The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into

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2 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.

3 <Insert Picture Here> Outsource to In-house: Taking Back Control of Transportation Carl Rossi Director, Global Transportation APC Kerry Wigginton Director, Logistics Solutions Oracle

4 Agenda Topic Overview <Insert Picture Here> APC: Carl Rossi Q&A

5 Current State of the 3PL Market Most Customers are Satisfied, But Improvement Opportunities Continue to Exist 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% IT Capabilities Necessary Element of 3PL Expertise Satisfied With 3PL IT Capabilities Source: th Annual Third Party Logistics Study: Views from the Customers: Georgia Tech, CapGemini, Oracle, DHL 5

6 Transportation Management: Outsource or In House? Logistics Excellence Is it a commodity vs. competitive advantage? Control vs. Easy button Are you maintaining control of your network operations? Visibility vs. IT Investment Is it sufficient, or do you make do with what you get? Logistics Expertise Do you have experts in-house? Cost vs. Value Are you getting what you pay for?

7 Different Models Available All In House People/ Process In House Technologies In House Hybrid In House Outsource Hybrid Outsource In House All Outsourced Outsource Outsource Note: Different regions and divisions can have different approaches

8 How Does Oracle Help? A World Class TMS called Oracle Transportation Management Carrier and Rate Management Logistics Order Management Transportation Planning and Optimization Shipment Execution Visibility and Event Management Financial Settlement End-to-End Comprehensive Transportation Management Solution - Rate procurement - Rate maintenance - Carrier scorecarding - Contract and insurance monitoring - Order capture - Change order management - Requirements forecasting - Shipment Planning - Dock appointment scheduling - Container Requirements Optimization - Load Configuration - Cooperative Routing - Carrier communication - Shipment booking and tendering - Re-Planning - Appointment Scheduling - Proactive Exception Management - Shipment, Order, SKU visibility - Track and Trace - Analytics and Reporting - Freight bill audits - Cost allocation - Accruals - Customer billing 8

9 Functional Innovation OTM roadmap to additional value Fleet & Asset Management Manage transportation assets (drivers, trucks, trailers, containers, totes, etc) Global Trade Management Manage all aspects of crossborder transactions Visibility, regulatory compliance, chain of custody, documentation Environmental Sustainability Measurement and minimization of impacts

10 Proof Point: Global Heavy Equipment Manufacturer Scenario Results US was outsourced to 3PL, little control over inbound transportation Wanted to reduce freight costs and increase visibility by streamlining and controlling logistics operations in-house Needed a TMS to support this strategy Reduced Freight Costs Inbound and outbound transaction costs Lower headcount Lower cost carrier selection Payment based on actual shipped weight Increased Visibility Supplier communications Shipment data Rates, freight payment and damage claims Increased Control Carrier KPIs: Service level, cost, quality Supplier compliance to core carriers

11 Where You Should See Value Transportation Sourcing Shipment Planning & Optimization Shipment Execution: Booking/Tendering, Status Updates, En Route Planning 5 20% Rate Improvements from Carrier Bid Optimization Increased payment, auditing and claims effectiveness 3 20% Transportation Cost Savings 5 25% Expedited shipment reductions 5 15% Capacity increase 5 15% Reduction in overall freight cost Reduced errors, increased loads per hour 5-30% Productivity Improvements 1 3 % decrease in transportation costs Supply Chain Visibility/Analytics 2-5% reduction in inventory Lower transportation costs, better supplier and customer relationships Freight Payment/Billing % Reduction of transaction costs 2-5% Reduction of Freight Expense

