IBM Business Consulting Services. Delivering bottom line value to the freight and logistics industry IBM Business Consulting Services

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1 IBM Business Consulting Services Delivering bottom line value to the freight and logistics industry IBM Business Consulting Services

2 Your industry today How are you coping with the constant change in the global freight and logistics industry? The constant demands on your business? Buyers want greater reliability at lower total cost. Integration. Infrastructure constraints. Security. Profitability. Delivering competitive service has become increasingly complex. What can IBM bring to your business? IBM Business Consulting Services can work with you to focus resources on business solutions that deliver real competitive value now and for the long term. Using the combined experience of experts in every aspect of your business in more than 100 countries, we have implemented proven solutions for industry leaders worldwide. We offer our clients a unique set of competencies from deep business process expertise to advanced analytics and research to a proven ability to implement solutions in a way that delivers bottom-line business value. We have identified what it takes to grow in this competitive market and can deliver to you the right services and solutions to put your business on the path to sustainable leadership. No matter where you fit in today s competitive landscape, we can uncover new ways to improve service, reduce operating costs and raise profits. So how can you grow your profits and keep your customers happy?

3 Tap into our industry insights In the midst of change, the buyer is deciding who will lead. The businesses of lead logistics providers, 3PLs, freight forwarders, container shipping lines, parcel carriers, LTL and full truck-load road and rail operators have both similarities and distinctive differences. Across all industry segments, we believe service leaders will be those organizations that master the six elements defined below: Strategic Clarity Industry leaders will have a focused business model and a precisely targeted value proposition based on solid understanding and alignment of strategic intent, core competencies, customer base, asset planning, and competitive positioning. Operational Efficiency, Quality and Economy Freight and logistics leaders are above all excellent operators. Leaders will have business processes that are standardized, practices driven by workflow software, performance metrics that drive continuous improvement, information systems that are integrated and a single master database delivering higher product quality, lower costs and excellent data integrity. Robust Network Profitability Management Leaders will increase profits and free cash flow with smarter yield management and faster network decisions. They will perfect the capability to optimize asset utilization, improve revenue quality, and increase density to reduce costs and price with a real understanding of customer profitability. 3PLs in particular will focus on shared user networks to offer superior value which is difficult for the buyer to substitute, enabling profit margin improvement. Global Governance Delivering consistent service to buyers with global requirements demands that providers learn how to align performance measures, controls and organizational design with global service and product offerings. The traditional countrybased profit/loss corporate framework leads to dysfunctional service delivery compared to quality promises given to the buyer. Targeted Customer Relationship Management Leaders will achieve above-average industry growth and gain market share by applying a strategic and enterprisewide approach to managing customers, including the ability to initiate strategic partnerships with top-tier customers and aggregating customer needs to allow rapid development of effectively aligned products. Advanced Business Intelligence Market winners will sustain leadership by optimizing sales, product development and operations more deeply across the entire enterprise. Applying business intelligence will foster innovation and a problem-solving culture that supports total customer focus and profitability under everchanging market demands. IBM s cost flexibility is extraordinary it makes it possible for us to access the enterprise IT infrastructure and support we require to deliver integrated CRM processes across our 284 franchises. Plus, it enables us to explore new global markets by ensuring a cost-effective growth roadmap. Kevin Lathrop, Chief Information Officer, Unishippers

4 Proven solutions, industry expertise a snapshot of what IBM offers As a freight and logistics service provider, you are being asked to serve your shipping customers more efficiently while reacting to unprecedented operational challenges worldwide. Focusing the Business Model Map your path to mark leadership IBM s proven Component Business Modeling approach identifies and classifies all activities in your business. Your leadership team can agree on which activities add the most competitive value and which do not. For the latter, you can focus on achieving the greatest economies of scale and the highest quality. Talk to us today about our component business modeling workshops specifically designed for the freight and logistics industry. IBM s Transport and Logistics team brings deep industry expertise and global reach to unlock value rapidly by addressing your most pressing issues in virtually any activity within your business: strategy and change, operations, finance, sales and marketing, human resources and IT. We have delivered vast improvements to the core competitive business functions for some of the world s leading container shipping lines and logistics service providers. Each company has unique requirements. The container shipping line may be looking for answers to solve empty container repositioning or new supply chain security challenges. The Lead Logistics Provider and 3PL may need new ways to mass-customize solutions. IBM can help identify the solutions that will create the most value for you and deliver those solutions quickly for the greatest competitive advantage. Application Portfolio Management Reduce maintenance and support costs Your business likely maintains many disparate business applications. Your ability to respond to market change can be hampered by an IT infrastructure that is misaligned to business goals and a drain on the bottom line. Portfolio Management can bridge the gap between business needs and IT to prioritize alignment with critical business programs while reducing overall IT maintenance and development costs. Which applications can be sunset? Which can be replaced by commercial software? Our network of nearly 50,000 application management professionals can help you solve your application issues now. Legacy Application Management Unlock the business value of legacy applications Where you have business critical applications proprietary to your organization we can properly document these systems and supporting databases, allowing you to make changes a lower risk far more rapidly. If necessary we can rewrite in a more adaptable code and web enable them. We have helped clients all over the world with these issues and can help you today. Yield Management Increase revenues and resource utilisation Yield management will help you disperse customer loads within capacity constraints to increase asset utilization, raise revenue, reduce costs and increase margins per asset. Yield benefits often can be achieved with limited investment by understanding which loads are profitable using Activity Based Costing. IBM can help you by improving capabilities in areas such as demand forecasting, market segmentation, capacity planning, equipment positioning and pricing management. IBM Research has won several awards for its extensive work in yield management. Pricing Multiply your profits with low implementation costs Develop an analytical approach to pricing with significant impact on your business. A price change of 1% can yield as much as a 30% increase in profit margins. Pricing is the main lever for market positioning and customer perception for your service. It can condition demand to make better use of the available capacity in your system. Develop more robust processes to manage buyer conformance to the volume-price equation a key area of margin erosion in the price to promise freight market. Equipment/Asset Management Reduce costs with a global view Automate key processes and develop a global view of the equipment positioning challenge. Create reliable forecasts to support equipment plans worldwide that will lower global asset management expense. IBM has proven experience delivering solutions for empty container routing and repositioning.

