supply chain planning- logistics_building world-class transportation_143

8/7/2019 supply chain planning- logistics_building world-class transportation_143

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Building a World-Class Transportation LogisticsNetwork

Sunil Wahi,

Senior Solutions Manager, Supply Chain

Oracle Asia Pacific Product Solutions

Harry Cao,

Solution Architect, Supply Chain

Oracle Application Global Sales Support


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The following 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 berelied upon in making purchasing decisions.

The development, release, and timing of any

features or functionality described for Oracles

products remains at the sole discretion of Oracle.


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Agenda

Key Challenges faced within a Global Logistics Network

Characteristics of a World-Class Logistics Network

What are the Leaders doing?

How can Oracle Help

Oracle Supply Chain Logistics Solutions

Oracle Strategic Network Optimization (SNO)

Oracle Transportation Management (OTM)

Customer Case Study Case New Holland

Value Proposition - Conclusions


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Globalization is happening..


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And a Global Transportation LogisticsNetwork is the Mandate..

Warehousing& Storage

Carriers

Customers

Shippers

Consolidators

Cargo HandlersLogistics ServiceProviders

Freight Forwarders


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Source: Research Article on Supplychaindigest.com

Survey of Western Companies importinggoods from China


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Key Challenges faced within a GlobalLogistics Network

Lengthening of the Supply Chain

Difficulty & Cost Inefficiencies in Transportation Execution

Lost Sales/Mismatch in Supply & Demand

Import/Export Compliance Procedures Disconnect between International and Domestic

Transportation

Lack of Strong Technology support

Lack of Experience and Skill Sets


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Characteristics of a World-ClassTransportation Logistics Network

Optimal Design of Global Supply Chain Integrated Planning and Execution Processes

Integrated International and Domestic Logistics

Global Logistics Visibility

Dynamic Logistics Routes

Logistics Process Automation

Collaboration with Supply Chain Partners

Compliance to Changing Regulations

Making the Financial-Supply Chain Connection


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What are the Leaders doing?

Laggards are taking the full

brunt of rate increases andcapacity/performanceshortfalls

Leaders are taking action toavoid these problems by:

Trying to Improve overall serviceand financial performance

Investing in the right place

Focusing on Value

Thinking End to End

Leverage Technology (Network

Design, Logistics, Visibility,Analytical Solutions, etc..)

Tapping local Talent

Manage Risk

RevenueRevenue

CostsCosts

Work ingCapi ta l

Work ingCapi ta l

Fixed

Capi ta l

Fixed

Capi ta l

Shareholder Value

Shareholder Value

Profitabil i tyProfitabil i ty

InvestedCapi ta l

InvestedCapi ta l

Laggards SiloView

Leader sHolistic

Approach

Lower raw mater ials and f in ished goodsinventory without sacri f ic ing customersatisfaction or raising logistics costs

Shor ter order-to-$$$ cyc les

Greater custo mer satisfaction (i .e . ,higher market share, greater grossmargins )

mo re com peti t ive del ivery avai labi l i ty

Lower cost of goods sold- lowfreight rates at each bus iness unit

Few er physical assets ( i .e . , trucks,trai lers, and mu ch higher asset

utilization

In other wordsLeaders act as

internal XPLs or even as profit

centersand every transport move

has a buy-side and a sell-side


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Introduction to Oracle Supply ChainLogistics Solutions

Domestic

International

Strategic(3-18 months)

Tactical(1-3 months)

CarrierSelection,Contracts

&Rates

Operational / Transactional(NOW 60 days)

SupplyNetworkDesign

InventoryOptimization

LoadPlanning &

Optimization

LoadTendering

Freight Forwarders

Visibility of Events and Charges

Key Performance Indicator Trends & Action Plans

Freight Bill

Settlement &Payment

CarrierPerformanceMonitoring

Freight Claims

Handling

Private FleetOperations

Global Trade Planning,Customs Compliance& Charges

Execution

Oracle Transportation Management (OTM)Oracle Strategic NetworkOptimization (SNO)

Oracle InventoryOptimization (IO)


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Leverage resiliency in your supply chain for tactical responses

Oracle Strategic Network OptimizationDesign Resilient Supply Networks

Network modeling and alternates

Sourcing strategy

Cost modeling

Asset rationalization

Safety stock strategy

What-if simulations

Risk related to unplanned events

Design supply chains that are resilient

Strategic Network Optimization (SNO) Network modeling and alternates

What-if simulations

Cost modeling Asset rationalization

Risk related to

unplanned events

Inventory Optimization (IO)

Model distribution of variability(demand, supply, lead time)

