OTM as a Service DifferentiatorOTM SIG Conference, Amsterdam 29th Jan 2013
Agenda     About APL Logistics     Sourcing a Solution            g     Bringing Value & Differentiation to Supply Chain S...
APL Logistics - part of a global and integrated supply    chain provider        Terminal Operations                Contain...
NOL Value Chain    A key differentiator of the NOL Group is our market-leading ability to provide reliable and    time-def...
Broad Product Suite and Strong Customer Base    APL Logistics has a broad product suite. With over 800 customers worldwide...
Sourcing a Solution
Sourcing a Solution: Identifying Manual Work          APL Logistics Operations                                            ...
Sourcing a Solution: Business Complexity                                            Planning is complicated!           Too...
Product Selection Needs     Need for an “off the shelf” product      – Flexible      – Highly configurable     Must orches...
Why Oracle OTM    OTM offers many out of the box configurations, workflow and algorithms which allow    modeling of comple...
APL Logistics OTM Journey                                                                                                 ...
OTM: Bringing Value &           g gDifferentiation to Supply ChainSegments – Land Transport   g                    p
Land Transport: Flexibility in Order Creation       Orders are received by APL Logistics from Customers’       ERPs via In...
Land Transport: Flexibility in Order Creation     Order Entry via Templates13                               Strictly Confi...
Land Transport: Flexibility in Shipment Planning                                           Planning Consolidated Shipments...
Land Transport: Flexibility in Shipment Planning                                              Planning Multi-stop Shipment...
Land Transport: Flexibility in Shipment Planning                                             Planning Multi-stop Shipments...
Cost Savings Calculation for Direct,     Consolidation and Multi-stop Shipments     Cost Savings (at shipment level) are c...
Cost Savings Calculation for Direct,     Consolidation and Multi-stop Shipments      Cost Savings at the shipment level wi...
Land Transport Case Study
Background: Customer and APL Logistics      Customer      – World Class Global Science and Engineering Products and Servic...
Business Challenge with Older OTM      APL Logistics managed Customer’s freight operations using      Customer’s OTM v4.0 ...
Solution      Migrate and Upgrade TMS Solution                          OTM Supported Services      to APL Logistics      ...
Benefits        More automated, less manual                             Extensive Ops. & Mgmt. Reporting        processes ...
ShipmentOptimizer™ Video
OTM: Bringing Value and           g gDifferentiation to Supply ChainSegments - International   g
OTM as a Service Differentiator       Automated Shipment Planning which          Respects business rules          Dynamica...
Considers Incompatibilities During Bulk Planning         Example of business rule :              CFS load and Factory load...
Dynamically Decides Best Route on Various     Modes of Transportation       Decide on routes on various transport mode bas...
Optimization Algorithm for Best Container Mix                                                                            “...
Automated Exception Detection       System is configured with customer-specific exception rules          EBAs             ...
Recommends Optimal Shipment Proposal       Optimization result after automatic bulk planning                  Recommends b...
Shipment Approval Screening                                                             Request for                     Ca...
Shipment Collaboration       After Reviewing shipment APL Logistics’ operations inputs Shipping       Instruction before t...
Shipment Collaboration – Approval Work Queue                                                Approval workflow             ...
Shipment Collaboration –     History of Shipping Instructions and Actions35                       Strictly Confidential
International Case Study
Volatile consumer demand and supply shifts, coupled with a huge number of     trade lane possibilities make delivering the...
Case Study – Evolution of Value       Immediate Value Proposition        – Implementation           • Process yields bette...