5 Network Optimization Optimize forecasts, routes and loads Analyze customer demand and trade forecasts to develop optimal routing through your network. IBM s container management approach includes improving trade forecasts, empty repositioning strategies, intermodal network management and load optimization. Customer Relationship Management Grow revenues and increase responsiveness Customer segmentation must be refined and tied to a clearer delineation between the degrees of service offered to particular customers. Industry leaders will create a reinforcing cycle in which they continually listen to and interact with customers and demonstrate informed understanding of key client needs. These companies innovate more readily, making themselves more responsive. Customer stickiness increases as satisfaction rises. Brand perception is enhanced. IBM delivers the industry experience and data management capabilities required on a global scale. On Demand Innovation Services Combining the intellectual firepower of IBM Research with our world-class business consulting capabilities, On Demand Innovation Services (ODIS) brings a wide array of inventions, tools, technology and expertise directly to our clients. Now IBM Research is actively developing solutions specific to the freight and logistics industry, addressing issues once thought impossible to solve. Document Processing Simplify data and reduce errors for improved data quality IBM offers a comprehensive solution for virtually error-free data-entry and highly compressed form archives. The solution is designed for any back-office or front-office operation and can be embedded in any process. The benefits include greater operator productivity, data volume reduction and process simplification and optimization. ODIS has access to 5 Nobel laureates, 8 research labs and over 3,000 scientists, engineers and technologists. We re proud to have been awarded 38,000 patents in our history, including earning the most patents worldwide for 12 consecutive years.

6 Delivering results for freight and logistics clients Our commitment to the freight and logistics industry IBM s commitment to the freight and logistics industry is supported by the expertise and global reach of our professional team. In this period of rapid growth and change, those companies that can respond fastest and most effectively will capture the most profits. For you, operational excellence is the key to success, ranging from managing customers to planning routes to positioning equipment across the globe. We understand. Using our expertise we can implement solutions to your most complex challenges faster and more efficiently. We already have helped many leading container shipping lines and logistics service providers. Ask us and we will share those experiences with you in detail. China Ocean Shipping (Group) Company (COSCO) COSCO teamed with IBM Business Consulting Services to standardize and centralize its financial systems, giving the company an enterprise-wide view of its financials. This enabled corporate management to easily monitor and reallocate funds between its subsidiaries and to respond quickly to changing business needs. Management can now perform accurate revenue and profit forecasting, improved business accounting and advanced account management. And with information available from all of the subsidiaries, COSCO can coordinate its financial resources to minimize loans and reduce accounting costs. Deutsche Post World Net Postal privatization and rapid global expansion presented challenges to Deutsche Post World Net as Germany s mail operator embarked on a strategy to become the global leader in one-stop logistics services. A series of corporate mergers capped by the acquisitions of international parcel carrier DHL and third-party logistics leader Danzas had greatly increased the scope and complexity of Deutsche Post s service network. DPWN needed to revamp its central business information management processes and technology platform to allow for rapid decision-making at the local market level worldwide. IBM Business Consulting Services delivered SAP s Business Information Warehouse solution rapidly to give DPWN managers the information they need to improve customer service and monitor sales and profit performance in their respective areas of responsibility. IBM s comprehensive process and technology approach produced measurable cost-savings and operational capabilities improvements. With a more responsive On Demand business, DPWN is quickly becoming a global logistics leader able to detect and react to business developments that drive competitive advantage. Unishippers Association Inc. Unishippers is the leading third-party logistics (3PL) service provider helping small and medium-sized businesses streamline their shipping operations with major transportation carriers. Unishippers helps SMBs to lower costs by pooling shipments, leveraging the company s extensive logistics expertise. Unishippers partnered with IBM Business Consulting Services to create sustainable competitive advantage in the marketplace with an On Demand business model, developing a comprehensive customer relationship management solution including streamlined business processes supported by central information management systems from Siebel Systems. The result: Unishippers has improved employee productivity and is forecasting a 20 percent increase in customer retention. Sales growth is expected to increase from 9 percent to 15 percent per year within five years.

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