Budget and capacity constraints

Time-phased min,

max, and target

service levels

Inventory policies

Target inventory levels

Identification of point of postponement

Network structure

Sourcing rules

Suppliers and CMs

Mfg and Dis facilities

Shipment methods


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Pillsbury Foods Project to rationalize distribution centers during

merger of Pet Foods and Pillsbury Foods

Reduced warehouses from 23 to 9

Held service levels constant despite reduction infacilities

Significantly reduced transportation costs

Alcoa Primary Metals Profit optimized mix of products to produce on

bottleneck equipment

Significant reductions in transportation costs

Improved management of risks due tocommodity market price fluctuations

Increased profitability of products produced insmelters

Agilent Technologies Deployed for one product family (700 products, 5000 items)

since May 2006

Multi-echelon supply chain network (14 levels deep)

Improved forward visibility and understanding of impact ofinventory on service level

Part of S&OP process: quantitative understanding of

inventory investment to achieve sales upside

20-30% improvement in service level for the sameinventory investment

Panduit Plans inventory at warehouses to meet service level

commitments to customers (48 hour fulfillment lead time)

Multi-echelon inventory planning reduces overall inventory

investment, improved visibility of buffer inventory in thesupply chain

Anticipates further reduction in inventory when includingmanufacturing facilities to leverage opportunities topostpone inventory holding to shared raw materials andsub-assemblies

Live on Strategic Network Optimization, Inventory Opt.

Few SNO Customers

I t d ti t O l S l Ch i


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Introduction to Oracle Supply ChainLogistics Solutions

Domestic

International

Strategic(3-18 months)

Tactical(1-3 months)

CarrierSelection,Contracts

&Rates

Operational / Transactional(NOW 60 days)

SupplyNetworkDesign

InventoryOptimization

LoadPlanning &

Optimization

LoadTendering

Freight Forwarders

Visibility of Events and Charges

Key Performance Indicator Trends & Action Plans

Freight Bill

Settlement &Payment

CarrierPerformanceMonitoring

Freight Claims

Handling

Private FleetOperations

Global Trade Planning,Customs Compliance& Charges

Execution

Oracle Transportation Management (OTM)Oracle Strategic NetworkOptimization (SNO)

Oracle InventoryOptimization (IO)

O l T i M


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Oracle Transportation ManagementManage All Your Transportation Needs in One System

TransportationOrder Capture

Global Visibility

Supply Chain Event Management

Business Intelligence (Analytics & Reporting)

Freight Forwarding and Brokerage

TransportationPlanning

TransportationExecution

Ca

rrierandAs

set

Managem

ent

C

ooper a

tiveR

outePlannin

g

Transportatio n

Sour c

ing

FreightPayment,

Billing andClaims


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Execute Locally Using multiple languages and currencies-

English, Spanish, German, French, Chinese (simplified)- Support for all currencies, including in-system conversions

- Screen customization by region / country, user groups

Accommodate region-specific rules and regulations

Control Globally All inbound POs and outbound customer deliveries

Transfers between facilities, in different countries

- Distribution centers mfg - Intermediary nodes

Visibility into in-transit & at-rest inventory throughout network

Manage Centrally All operational information in one location- Increase leverage for procurement- Apply best practices across regions

- Evaluate processes holistically

- Perform network analysis

Cleanse data to achieve single source of true rates and routes

Single IT infrastructure to reduce support and maintenance costs

Oracle Transportation ManagementManage All Your Transportation Needs in One System


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A Few Customers...

LogisticsService

Providers

Manufacturing

Retail


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World leader in agricultural and construction equipment businesses

2006 annual revenue of $13 billion, with 30 manufacturing plants and25,335 employees globally

Sales in 160 countries through more than 11,500 dealers and

distributors

Ships over 300,000 pieces of outbound whole goods and 1 million

inbound shipments to support the global manufacturing

Case New Holland- Case Study


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Case New Holland- CNH is Global

BrazilBelo Horizonte

Crawler excavators,

tractor loader backhoes,

crawler dozers, wheel

loaders, graders

Curitiba

Tractors, combines

Piracicaba

Sugar cane harvesters,

coffee harvesters,

planters

CanadaSaskatoon, SK

Planting, seeding

equipment

Mexico* Queretaro

Tractors, components

* Guanajuato

Tractors

United States

Belleville, PAHay, forage equipment

Benson, MN

Sprayers, floaters,

cotton pickers

Burlington, IA

Tractor loader backhoes,

forklifts

Calhoun, GA

Crawler excavators,

dozers

Dublin, GA

Compact tractors

Fargo, ND

Tractors, wheel loaders

Goodfield, IL

Soil management

(tillage) equipment

Grand Island, NE

Combines

New Holland, PA

Hay and forage

equipment

Racine, WITractors, components

* Rocky Mount, NC

Engines

Wichita, KS

Skid-steer loaders

Manufacturing Locations

* Unconsolidated Joint Venture

C N H ll d


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Case New Holland- CNH is Global