39   Strictly Confidential
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Otm 2013 c13_e-22a-lim-joshua-otm-as-a-service-differentiator

  1. 1. OTM as a Service DifferentiatorOTM SIG Conference, Amsterdam 29th Jan 2013
  2. 2. Agenda About APL Logistics Sourcing a Solution g Bringing Value & Differentiation to Supply Chain Segments – Land Transport Land Transport Case Study ShipmentOptimizer ShipmentOptimizer™ Video Bringing Value & Differentiation to Supply Chain Segments – International International Shipment Case Study1 Strictly Confidential
  3. 3. APL Logistics - part of a global and integrated supply chain provider Terminal Operations Container Shipping Supply Chain Management Top 10 global terminal operator World’s 7th largest container Top 25 Global 3PL 10 terminals in the U.S. and shipping line 15.8 million sq. ft. of Asia. 153 vessels ship to 25,000 warehouse; operates in 260 Revenue: US$503M locations in 140 countries locations across 56 countries Revenue: US$7 9B R US$7.9B Revenue: US$1 4B R US$1.4B2 Strictly Confidential
  4. 4. NOL Value Chain A key differentiator of the NOL Group is our market-leading ability to provide reliable and time-definite services along the value chains we control Origin Services Destination Services Our Value Chain Warehouse Land Consol Terminals Container Shipping Terminals Deconsol Land Warehouse Visibility As supply chains become more complex our “total value chain proposition offers strong complex, total chain“ advantages for customers.3 Strictly Confidential
  5. 5. Broad Product Suite and Strong Customer Base APL Logistics has a broad product suite. With over 800 customers worldwide, we are a preferred partner in managing supply chains. Warehousing and distribution Global freight management Supply chain management OceanGuaranteed® LCL service 15.8m sq. ft. of warehouse space Freight delivery service with Supply chain management Guaranteed, door delivery of LCL worldwide multimodal transportation solutions that reduce cycle time freight from key markets in Asia and inventory levels to North America Manufacturing support Consolidation and vendor APL Guaranteed™ Continental Asset management On-time d li O ti delivery and hi h quality d high lit services FCL service A complete range of asset l t f t service with various process Consolidation of merchandise, Guaranteed, door delivery of management solutions to management solutions information and documents with FCL freight from key markets in facilitate the global flow of goods 200 facilities worldwide Asia to North America REPRESENTATIVE CUSTOMER SEGMENTS Automotive Consumer Goods Chemical Fashion Hi-tech Industrial Retail4 Strictly Confidential
  6. 6. Sourcing a Solution
  7. 7. Sourcing a Solution: Identifying Manual Work APL Logistics Operations Customer Logistics Planner 1. 1 Receive b ki R i bookings 8. 8 Receive approval request R i l t 2. Refer to customer’s logistics emails from multiple origins 7. Approval email to customer (e.g. SHA, JKT, SIN, HKG) procedure 3. Validate booking 9. Check if voyage meet delivery dates 4. 4 Manually plan route 12. Approval email to APL Logistics 10. Any exceptions (e.g. urgent 5. Manually group bookings shipments, change mode) 6. Enter plan information in email 11. Enter shipping instructions via email Manual work via email, phone to collaborate bookings and shipments between LSP and customers Difficult to track communication and instructions APL Logistics’ customers are leaning their workforce in logistics department (same amount of work, less people)6 Strictly Confidential
  8. 8. Sourcing a Solution: Business Complexity Planning is complicated! Too many bus ess rules in a fast moving ope a g e oo a y business u es as o g operating environment. Violations o bus ess rules b g o e o a o s of business u es bring customer dissatisfaction and may result in shipment delays or incur extra freight cost Co-loading Destination Delivery window Multiple store in 1 Launch Commodity container Jacksonville All able to co-load Allowed Max 5 days before delivery date Launch cannot be Footwear cannot be Pittsburgh Pitt b h Not ll N t allowed d mixed with non-launch co-loaded with Garment Max 10 days before Garment cannot be San Antonio Not allowed delivery date co-loaded with Equipment Max 3 days before Sacramento Ok to mix All able to co-load co load Allowed delivery date7 Strictly Confidential
