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Oracle In-Memory Logistics Command Center (LCC) Ignas Ponsioen Principal Sales Consultant Derek Gittoes Vice President, Value Chain Execution Product Strategy 20 March 2014
Agenda LCC Product Overview LCC Product Demonstration Q&A 3
Oracle In-Memory Logistics Command Center 4
Supply Chain Resilience ACHIEVE HIGH LEVELS OF PERFORMANCE ON A CONSISTENT BASIS IN LIGHT OF UNPLANNED DISRUPTIONS, DEMAND AND SUPPLY VOLATILITY, AND CHANGING BUSINESS CONDITIONS 5
Supply Chains Are Changing Current Demands New products & markets Mergers & acquisitions Regulatory changes Cut costs Improve service 6
Adaptation and Growth How Do You Respond to disruptions and major changes Measure impact of changes Design intelligent responses Develop contingency plans Enable continuous improvement processes 7
Agility What if you could. Create scenarios using realworld data and constraints Simulate quickly the business outcomes for each scenario Perform what-if analysis Compare results side-by-side with meaningful metrics 8
Speed and Flexibility Why hasn t it been done before? Big data constraints Solver constraints Ease of analysis Network optimizers: too high level 9
Oracle In-Memory Logistics Command Center What-If Planning & Simulation Key Features Scenario management Planning & simulation engines Analytical dashboards Integration with OTM 10
Oracle In-Memory Logistics Command Center Project & Scenario Management Scenario Management Create and manage multiple projects, each with multiple scenarios Scenario management functions: create new scenario, copy, apply data rules, create and remove data Define associated scenario data: orders, carriers, planning parameters, etc Launch planning engine and scenario analysis dashboard 11
Oracle In-Memory Logistics Command Center What-If Planning & Simulations Example Scenarios Network disruptions (e.g. closed ports) Freight cost changes (e.g. fuel charges) Service provider/mode changes Budgeting Network design (e.g. new cross-dock) Sustainability impacts Capacity forecasting Sensitivity analysis New customer profitability analysis 12
Oracle In-Memory Logistics Command Center Packaged Analytics Scenario Analysis Analyze plan results for each scenario (e.g., cost metrics, utilization, network efficiencies) Compare results side-by-side between scenarios to determine which plan to execute Pre-built dashboards Slice-dice, create your own ad-hoc queries, dashboards 13
Product Demonstration 14
Demo Use Cases Rate Change Analysis Scenario: LTL Carrier proposes increase in Rates Analyze impact to network and consider alternate strategies Network Disruption Scenario: Prepare for situation in which a crossdock closure occurs. Analyze impact to network and determine alternate network options New Customer Inclusion Scenario: Evaluate what happens when a New Customer s order set is introduced into your existing network. Analyze impact including New Customer s orders into network and impact on cost and revenue 15
How Does It Work? Logistics Command Center Packaged Integration to OTM Select data and create scenarios Run Scenarios Operational OTM Take Action Analyze Results 16
Use Case: Rates Change Analysis 17
Use Case: Rate Change Analysis Description Scenario: LTL Carrier proposes increase in Rates Objective: Analyze impact to network and consider alternate strategies Action: Use results to negotiate with Carrier. Potentially implement alternate strategies to reduce impact to spend. 18
Use Case: Rate Change Analysis Approach 1. Create and run Baseline scenario to capture metrics for current operations 2. Create and analyze second scenario to model rate increase for LTL carrier 3. Analyze how OTM minimizes impact by shifting shipments to other alternate carriers and mode (LTL to TL Stopoff, for example) 4. Create third scenario to show impact of additional capacity from core TL carrier 5. Analyze results and savings if more capacity is available from TL carrier 19
Rate Change Analysis Project 20
Rate Change Analysis One of the Scenarios 21
LCC Technical Architecture 22
Use Case: Rate Change Analysis Results YFSY (LTL Carrier) had proposed 25% increase in rates! Results: Spend on YFSY in Baseline: $192,222.43 No change implies increase in total Transportation spend of: $48,055.60 (~5% of total spend) Actual increase in operational Transportation Spend (due to OTM optimization): $39,807.54 (4%) Orders shift from YFSY (LTL) to SCNN (TL) and DELV (TL) Spend on YFSY decreases from $192,222.43 to $117,298.83 (~40% decrease!) 23
Use Case: Rate Change Analysis Results Results: Most orders shift to DELV since SCNN is at limits Relaxing capacity limits on SCNN causes spend increase to drop to: $23,152.29 (2.4%) Action Plan Show YFSY that he loses market share and revenue with rate increase to negotiate increase down Procure additional capacity from SCNN on key lanes to maximize savings 24
Additional Demo Use Cases Network Disruption Scenario: Prepare for situation in which a crossdock closure occurs. Analyze impact to network and determine alternate network options New Customer Inclusion Scenario: Evaluate what happens when a New Customer s order set is introduced into your existing network. Analyze impact including New Customer s orders into network and impact on cost and revenue 25
Use Case: Network Disruption 26
Use Case: Network Disruption Description Scenario: Prepare for situation in which a crossdock closure occurs Objective: Analyze impact to network and determine alternate network options Action: Use results for preparedness plan 27
Use Case: Network Disruption Approach 1. Create and run Baseline scenario to capture metrics for current operations which includes crossdock routing Westchester Crossdock 28
Use Case: Network Disruption Approach 1. Create and run Baseline scenario to capture metrics for current operations which includes crossdock routing 2. Create and analyze second scenario to network without the crossdock 29
