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One Stop Tool/Application for time to market TMS – IT Applications Satya Vabilisetty

July 30th 2013

Copyright © 2013 Deloitte Development LLC. All rights reserved. 1

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


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

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

Business Overview


Business Overview Key Drivers for Advanced Logistics Solutions

Industry Pressures Drive Need For Advanced Logistics Solution


References from Gartner


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

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


Consolidation

• Carrier Selection with least cost • Mode selection • Order constraints met • Distance calculation


Multi-Stop, Multi Leg

Galena Park

Channelview

Marysville

Multistop Shipment Direct Shipment


Multi Stop Shipment

Multi Leg Shipment

Multiple picks and drops

… One order can involve multiple shipments, parties, and modes … Optimization can be performed for unlimited legs and modes

Multiple modes

… OTM will optimize the best option (Direct or Multistop) for given case depending on least cost


Cross Dock


Depot shipment planning

Start

Depot Stops (source & destination being same)

Shipping Line, ICD/CFS

Port 1

Source Carrier 1

Empty Container Movement

Loaded Container Movement

Manufacturer

Port 2

Carrier 3

Carrier 2


Switch B/L


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 3rd party rate engines like Kewill and SMC3 (Rate ware)


Execution

…. Carrier Dash Board to accept / reject /pick-up/ delivery updates


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


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 • 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)

Complete Logistics Network visibility


Visibility Indicators

Shipment Events

Milestone Monitors

... helps faster decision making

… maintains the history of events

... explains the sequence of actions performed


Visibility (Contd.)

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. In essence, mobile applications provide the opportunity to take a streamlined approach to operational efficiency in the transportation industry. Source: Oracle documentation

Mobile Applications

Pickup Status


Result of Visibility

Monitor for planned and actual events

Evaluate Conditions

Execute automatic response

Notify affected parties

Anticipate Analyze Resolve Collaborate

• Configure monitors to track orders against shipment milestones

• Confirm events or identify missed, abnormal, and out-of-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


Inclusiveness with Trade Partners

Source: oracle documentation


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


External Rating Engines


Parcel & LTL Shipments built through External Rating Engines LTL Shipment

Kewill Shipment


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


Financial Settlement (cont.)

Carriers

Financial System

Shippers / Customers • Allocate costs

to orders & order lines for billing

• Apply appropriate GL codes based on

order characteristics

• Calculate profit margin for each

shipment

• AR & AP Vouchers

Invoices via integration

Pay based on actual shipment

activity and contract rates Au

to-P

ay

Payments Payments

Bills via integration

OTM

Bill

ing

Generate Customer Bills after adding the

profit margin

Sell Shipment Settlement Buy Shipment Settlement


Financial Settlement (cont.) Invoice

GL code

Voucher


Financial Settlement – Credit Check

Credit Status

Present Limit USD 2,400,000.00

Current Outstanding USD 2,740,988.61

Provides ‘entry control’ check by triggering the credit check on creation of the relevant business objects

Credit Check


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

DATA Control

OTM Server

1. Request for Fuel

Price

2. Request to DOE Web Site for Fuel Price

History file

3. File Download 4. Reading latest

fuel prices & effective expiry

dates

5. Update Rate Factor


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


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


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

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


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)


Benefits (cont.)

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 : [email protected]

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