  9. 9. Product Selection Needs Need for an “off the shelf” product – Flexible – Highly configurable Must orchestrate between Logistics Service Provider and customer to make shipping decisions Must be able to streamline and standardize operational processes Has advanced functionality to automate and comply with customers’ shipment planning process – Co-loading and incompatibilities – Routing guide – Pl Planning algorithm i l ith Audit trail capabilities Repeatable deployment8 Strictly Confidential
  10. 10. Why Oracle OTM OTM offers many out of the box configurations, workflow and algorithms which allow modeling of complex business rules Configure Business Rules in OTM Containers and specifications Bulk plan Loadability approval rules per Selection criteria customer Workflow Equipment Equipment allocations Business Rules Shipper locations Screenset Consolidation Freight Station (CFS) Menu Ocean ports Actions Deconsolidation facility VPD Container yard Business monitor Customer DC / Store location Saved query Locations Regions User Interface Traffic light indicator Itineraries (Ocean, Land, Air) Optimization Arbitrary algorithm Transit-time Voyage schedules V h d l Routes Shipments Rate service Order base Rate offer Order release Rate record Buy / Sell shipments y Rates Arbitrary rates Operational Reports9 Strictly Confidential
  11. 11. APL Logistics OTM Journey Shipment Manager for a major Sporting Apparel and Accessories company in North America Shipment Manager for a leading Sports Footwear company in North America Domestic Land Transport Optimization for a large Chemical Domestic Land company in North America Transport Optimization in Europe for a Key Retailer Shipment Manager in Asia and Europe p 2009 2010 2011 2012 APL Logistics purchases International ShipmentOptimizer for Domestic Land Transport Oracle OTM a Leader in Sports and Apparel in Optimization in China for a software Asia, North America and Canada Key Retailer10 Strictly Confidential
  12. 12. OTM: Bringing Value & g gDifferentiation to Supply ChainSegments – Land Transport g p
  13. 13. Land Transport: Flexibility in Order Creation Orders are received by APL Logistics from Customers’ ERPs via Integration Orders can be created by users through the following means: – Mass Order Upload – via Excel spreadsheets • Post-operations upload of orders for recording purposes – Mass Order Entry – via UI y • Part of Mass Order Upload • Manual entry and correction of orders – C t N Create New O d – U i order t Order Using d templates l t • Capture of inbound orders over the phone12 Strictly Confidential
  14. 14. Land Transport: Flexibility in Order Creation Order Entry via Templates13 Strictly Confidential
  15. 15. Land Transport: Flexibility in Shipment Planning Planning Consolidated Shipments Same ship point with one drop - simple consolidation – Can use SRO or BP DNH1_SHIPPOINT_00001 DNH1 SHIPPOINT 00001 30297 162_55437756_SAPWP1_00001 30297-162 55437756 SAPWP1 00001 A B Select Orders and click on Bulk Plan or Multi-Stop to plan the orders onto a consolidated shipment14 Strictly Confidential
  16. 16. Land Transport: Flexibility in Shipment Planning Planning Multi-stop Shipments DNH1_SHIPPOINT_00001 70807_55364261_SAPWP1_00 DNH1_SHIPPOINT_00001 30297-162_55437756_SAPWP1_00001 Select orders for multi stop planning and click on Actions > Bulk Plan multi-stop15 Strictly Confidential
  17. 17. Land Transport: Flexibility in Shipment Planning Planning Multi-stop Shipments Orders Order 1: Orange, TX to Wisconsin with 30,000 lbs. Order 4: Indiana Order 2: Orange, TX to Illinois with 5,000 lbs. Order 3: Orange, TX to Michigan with 8,000 lbs. Order 4: Orange, TX to Indiana with 2,000 lbs. LTL Max TL load = 45,000 lbs. Order 1: Wisconsin TL + stop off at Channahon, Illinois LTL Order 2: Illinois Orange, TX Channahon, Illinois Deconsolidation Pool LTL Order 3: Michigan Cost of TL from Orange, TX to Wisconsin (with stop off): $1752.27 Cost of LTL from Channahon, Illinois to Indiana: $130.70 Cost of LTL from Channahon, Illinois to Illinois: $173.93 Cost of LTL from Channahon, Illinois to Michigan: $375.9816 Strictly Confidential
  18. 18. Cost Savings Calculation for Direct, Consolidation and Multi-stop Shipments Cost Savings (at shipment level) are calculated from the difference between the Shipment Cost and the sum of the Best Direct Cost for all the orders under the shipment17 Strictly Confidential
  19. 19. Cost Savings Calculation for Direct, Consolidation and Multi-stop Shipments Cost Savings at the shipment level will be shown on all the shipment screens Where Cost Savings are 0, this means that the shipment planned onto the same rate record as the Best Direct Cost of the order. Shipment is likely a direct shipment with a single order. Where Cost Savings are greater than 0, this means that there were positive cost savings for this shipment18 Strictly Confidential