AustriaSt. ValentinTractors

BelgiumAntwerp

Components

Zedelgem

Combines, forage

harvesters, largerectangular balers

ChinaHarbin

Tractors

Shanghai

Tractors

FranceCoex

Grape harvesters

CroixComponents

Tracy-Le-Mont

Components

GermanyBerlin

Wheeled

excavators,

wheel loaders,graders

IndiaNew Delhi

Tractors

* Pithampur

Tractor loader

backhoes

ItalyImola

Tractor loader

backhoes, mini-

excavators

Jesi

Tractors

San Mauro

Crawler excavators,

wheeled excavators

Pakistan* Dera Ghazi Khan

Tractors

PolandPlock

Combines, balers

Turkey* Ankara

Tractors

United Kingdom**Basildon

Tractors, engines

UzbekistanTashkent

Tractors, cotton pickers

Lecce

Midi wheeled

excavators,

telehandlers,dozers, wheel

loaders

Modena

Components

Manufacturing Locations

** It includes both CNH and Unconsolidated Joint Venture Plants

* Unconsolidated Joint Venture


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Background - US was outsourced to 3PL, Europe was running in-houseon legacy systems, little control over inbound transportation

Objective - Wanted to reduce freight costs and increase visibility by

streamlining and controlling logistics operations inhouse

Technology- Selected Oracle Transportation Management for global

transportation platform

Results - Went live in US in Nov 06 and Europe in Jan 07six months

after vendor selection complete

Case New Holland- Project Overview

C N H ll d


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Case New Holland- Vendor Selection Process

Dec 2005Nov 2005

Recommendation

Began with a

list of 42possible TMS

Vendors

Lean Logistics

Manhattan Assoc.

Manugistics

Meridian IQ

Nistevo Corp

QLogitek

Red PrairieSAP

Transplace

CTSI

Oracle/G-Log

Logility*

Descartes*

Oracle/G-Log

Manhattan

SAP

Red Prairie

CTSI

Oracle/G-Log

Manhattan

SAP **Oracle/G-Log

Recipients of

CNH TMS RFI

Semi-finalists chosen

after demos

Chosen to

demonstrate theirproduct to CNH

Jan 2006 Jan 2006 Feb 2006

* Logility and Descartes chose not to

respond

** SAP has chosen not to

participate in the post

demo activities

C


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Global development/implementation

Oracle OTM system was designed as a global system, not a domestic system

adapted for global use

Rated at or near the top in all of the CNH RFI and Demo scoring

categories

Strong client site references in North America

Integration experience with SAP

Oracles On-demand option allowed for quick installation

Innovation leadership to drive continued transformation

Case New Holland- Why OTM?

C N H ll d


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Ph

ases

Case New Holland- Implementation Phases

North American Logistics European Logistics

NA Phase II NA Inbound from NA SuppliersMaterial - NA Suppliers to NA PlantsMaterial - NA Suppliers to Non-NA Plants (Port)Material - NA Supplier to NA SupplierService Parts - NA Suppliers to NA Depots

NA Phase IV - Outbound Service PartsNA Depot to NA DealerNA Depot to Non-NA DealerNon-NA Depot (Port) to NA DepotNA Suppliers to Non-NA DealerNon-NA Suppliers (Port) to NA DepotNA Depot to NA Depot

NA Phase I NA Plant Outbound and Direct ShipWholegoods - NA Plant to NA DealerWholegoods - NA Plant to Non-NA Dealer (Port)Wholegoods - NA Supplier to NA DealerService Parts - NA Suppliers to NA Dealer

EU Phase I - Inbound MaterialEU Suppliers to EU PlantsEU Suppliers to Non-EU PlantsNon-EU Suppliers (Port) to EU PlantsEU Plant to EU PlantEU Supplier to EU Supplier

EU Phase II - Inbound Service PartsEU Suppliers to EU DepotsNon-EU Suppliers (Port) to EU DepotsEU Depot to EU DepotNon-EU Depot (Port) to EU DepotEU Dealer to EU DepotDealer to EU Suppliers

EU Phase IV - Outbound WholegoodsDealer to DealerEU Plant to EU DealerNon-EU Plant (Port) to EU DealerEU Plant to Non-EU Dealer

EU Phase III - Outbound Service PartsEU Depot to EU DealerEU Depot to Non-EU DealerNon-EU Depot (Port) to EU DealerEU Suppliers to EU DealerEU Suppliers to Non-EU Dealer (Port)Non-EU Suppliers (Port) to EU Dealer

