One Stop Tool/Application for time to market TMS IT Applications Satya Vabilisetty July 30 th 2013
References S.NO Industry $ Revenue Type of engagement 1 High Tech USD 46 B Implementation/Business Consulting 2 Life Sciences USD 3 B Implemented the Inbound & Out Bound transportation processes with OTM 3 Agriculture USD 6.4 B Implementation of the core modules in OTM with GTM for Global Trade compliance 4 Oil & Gas USD 4.5 B Implementation & Support of the core planning & Execution with Freight Settlement 5 Manufacturing USD 7.7 B Implementation 6 Federal USD 2 T (Debt) Implementation 7 Logistics 3PL USD 3.5 B Consulting 8 C & IP USD 9 B Implementation 1
Contents Background 3 Business Overview 5 Transportation Components that make OTM (Oracle Transportation Management) the One Stop Application Planning Rates Execution Visibility Inclusiveness with Trading Partners External Rating Engines Freight Settlement Integrating with Various Govt. Agencies for Global Trade Security Benefits 37 Q & A 39 2
Background
Background Running a single-transport mode business or a multimodal network, transportation logistics can be a nightmare. Transportation management is different from other processes in the supply chain: Many of those happen only once, but transportation must be addressed again and again throughout the lifecycle of product development and delivery Each and every time you must manage the process effectively while minimizing costs and providing better customer service requirements Possible? Definitely It all comes together with Oracle Transportation Management: A Web-based transportation and logistics application A multi-enterprise structure that is both configurable to local practices and standardized for global operations OTM provides one stop solution on: Planning & execution Inventory positions Shipment lead times Delivery dates Freight costs Lane volume forecasts(business Intelligence), and more Global Trade Management From sourcing trading partners to monitoring shipments to eliminating inefficient and redundant procedures the fact is, you can have it all. One Stop Solution. That s what makes Oracle Transportation Management different from the competition and right for your company 4
Business Overview
Business Overview Key Drivers for Advanced Logistics Solutions Industry Pressures Drive Need For Advanced Logistics Solution 6
References from Gartner 7
One Stop Solution In the present competitive world of any enterprise small/medium/big, time to market is a very important and strategic move to be a leader in the market and to achieve that, organizations are keen in investing money which would drive their bottom line numbers. To achieve the above one of the present areas of improvement for any organization would be the transportation IT infrastructure. In this process investing in OTM (Oracle Transportation Management) a market leader in TMS applications could really benefit the organizations in building/improving their transportation IT systems which would deliver the below 8
Transportation Components that make OTM (Oracle Transportation Management) the One Stop Application
Planning I need consolidation & deconsolidation I want Multi Stop and Multi Leg Shipments Can International Shipments be routed through OTM Want Shipments with Cross docking functionality Can there be a LTL & TL modes Depot Functionality I want a Switch B/L 10
Consolidation Carrier Selection with least cost Mode selection Order constraints met Distance calculation 11
Multi-Stop, Multi Leg Galena Park Direct Shipment Multistop Shipment Channelview Marysville 12
Multi Stop Shipment Multiple picks and drops OTM will optimize the best option (Direct or Multistop) for given case depending on least cost Multi Leg Shipment Multiple modes One order can involve multiple shipments, parties, and modes Optimization can be performed for unlimited legs and modes 13
Cross Dock 14
Depot shipment planning Port 1 Port 2 Carrier 3 Shipping Line, ICD/CFS Carrier 2 Empty Container Movement Manufacturer Start Source Loaded Container Movement Carrier 1 Depot Stops (source & destination being same) 15
Switch B/L 16
Rates OTM has a very robust rate management features across various Industries E.g.: Manufacturing, 3PL, Service Providers, Hi-Tech, Freight Forwarding etc. Supports multiple pricing strategies Cost-of-service strategy : Carrier estimates cost of providing service then adds on a percent profit margin. Commonly used for pricing transport of low value goods or in highly competitive situations Value-of-service strategy: price is based on value as perceived by the shipper rather than the carrier. Commonly used when services are sold in niche markets Combination pricing strategy: price is set at a value between cost-of-service minimum and value-of-service maximum. Most common pricing strategy Net-rate pricing strategy : is a simplified pricing format, Established discounts and accessorial charges are rolled into one all-inclusive price tailored for individual customer needs Complex Rate Contracts for various modes(tl, LTL, Ocean, Parcel) can be easily defined Transport Mode Distance travelled Dimensional Weight & Volume Weight Break Profiles & Deficit Rating Standard Product Classes (NMFC) Service Levels Apart from Basic rates, certain additional Surcharges are also levied by service providers such as: Loading and Unloading Handling Fuel Surcharge Insurance & Documentation Charges Parcel & LTL rates can be obtained by 3 rd party rate engines like Kewill and SMC3 (Rate ware) 17
Execution. Carrier Dash Board to accept / reject /pick-up/ delivery updates 18
Visibility What the users need Can I have various statuses/events of my Orders/Shipments displayed Can I have a color coded display with images & indicators Can I have an application which will provide more visibility and help shippers react to changes leading to improved performance and cost savings Can I have a single source which can view and manage all my inventory positions 19
Visibility Visibility across entire logistics operation enables new business initiatives, reduces inventory and improves service levels Oracle Transportation Management can provide various: Statuses Events Milestones Complete Logistics Network visibility Colored Indicators/Images Alerts / Notifications Across The entire supply chain All roles: suppliers, planners, service providers, customers and management All phases: before (planning), during (execution), and after (improvement) 20
Visibility Indicators... helps faster decision making Shipment Events maintains the history of events Milestone Monitors... explains the sequence of actions performed 21
Visibility (Contd.) Pickup Status Mobile Applications With smartphones dominating the consumer market, it is more possible now than ever to conduct business while on the move. What does this mean for the transportation industry? It means drivers can have the increased ability to communicate transit information to agents and carriers, while agents can have a snapshot of every load they've brokered in their pocket. Source: Oracle documentation 22 In essence, mobile applications provide the opportunity to take a streamlined approach to operational efficiency in the transportation industry.