12 <Insert Picture Here> Carl Rossi Director, Global Transportation APC

13 Who Are We and What Do We Do? COMPANY OVERVIEW American Power Conversion (APC) is $3.5B provider of adaptable networkcritical physical infrastructure to the information technology industry. Founded in 1981, the company's alternating and direct current power products include surge suppressors, uninterruptible power supplies, power conditioning equipment, power management software and direct current power systems, as well as precision cooling equipment and network consulting services. Headquartered in West Kingston, R.I., and maintains sales offices worldwide. The company has manufacturing facilities in Philippines, India and China Schneider Electric acquired APC on Feb. 14, 2007 CHALLENGES/OPPORTUNITIES Moving from outsourced transportation and warehousing to in-house Integration to EBS Ability to manage both inbound vessel from Asia and outbound small package Visibility & Event Management

14 APC Operating Environment Being a global manufacturer with most plants in Asia means spanning a wide range of capabilities: Complete visibility from order entry through carrier payment Visibility to finished product shipping from Asia Container tracking en-route Optimized outbound transportation while considering constraints of the distribution centers All modes of transportation Many languages and currencies

15 Global Footprint

16 The Business Challenge Why In-sourcing? The decision to outsource was made based on forecast savings; Savings never materialized, the opposite occurred costs increased Service provider did not understand business = higher rates Freight under management fees exorbitant Efficiencies never delivered Service provider had poor carrier selection, evaluation process Delivery quality and customer satisfaction declined Challenges included selecting and implementing a new operating system within 3 months; Rebuilding processes and procedures that were lost when function was outsourced; Team concluded best solution was integration to Oracle E-Business Suite

17 How did we start? First Phase: Start in Western Distribution Region Bring up a new building Hire and train staff Transfer inventory Install new TMS and WMS Need to be done in 3 months Outbound was priority Parcel, LTL, TL, Specialized Delivery

18 Why OTM? Tech Enabler for In-Sourcing Transportation Management Ability to manage all transport modes including Ocean vessels Small package Less than truckload Full truckload Visibility & Event Management Transportation Management Transportation Planning Freight Settlement Business Intelligence

19 Transportation Scope - Interface Diagram Outbound Process Carriers Load Tenders Load Tenders Tender Response OTM Master Data Order Management Shipment Planning Shipment Execution Items Locations Service Providers Deliveries (includes Items and Locs) Planned Shipment Shipment Actuals EBS Master Data Order Management Shipment Execution EBS to WMS interfaces do not need to be built. They are already part of the prebuilt integration. Pro # s Etc. Deliveries Actuals Actual Shipment WMS Pick/Pack Manifest Track & Trace Shipment Status Visibility Manifest / Documentation Invoices Shipment Invoice Freight Settlement Payment Voucher Accounts Payable

20 Project Teams Oracle OTM Leadership / Program Mgt (10%) Program Office APC Project Sponsor(s) / Program Mgt (10%) Project Lead (100%) Project Lead (75%) Application Lead (100%) Technical Lead (60%) OTM Install Consultant (15%) 1-2 Super Users (100%) Sys Admin (25%) DBA (25%) Application Consultant (80%) Integration Developer (30%) BPEL Consultant (20%) IT/EBS Analyst (50%) IT Various (50%) Note: These represent project roles. The same person may be responsible for multiple roles.

21 APC Implementation - Future Plans/Vision Complete visibility from order entry through carrier payment ASN s planned 2009 Implement Business Reporting 2009 FBAP project planned to begin late 2009 During 2009 EDI from carriers for shipment status Planned implementations Philippines go-live January 15, 2009 with new Distribution Center International container management Europe project planned to kick off first week of March India implementation projected to begin late Q4 Another busy year for the implementation team!

22 Results to date on target January statistics - Location Picking Weight per LTL Shipments Parcels Full Truckloads Tasks Shipment Cost per LB Chino 13,054 1,058 8, % -19% Middletown 23, , % -29% In-sourcing produced significantly lower rates across all modes; OTM consolidated shipments and selected lowest cost carrier; Middletown start-up issues which were process and staffing related are now resolved Improved capacity weight utilization by 12 25% based on mode Gained additional control over logistics processes by bringing them in house Improved shipment & order visibility

23 Questions And Comments Thank you!