NA Phase III NA Import, NA Intracompany, NA ReturnsWholegoods - NA Dealer to NA DealerWholegoods - Non-NA Plant (Port) to NA DealerMaterial - Non-NA Suppliers (Port) to NA PlantsMaterial - NA Plant to NA PlantService Parts - Non-NA Suppliers (Port) to NA DepotsService Parts - NA Depot to NA DepotService Parts - Non-NA Depot (Port) to NA DepotService Parts - NA Dealer to NA DepotService Parts - NA Dealer to NA Suppliers

C N H ll d


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Oracles

OTM

*One Global Domain

CNHWholegoods

Plants

Carriers

Request for Pick-up

Planned Shipment

w/ OTM Shipment Id

Tender Responsevia EDI, Portal or email

Invoice

w/ OTM Shipment Id

PlannedShipment

w/ OTM ShipmentID

Master Data Interfaces

Item Master

Location Master

Freight PaymentPayment made when Invoice matches Planned

Shipment, unless Routing Guide Shipment

RIQ(Sell Rates)

Case New Holland- Outbound Integration

C N H ll d


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CNH Supplier

LeveragedCNH Supplier Portal

Carriers

Request for Pick-up

Planned Shipment

w/ OTM Shipment Id

Invoicew/ OTM Shipment Id

PlannedShipment (NA)

or ActualShipment (EU)

w/ OTM Shipment Id

Oracles

OTM

One Global Domain

Routing Guide(NA Only)

CNH Receiving

ActualShipment(EU only)

w/ OTMShipment Id

Tender Offervia EDI, Portal or email

Tender Responsevia EDI, Portal or email

Freight PaymentPayment made when Invoice matches Planned

Shipment, unless Routing Guide Shipment

Master Data Interface

Location Master

Case New Holland- Inbound Integration

C N H ll d


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Case New Holland- Project Results and Benefits

Reduced Freight Costs

Inbound and outbound transaction costs Lower headcount

Lower cost carrier selection

Payment based on actual shipped weight

Increased Visibility Supplier communications (know when something is shipped)

Shipment data (weight, supplier, carrier selection)

Freight rates, freight payment and damage claims

Dealer destination charges

Increased Control Carrier KPIs: Service level, cost, quality

Supplier compliance to core carriers

TMS B i B fit


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TMS Business Benefits

What business benefits have you achieved through the

use of Transportation Management Software?% of Responses

83%

76%

66%

63%

56%

53%

50%

50%

49%

16%

Streamlined

operations/productivity

Reduce transportation and

shipping-related costs

Improved customer satisfaction

Improved ease of use

Improve visibility into logistics-

related activities

Improved use of / relationship

with carrier

Reduction in headcount

Improved collaboration withexternal business partners

Created competitive advantage

Lowered supply chain

inventories

Source: AMR, 2006

The emphasis is less onjustifying an investmentbased on Return onInvestment (ROI) and moreabout fixing a very obviousproblemLogisticsprocesses both efficientand inefficient impactrevenues, bottom lineprofits, the balance sheet,production schedules,human resourceproductivity, and thetechnology that drives non-logistics parts of theorganization.

V l P iti


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Value Proposition

Optimal Design of Global Supply Chain - Design Resilient Supply

Networks

Integrated Planning and Execution Processes -Robust multimode/Multi leg transportation planning; advanced inventory

management

Global Logistics Visibility -Single global view of all logistics

information; seamless ERP, SCM, and device integration

Increase Logistics Operations Efficiency -Automated warehouse

operations, RFID support, synchronized shipping and transportation

Collaborate with Supply Chain Partners -Seamless execution

flows, Carrier Sourcing, Automated settlements, transaction-centric

collaboration

Drive Continuous Improvement and Best Practices -Closed-loop

Business Intelligence, Advanced analytics and reporting, integrated

event management


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St t i t Ad t TMS S l ti


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Strategies to Adopt a TMS Solution

Purchased TMS Software: Purchase, Implement and Configure a TMS Software as per your business needs

Centralize/Decentralize based on Corporate Mandate

Software, Services, Hardware, Support Costs involved

Streamline Implementation Timeframes

Outsource to a 3PL/4PL: Outsource Transportation Function to a company focusing on this market as their core

business. And focus on your own Core Competency

Less Control over Decision Making

Major Concerns: Transition process, depth of 3PLs management team, security andsafety issues, trust and costs

Can also be a hybrid where logistics control is retained while a transportation function likeassets and operations are outsourced

Software as a Service (SaaS): Leverage Application Providers capability in hosting the Solution for you

Make your own Transportation decisions

Need not maintain Hardware, Software and Upgrades

Service Contract/Subscription based Model

Documents

supply chain planning- logistics_building world-class transportation_143