  20. 20. Land Transport Case Study
  21. 21. Background: Customer and APL Logistics Customer – World Class Global Science and Engineering Products and Services Company – Over US$38 Billion annual sales – Serving Diverse Markets: Agriculture, Nutrition, Construction, Apparel, etc. APL Logistics Transportation Management Operation for Customer – Relationship since1995 – Manages transportation at 99% error-free, savings millions of dollars annually – >190K loads managed annually – Manage and administer client carrier contracts – Services include: • On-site personnel • CSR functions • FTE cost; gain share t i h • Outbound finished product distribution, inbound materials, optimization, returns and fleet management • All modes20 Strictly Confidential
  22. 22. Business Challenge with Older OTM APL Logistics managed Customer’s freight operations using Customer’s OTM v4.0 – Limited freight planning – Lacked newer functionality – Offered limited opportunity for new transportation saving and operational productivity gains – Would soon no longer be supported by Oracle Customer needed to either 1. Invest in an upgrade of OTM and continue to support it as an internal solution 2. Seek alternative options APL Logistics provided the Solution Migrate to APL Logistics’ OTM on current version (V6.2.3), allowing customer to focus on core competencies, not running and maintaining the TMS being used by its Logistics Provider.21 Strictly Confidential
  23. 23. Solution Migrate and Upgrade TMS Solution OTM Supported Services to APL Logistics – Manage and optimize daily order activities across all modes of transportation Improve North America Transport – B i Business i t lli intelligence metrics reporting i ti ti in Planning and Performance real-time mode – Parcel freight management Lower Operating Cost – Carrier compliance, management and Implementation scorecards – Business continuity with existing – Claims management operations – Continuous move planning – Migration of operations to APL Logistics’ g p g – Consolidation and cost allocation across OTM v6.2.3 multiple lines of business – Management of APL Logistics’ OTM – Bulk planning for optimization and pool solution distribution opportunities – Project management & implementation services – Systems integration and testing services – EDI between Customer and APL Logistics – and 200+ customer carriers22 Strictly Confidential
  24. 24. Benefits More automated, less manual Extensive Ops. & Mgmt. Reporting processes – KPI scorecards Accessorials: CS s now have a full ccesso a s CSR’s o a e u g g – POD Mgmt: APL Logistics can now picture of the total costs of shipments provide KPI reporting by mode, carrier, at the Business Unit, segment level Carrier Compliance: Compliance now tracked at the shipment level Validation of carrier indemnification Mass order uploads f from Cost C t savings reporting at Order, i ti tOd spreadsheets Business Segment and Business Unit level Strengthened Business Relationship Through Adding Value Immediate Operational and Productivity Benefit Strategic Strength through System Scalability g g g y y23 Strictly Confidential
  25. 25. ShipmentOptimizer™ Video
  26. 26. OTM: Bringing Value and g gDifferentiation to Supply ChainSegments - International g
  27. 27. OTM as a Service Differentiator Automated Shipment Planning which Respects business rules Dynamically select best route y y Propose equipment mix using innovative planning algorithm Informative planning screens to guide transportation decisions Booking exception Booking authorization Shipment proposal Shipment collaboration and authorization26 Strictly Confidential
  28. 28. Considers Incompatibilities During Bulk Planning Example of business rule : CFS load and Factory load not allowed in same container Launch and Non-launch cannot be in same container Mixed commodities can be co-loaded in same container * Expect system to recommend 4 groups based on incompatibility27 Strictly Confidential
  29. 29. Dynamically Decides Best Route on Various Modes of Transportation Decide on routes on various transport mode based on schedules and cost Sea (Asia-USA / Asia-Europe / Inter-Asia) Air Sea-Air (Origin-Dubai-Destination)28 Strictly Confidential