Result of Visibility Anticipate Analyze Resolve Collaborate Monitor for planned and actual events Evaluate Conditions Execute automatic response Notify affected parties Configure monitors to track orders against shipment milestones Confirm events or identify missed, abnormal, and outof-sequence events Customize logic to interrogate all incoming events Trigger follow-up actions according to pre-defined conditions and thresholds Automatically perform actions (e.g., re-planning) in response to common problems Initiate resolution workflow based on changing conditions Notify / alert internal and external users or IT systems of an event or action Prompt users for response and process iteratively until resolved 23
Inclusiveness with Trade Partners Source: oracle documentation 24
Inclusiveness with Trade Partners When you communicate your pickup requests electronically, you reduce costs and eliminate communication delays that are common to manual requests by phone or fax Carriers can immediately accept or reject pickup requests using email notification or the Web which in turn will reduce the delay in pickup s through manual communication and will increase the turn-around time by delivering the product right at time to the customer /destination Your carriers are more efficient, your customers get more details, and you save money Suppliers can plan the Shipments properly through the pick up schedules which improves 25
External Rating Engines 26
Parcel & LTL Shipments built through External Rating Engines LTL Shipment Kewill Shipment 27
Financial Settlement Invoice & Vouchers have to be integrated to the AP system Match/Approval process to be available Credit check to be performed before the planning process GL codes to be assigned to every cost line 28
Financial Settlement (cont.) Buy Shipment Settlement OTM Sell Shipment Settlement Carriers Invoices via integration Billing Auto-Pay Generate Customer Bills after adding the profit margin Pay based on actual shipment activity and contract rates Allocate costs to orders & order lines for billing Apply appropriate GL codes based on order characteristics Calculate profit margin for each shipment Bills via integration Shippers / Customers AR & AP Vouchers Payments Financial System Payments 29
Financial Settlement (cont.) Invoice GL code Voucher 30
Financial Settlement Credit Check Credit Status Present Limit USD 2,400,000.00 Current Outstanding USD 2,740,988.61 Credit Check Provides entry control check by triggering the credit check on creation of the relevant business objects 31
Integrating with various Government Agencies Oracle Transportation Management application can be integrated to various Government Agencies through which the transportation needs can be easily performed DOE (Department of Energy) for Fuel Surcharge Extract the real time fuel prices on a weekly basis and calculate the fuel surcharge cost accurately Automatically receive the Diesel prices into OTM and process the rate factor without any manual intervention OTM DB 1. Request for Fuel Price 5. Update Rate Factor DATA Control 2. Request to DOE Web Site for Fuel Price History file 4. Reading latest fuel prices & effective expiry dates OTM Server 3. File Download 32
Integrating with various Government Agencies (cont.) US Customs for Truck AMS/AES Send the Shipment details which needs to be filed for Export/Import Automatically receive the confirmation of acceptance or rejection status of the Shipment Shipper/Broker to reconcile the Shipment details if rejected Data Storage/ File download 33
Security I want my data to be secure Transportation team should not have the access to rates Service desk personnel should only reset the password A super user can reset his own password 34
Security (Contd.) Flat domain design is generally used when multiple clients share same OTM instance Parent/Child domain designs are intended primarily for 3PL s that do consolidation on behalf of their customers. There would be a top level 3PL domain, and multiple child domains corresponding to each customer of the 3PL 35 Standalone Subdomain Lite Subdomain
Security (Contd.). Planner do not have the access to view the invoices Service desk personnel can only edit the password field Super user can update his own password 36
Benefits Reduction in Cost (Optimization) Quicker Turn Around time (Carrier Selection, Routing Options, Rates) More Space Utilization (Optimization, Capacity Commitments) High Visibility Reduction in the Leakage of Freight (Carrier Contracts, Freight Audit, Match/Approval Rules) Seamless integration with 3rd party systems Inclusiveness of the Trading Partners (Carriers & Vendors can be directly connected on the same Web based Applications) User Access One Application (Low Maintenance) 37
Benefits (cont.) 38
Questions & Answers
Application Management Services Deloitte has been supporting global clients and their complex, distributed application solutions for more than 25 years. We provide full life cycle Application Management Services, spanning the entire continuum from upfront advisory services through application optimization and innovation. Contact : svabilisetty@deloitte.com