Analytic Vision

Case Study - Download

Company Background

Cree, Inc. is a market-leading innovator and manufacturer of semiconductors that enhance the value of LED solid-state lighting, power and communications products by significantly increasing their energy performance

Cree’s product families include blue and green LED chips, lighting LEDs, LEDs for backlighting, power-switching devices and radio-frequency/wireless devices.

Business Issues and Challenges

As an actual cost company, Cree, Inc. had not been able to accurately forecast unit sales and therefore cost of goods sold. Oracle’s Hyperion Planning solved this critical business issue and will improve profitability because gross margin is what drives the company's business decisions. Without the margin, R&D and SG&A have to make up shortfalls.

• Labor intensive excel based reporting & budget process with Hyperion Planning
• Manual integration of data from Oracle Financials and other sources with a automated solution using Oracle Financials and Hyperion Planning
• Reduce Planning cycle  from weeks to days
• No ability to do “what if” scenarios
• No ability Analyze data dynamically
• Labor intensive maintenance to add or change product lines, segments, companies or location master data
• No standardized Workforce or Labor Planning process that is integrated with the financial planning process
• No standardized Capital or Project Planning process that is integrated with the financial planning process
• No Multi-Currency Reporting or Planning

Solution Implemented

To meet their needs, Cree, Inc. implemented Hyperion Planning, Workforce and Capital modules together to improve profitability and margins. The solution combined the benefits of P&L, Balance Sheet and Cash Flow Planning with the ability to plan capital expenditures and labor costs. Cree leveraged best practice design and implementation techniques using the Hyperion Planning suite with Oracle’s E-Business Suite to share dimensions, data and business rules along with optimizing planning business process.

Capital Planning has allowed Cree to better forecast costs and better forecast the need for the very expensive capital required in this industry.  It also offered required controls around Capital expenditure review and approval processes.

With Hyperion Planning, Cree can make much better business decisions that affect margins and better management of changing business conditions that impact COGS.  Using Hyperion helped Cree become more timely and efficient by having a centralized model that shares dimensions & data with Oracle’s E-Business Suite and allows for flexile what-if scenarios as business conditions change.
 

Business Benefits and Results

• Automated Planning Process with Oracle Financials and Hyperion Planning
• Product line profitability including allocations and cost absorption across all product families.
• Automated integration between Oracle Financials and Planning to facilitate changes/additions to Oracle master data
• Standardized Web forms and Smart View templates to allow for the timely entry of budget data into Planning
• Reporting is setup to allow for comparison of budget and actual data dynamically
• Reduced cycle times
• Simplified maintenance
• Standardized and Integrated Workforce, Capital and Financial Planning with Oracle Financials.
• Business Intelligence Platform in place to expand into Oracle Business Intelligence Enterprise Edition with phase 2