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Otm 2013 c13_e-14a-pospelov-evgeniy-taking-control-over-transportation-spend

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  • 1. Oracle Transportation ManagementKraft Foods Russia Evgeniy Pospelov Business Process Development CS&L
  • 2. Russian Federation overviewPopulation 143 MMArea 17mm sq.km = (1/8) of all the Earth160 ethnic groups speak about 100 languages137 million people speak Russian
  • 3. European and Asian Parts Km 1000 2000 3000 4000 5000 6000 7000 Days 4 8 12 16 20 24 28 Saint-Petersburg Up to 3 days delivery Up to 8 days delivery Up to 40 days delivery Ekaterinburg Moscow Novosibirsk Irkutsk Khabarovsk Vladivostok73% Urban, highly educated13 cities with population over 1 Mio (only 4 of them in Asian part of the country)
  • 4. Kraft Foods Brands in Russia
  • 5. Current Logistics Network CustomersImport & Co-man Coffee CustomersSalty Snacks Choco Biscuits Customers Gums&Candy
  • 6. Why we decided to implement professional TMS?• Significant Business Volume Growth didn’t allowed us to manage logistic operations manually or in home-made systems• We were looking for intensive way of planning and execution of operations in horizon > 1 week• Carriers’ level of development didn’t allow us to outsource operational tasks - lack of trucks on Russian Transport Market and flexible transport policies of our competitors – led us to necessity of: – Increasing truck availability for transport execution on the planning horizon more than 1 week – Maximizing truck utilization – Proper warehouse gate management to control transport demurrage at the warehouse – Decreasing “Dead Miles” and number of one-way routes for every truck• We needed full visibility of all logistics processes on every stage of the execution on the daily basis 6
  • 7. Business Goals Compliance with the needs of a growing business To increase transport availability for Kraft Foods Maximization of truck utilization To manage workload of the warehouses to prevent demurrages To have full visibility and transparency of all logistics processes at all stages of execution on a daily basis Automatic consolidation of orders to increase the intensity of transport usage Optimal routing considering customers’ specific requirements To minimize employees workload for daily operations 7
  • 8. Full coverage of logistics processes  Products Master Data Master Data  Vendors, Customers, Logistics Providers Master Data Synchronization  Orders integration with ERP systemOrder Management  Orders Consolidation  Automatic truck type choice  Optimal route planning considering customers requirements and workingShipments Planning hours  Warehouse gate management  Online Tendering in OTM and automatic notifications by emailCooperation with  All operational transportation reports and legacy forms are printed from OTM 3PLs  Each participant enters main control points of shipment execution in online mode  Kraft Foods employees are able to check what is happening with the orders at anyShipment Execution time  Carriers can check shipment cost at tender stage  Cost issues of are solved at the stage of shipment coordination/execution, not after Finance 8
  • 9. The complete cycle of transport logistics: international inbound, national inbound and outbound International Inbound LogisticsKraft Foods Plants in EuropeNational Inbound National Inbound LogisticsLogistics Outbound logisticsKraft Foods Plants in Russia Central Warehouses Regional Warehouses 9
  • 10. Import, export and customs• Transportation planning considering of customs operations• A complete picture of costs: transportation, customs fees, brokerage and storage in bonded warehouses• Tracking the status of customs clearance• Online access to legacy documents scan copies 10
  • 11. Well-established communications across the supply chain• Full visibility of shipment status in key points• Online access to information about the current status of the shipment and delivery• Rapid response to changes from Kraft side• Notifications of significant changes by the email• The necessary information to all the participants for the right decision-making 11
  • 12. Accurate palletizing - optimum loading• Calculation of full standard pallets and pallets with customers’ height restrictions• Calculation of mixed pallets• Truck loading optimization considering pallet sizes and equipment sizes 12
  • 13. Autoinvocing - simplicity, transparency and trust• Proper rate records management helps to keep the actual cost of each shipment• Most of orders are processed automatically in Bulk Plan mode• The cost of transportation services for the period consolidated and billed by transportation companies 13
  • 14. Business Results• System Geography: − 15 international plants − 5 local plants − 4 Warehouses − 2 Copacking Manufactures − 3 Contract Manufactures − ~ 30 Carriers − ~150 users• The harmonization process of transport, customs clearance, factories, warehouses : – Stability and transparency in logistics operations – The distribution of shipments over time, depending on the load of the warehouse on a particular date – Reduction of logistics costs in connection with the choice of the optimal route and the carrier – Ability to track key operational KPI• Automatization of operations to reduce transportation and operational costs – Automatic split of shipments among the carriers – Truck Loading optimization – Routes optimization 14
  • 15. Business benefits are:• Harmonization of transport, customs brokers, factories, 3PL WHS’s , and CDP’s operations and processes: – Workload optimization – Stability in operations – Visibility of all LO processes – Improve of scheduling at 3PL WHS’s (including inbound, outbound, picking operations and gates/docks management) due to smooth volume split within 24 hours• Opportunity of demurrage decrease at loading/unloading locations• Returns management• Opportunities of future overhead reduction• Transparent KPI monitoring for better collaboration with LSP (DC, Transport companies and customs brokers)
  • 16. Thank you!