventory
optimization, collaborative planning,
procurement, order management, and
warehouse management modules;
Demantra Demand Management, Demantra
Real-Time Sales and Operations Planning
ALL IN THE TOOLS
Because Tecumseh is a manufac-
turing company, Oracle Advanced
Supply Chain Planning was central
to this transformation. Wes Howe,
Tecumseh’s global director of purchasing and supply chain
management until mid-2011, was hired to oversee the Oracle
Advanced Supply Chain Planning implementation in 2007,
and he found a variety of unintegrated supply chain tools in
use when he arrived. “We had to get people off of spreadsheets
and other informal systems and into Oracle Advanced Supply
Chain Planning,” Howe recalls. “We advised people, ‘The infor-
mation is in the Oracle system; you just needed to harness it.’”
Howe admits that he needed some convincing himself.
“I had been an SAP guy,” he recalls. “When I came here and
started using Oracle Advanced Supply Chain Planning, I was
relieved to learn that it, and the core Oracle apps, were broad
enough to do discrete manufacturing, flow manufacturing, and
warehouse management. The integration was there. The toolset
That was good news, because there was clearly room
for improvement. “With Oracle Advanced Supply Chain
Planning, we were able to make quantum leaps in our order
completion rates,” Howe says. “We ended 2010 at about 85
percent, and we’re approaching 90 percent now—all through
better use of the toolset.”
The gains were greatest where Tecumseh needed them most.
Customers that required large volumes of identical products—
about half of Tecumseh’s business—already enjoyed high deliv-
ery percentages. But the rest of the business—the short runs,
often of compressors used in commercial refrigeration applica-
tions—were harder to plan for and therefore lagged behind. But
by using the Oracle system, management was able to dramati-
cally improve a part of the business into which they previously
had minimal visibility.
ONE-NUMBER FORECASTING
In spite of Oracle Advanced Supply Chain Planning’s strengths,
the solution didn’t give Tecumseh a long view of customer
needs and other market factors—what’s known as demand
planning. “With demand planning, you push the discussion
of what to manufacture toward the customer,” Howe explains.
“The salespeople are interacting with customers every day. How
do you factor in their knowledge and bring it into the opera-
tions and supply chain organizations? Oracle Advanced Supply
Chain Planning couldn’t really identify trends and didn’t allow
the salespeople to pass information to the operations team.”
But Oracle’s Demantra applications could, and Demantra’s
ability to flexibly receive and present data proved a good
match for Tecumseh’s global footprint. Howe explains that
Oracle applications allow each person to speak his own
language—and not just English, French, or Portuguese
(although multilingual capability is built into the software).
He means that salespeople, accountants, and supply chain
and manufacturing people can all interact with the software
in ways familiar to them. “They get to see their information
the way they want to,” Howe says. “Demantra breaks down
barriers inside the company. It allows the cross-functional
communication that every company dreams about, without