Use Case: Network Disruption Approach 1. Create and run Baseline scenario to capture metrics for current operations which includes crossdock routing 2. Create and analyze second scenario to network without the crossdock 3. Create and analyze a third scenario to show the impact of utilizing a part of a Distribution Center already in our network to serve as a crossdock Columbus Distribution Center 30
Use Case: Network Disruption Approach 1. Create and run Baseline scenario to capture metrics for current operations which includes crossdock routing 2. Create and analyze second scenario to network without the crossdock 3. Create and analyze a third scenario to show the impact of utilizing a part of a Distribution Center already in our network to serve as a crossdock 4. Create and analyze fourth scenario to show impact of introducing a 3 rd party crossdock into the network Ft. Wayne Crossdock 31
Use Case: Network Disruption Results The Westchester crossdock is removed from your network Results: Total spend in Baseline: $1,014,519.76 Increase in TL (SCNN) and LTL (RDWY and YFSY) shipment costs Total spend with no crossdock: $1,139,066.91 32
Use Case: Network Disruption Results Using Columbus, a DC in our network, or using a 3 rd party crossdock in Ft. Wayne Results: Baseline is the least expensive solution Mode selection is spread the same 33
Comparing Fort Wayne Xdock and Columbus Using the Analysis Dashboards the user drills into the scenarios to understand the cost differences Handling cost difference between internal Columbus DC $7,163 and third party Fort Wayne $19,070. Savings of $11,907 by using Columbus TL cost difference between internal Columbus DC $977,983 and third party Fort Wayne $952,939 increased the payout to TL carriers by $25,044 34
Network Disruption Conclusion Evaluating and understanding the cost for multiple scenarios, we are better able to handle this network disruption Cost of flowing the crossdock freight to direct LTL and TL will be expensive over a long closure Initial result showed Fort Wayne crossdock with a slight advantage over Columbus DC scenario Further analysis revealed the potential to work with the third party carrier to negotiate better handling costs for the optimal plan 35
Use Case: New Customer Inclusion 36
Use Case: New Customer s Orders Description Scenario: Evaluate what happens when a New Customer s order set is introduced into your existing network. You have received an order set from the new customer that spans an eight week period to use for this evaluation. Objectives: Analyze impact including New Customer s orders into network from both buy and sell perspectives. Evaluate if have sufficient carrier coverage for the New Customers Lanes and to evaluate where there might be consolidation opportunities. Quantify Cost-to-Serve and Profit-to-Serve new customer 37
Use Case: New Customer s Orders Approach Yields 6 Scenarios o o o Three Scenarios to analyze buy side impact Create and run scenario to capture metrics for current operations Create and analyze second scenario which just includes in the new customer s orders Create and analyze a third scenario to show the impact of including the new customer s orders o o o Three Scenarios to analyze the sell/profit impact Create and run scenario to capture metrics for current operations Create and analyze second scenario which just includes in the new customer s orders Create and analyze a third scenario to show the impact of including the new customer s orders 38
New Customer Orders Project A Closer Look Only the Order Set varies between Scenarios it is of Project Type SAME REFERENCE DATA (Reference Data = Carriers/Rates/Itineraries/Etc) Creates an Order Set Copy for each scenario All data, reference data and orders, reside in single schema Note when Server is assigned to Project is it relevant for each Scenario as well 39
Use Case: New Customer s Orders Results Total Cost Analysis: Total spend in not new: $1,192,190.83 Total spend if planned New and Existing separately: $1,595,268.61 Total spend if planned New and Existing together : $1,586,114.52 Cost Delta: $9,154.09 Other Observations 2.8% fewer shipments Avg. Number of stops increase Various other metric improvements 40
Use Case: New Customer s Orders Results Mode Analysis: New Customer Orders are consolidated with existing orders Parcel shipments reduced 22.7% LTL shipments reduced 53.8% TL shipments reduced 1.1% Mode/Cost Shift LTL Reduction = $8351.68 Parcel Reduction = $882.94 TL Increase = $80.53 41
New Orders Sell Analysis Bulk Plan Sell Shipments for each Scenario $0.10/LB with a minimum charge of $250.00 Profit before inclusion of New Customer Total Spend = $1,192,190.83 Total Sell Shipments = $1,977,831.40 Previous Profit = $785,640.57 Profit with inclusion of New Customer Total Spend = $1,586,114.52 Total Sell Shipments $2,450,084.00 Total Potential Profit = $863,969.48 Netting it out Profit Increase = $78,328.91 BUY SELL 42
Using LCC for What If Analysis Enables use of OTM for strategic decision making 1. Easily manage multiple sets/copies of data 2. Easily make modifications to the different sets of data 3. Accelerate bulk plans required to plan all the data 4. Deliver Easy to use Comparison Reporting for analyzing the results 43
Summary 44
Oracle In-Memory Logistics Command Center What-If Planning & Simulation Key Features Scenario management Planning & simulation engines Analytical dashboards Integration with OTM 45
Oracle In-Memory Logistics Command Center Key Differentiators Oracle In-Memory Logistics Command Center analyzes scenarios with high-fidelity operational detail No aggregation, estimation or inaccuracies involved E.g., real rates, carriers, equipment, capacity Simulate detailed operations over long horizons with big data Support for both Strategic and Operational Scenarios Packaged integration to operational OTM environment 46
Oracle In-Memory Logistics Command Center What-If Planning & Scenario Management Benefit Drivers Increase supply chain resiliency Increase supply chain agility Reduce supply chain costs Improve corporate sustainability Optimize network evolution Drive new revenue 47
Questions? 48
Safe Harbor Statement The preceding 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. 49
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