  30. 30. Optimization Algorithm for Best Container Mix “Schedule-aware” con-ops in conjunction “Traditional” Con-ops with Column Generation algorithm 1. Orders with similar delivery date are grouped 1. Each order will do voyage evaluation to determine potential voyages 2. 2 Each orders’ group will search for best voyage orders VS 2. Orders are sent to column generation algorithms which are based on similar voyage determine best way to group order based on similar voyage, best cost, load maximization, earliest arrival , 3. System may break group if no compatibility voyage can be found for the order group 40FT 40FT 4. System assigns container to order group 20FT 20FT 3. System will compare the results and assign optimal 40FT solution29 Strictly Confidential
  31. 31. Automated Exception Detection System is configured with customer-specific exception rules EBAs EBA Description EBA AIR Ship Mode = “Air” EBA FL Factory is not an Approved Factory load vendor EBA SC Booked Style <> PO Style EBA DSJS For all DSJS and DSJS-CAN ship-to, have to send for EBA EBA EDOD21 Booking EDOD is 21 days earlier that UDD. For C division Booking EDOD is 14 days past that UDD. Non-POE H&C orders beginning with ‘WS’. Reject if EBA WS EDOD is 14 days past UDD Booking exceptions are marked with value “Y” in the respective EBA column on the screen Booking Exception detected No exception30 Strictly Confidential
  32. 32. Recommends Optimal Shipment Proposal Optimization result after automatic bulk planning Recommends best Recommends best Order groupage mode of transport voyage proposal with display of cargo characteristics Maximize equipment Approval Status utilization management g monitoring g31 Strictly Confidential
  33. 33. Shipment Approval Screening Request for Cargo Container PO / CIR Booking Approval Approved Received Stuffing GAC-X GAC-5D IDD ETD-2 ETD System is configured with “Auto Release” rules based on Customer’s business requirement Auto-Release Customer s When system creates a shipment and assigns a container, it will evaluate the approval rules and indicate in approval column either “Auto-Approved” or “Manual Approval Required” Shipments under Auto-Approved does not need to be approved by Customer Shipments under “Manual Approval Required” needs to be sent for approval by Customer Type Of Exception Description Factory Load APL Logistics Load y eLoadability y Minimum Loadability Size CBM Size CBM 20’ 24-28 20’ 24-28 40’ 50-58 40’ 50-58 40H’ 60-68 40H’ 60-68 45’ 70-78 45’ 70-78 53’ ?-100 53’ ?-100 All 20GP need approval All 20GP need approval32 Strictly Confidential
  34. 34. Shipment Collaboration After Reviewing shipment APL Logistics’ operations inputs Shipping Instruction before triggering “Request For Approval”33 Strictly Confidential
  35. 35. Shipment Collaboration – Approval Work Queue Approval workflow Approval actions34 Strictly Confidential
  36. 36. Shipment Collaboration – History of Shipping Instructions and Actions35 Strictly Confidential
  37. 37. International Case Study
  38. 38. Volatile consumer demand and supply shifts, coupled with a huge number of trade lane possibilities make delivering the right product on-time to destinations – an uphill task. ShipmentOptimizerTM was conceptualized to enable organizations to succeed in the midst of rising complexities in shipment planning and global order fulfillment through rail, road, air, and ocean. Natural disaster changed spending pattern Manufacturing Bases Consumer Consumer Social media Markets Markets Consumer increases the pace p a ets Markets of change in Stronger regional lifestyle integration heightens Manufacturing trade flow Bases Consumer Rising income Manufacturing Recession reduces Markets increases demand for Bases spending and choice luxury goods of purchases Manufacturing M f t i Bases Manufacturing Manufacturing Key Consumer Markets Bases Bases Key Manufacturing Bases Raw Materials Flow Finished Product Flow Manufacturing Bases 2010 global trade (TEU): 450 mil. Consumer - Underlying product flow, are The impending World Flood impedes production and supply Markets information, documentation, and Cup and Olympics financial flows. change the market to global market demand of Brazil37 Strictly Confidential
  39. 39. Case Study – Evolution of Value Immediate Value Proposition – Implementation • Process yields better, more efficient network rules – Origin Operations • Planning is truly automated • Decision time reduction from 48 hours to 1.5 hours • Better equipment selection and mix Emerging Value Proposition – Dynamic Networks • Ability to quickly and decisively change product flow across network • Enables a rapid response to market conditions, volatility or opportunities pp – Synchronization with ERP systems • Interesting connection points with order planning, demand planning • “New Era” in Demand Driven Networks38 Strictly Confidential
  40. 40. 39 Strictly Confidential
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