Best Practices & Learning from Implementing OTM in Latin America

download Best Practices & Learning from Implementing OTM in Latin America

of 28

  • date post

    11-Feb-2017
  • Category

    Technology

  • view

    435
  • download

    0

Embed Size (px)

Transcript of Best Practices & Learning from Implementing OTM in Latin America

  • Mahindra Satyam 2012 Mahindra Satyam 2009

    Best Practices & Learning from Implementing

    OTM in LATAM Presented by

    Sudheer Pamighantam On behalf of Amlendu Sekhar and Kamal Gupta

  • 2

    Mahindra Satyam 2012

    Context

    Country Customer / Prospect Nature of Engagement

    Brazil LSP OTM Implementation

    Brazil Retailer OTM Enhancements

    Brazil Online Retailer OTM Support

    Brazil Aircraft Manufacturing GTM Implementation

    Argentina CPG OTM Implementation

    Mexico LSP (NA) OTM Implementation

    Mexico LSP (NA) OTM Enhancements

    Several Several (LSP, Retail, Mfg, Energy) Presales consulting

    This paper is not intended to be comprehensive coverage of all things in LATAM, but to share experience from OTM engagements

    Basis of Experience

  • 3

    Mahindra Satyam 2012

    Contents

    Opportunities in LATAM & Impact on Logistics

    Challenges in LATAM Region

    OTM for LATAM

    Implementation Approach

    Q & A

    1 Section

    2 Section

    3 Section

    4 Section

    Section 5

  • 4

    Mahindra Satyam 2012

    LATAM is Growing Domestic Consumption & International Trade

    Source: The Institute of International Finance, Inc.

    Latin America on a Growth path

    Rapid Recovery from 2009

    downturn

    Continued Capital Inflows

    Strong Domestic Demand

    Continued political stability

    Free trade agreements

    Challenges include tax laws, political and regulatory obstacles and logistics infrastructure

  • 5

    Mahindra Satyam 2012

    Impact of Growth on Logistics Shipper Perspective

    Growth in Manufacturing and Consumer Goods

    Consumer, Food, Beverage and Retail industries

    Manufacturing -Near-shoring at Mexico:

    - Competitive labor rates - Logistics Advantages - Lead time & Risk management

    Petrochemical / Chemical and Cosmetics

    Infrastructure

    Why OTM?

    - Visibility across supply chain and related event management

    - Transportation cost optimization

    - Performance Improvement & monitoring

    - Process Automation

    - Compliance to Government Regulations

    Leading to need for new process / technology

    Re-design process and deploy technology to

    support growth:

    - Products / Channels - Volumes

    Leverage opportunity to integrate LATAM

    with global process and systems

  • 6

    Mahindra Satyam 2012

    Significant Opportunities for LSPs How can OTM Help?

    LATAM Logistics Market Size Market Opportunities

    Logistics market growth

    from 272 B in 2008 to

    333 B by 2013

    3PL Market size: $33 B

    Road segment as% of

    the LATAM logistics

    market: 88.4% (2008)

    In addition to

    International Logistics,

    domestic logistics

    services is growing

    Why OTM?

    Capture opportunities in emerging markets

    Drive growth from new / integrated services

    Create LSP IT Platform to drive this growth

  • 7

    Mahindra Satyam 2012

    Contents

    Opportunities in LATAM & Impact on Logistics

    Challenges in LATAM Region

    OTM for LATAM

    Implementation Approach

    Q & A

    1 Section

    2 Section

    3 Section

    4 Section

    Section 5

  • 8

    Mahindra Satyam 2012

    Challenges in LATAM

    Fiscal & Related Changes Complex Fiscal Rules Constant Changes in

    regulations that need to be met

    Financial processes Local financial processes

    related to logistics transactions

    Meeting Regulatory Requirements

    Operational Differences How logistics business is

    conducted Impact of Fiscal and

    Financial processes

  • 9

    Mahindra Satyam 2012

    Challenges in LATAM

    Key challenges specific to LATAM:

    1) Fiscal &

    Regulatory Requirements

    2) Financial Processes

    3) Operational Differences

    1. Fiscal & Regulatory Requirements (Brazil)

    Municipal B

    Municipal A

    CTe

    NFS

    Municipal A

    Federal Federal Taxes: PIS COFINS

    State State Specific Rules for ICMS

    Municipality (Local City Administration)

    Municipal Specific Rules for ISS

    Mexico: IVA and Retention

  • 10

    Mahindra Satyam 2012

    Brazil Fiscal Sample Scenarios

    1. Normal CT-e can be cancelled, voided and substituted.

    2. Multiple Complementary CTes can be created. Complementary CT-e must refer to a Original CT-e

    3. Every CT-e should have CT-e number /series

    4. User cannot generate a complementary for a complementary CTe

    5. Cancellation of CT-e is allowed only if the shipment is not in transit

    6. CT-e cannot be cancelled if the CT-e is already sent for Authorization and Authorization Response is

    not received back

    7. Complementary CT-e can be generated only when the CT-e of origin is approved by SEFAZ

    8. Cancelled CT-e numbers should not be reused further

    CTe NFS Inter-Municipal scenario Intra-Municipal scenario

    Generated before transportation execution Generated after transportation execution

    Requires govt. sanction Doesnt require govt. sanctions

    ICMS Tax applicable ICMS not applicable

    ISS Tax not applicable ISS Tax applicable

    Each CTE corresponds to unique sell shipment Multiple sell shipments can be grouped in 1 NFS

  • 11

    Mahindra Satyam 2012

    Challenges in LATAM

    2. Financial Processing

    Payment Matching Process based in Fiscal Document (CT-e/CTRC/NFS/NFS-e)

    Events need to be considered in Billing and Payment Process.

    Billing process is based on Financial and Fiscal Documents (CTRC/CT-e/NFS/NFS-e/Pre-Invoice/Invoice)

    Workflow to approval differences (Adjustments) and Payments (release Invoice to ERP)

    Break Billing Invoice based on Customer Rules (Eg : Amount Limit , Quantity CT-e per Invoice, Region, Modal, Type of

    Products, etc) Cost Allocation Rules: Multiple Allocation rules with specific

    sub rules

    Argentina: Carrier updates the taxes applicable based on which tax calculation for Invoicing was done

    Key challenges specific to LATAM:

    1) Fiscal &

    Regulatory Requirements

    2) Financial Processes

    3) Operational Differences

  • 12

    Mahindra Satyam 2012

    Financial Processing Carrier Payment - High Level Flow

    LSP/ Shipper

    C A R R I E R S

    NOTFIS

    PREFAT (Pre-Invoice)

    DOCCOB (Invoice)

    CONEMB (CT-/NFS)

    OCOREN (Events) Multi transaction Payment process

    Transportation

    requires specific documentation, triggered by pre-defined events

  • 13

    Mahindra Satyam 2012

    Financial Processing Customer Billing - High Level Flow

    C U S T O M E R S

    NOTFIS (Order Release)

    PREFAT (Pre-Invoice)

    DOCCOB (Invoice)

    CONEMB (CT-e/NFS)

    OCOREN (Events) Multi transaction Invoicing process

    Transportation

    requires specific documentation, triggered by pre-defined events

    LSP/ Shipper

  • 14

    Mahindra Satyam 2012

    Challenges in LATAM

    3. Operational Difference

    Cte/Sell shipment Grouping Rule

    Integration with Last Mile Routing Application

    OTD/FIDEP Concept

    Dedicated fleet

    RMP

    OCCOREN file upload to send events

    Redelivery/Return shipments

    Proximity scenario

    Refuse scenario

    Beeper Interface Design

    Reserve Dock/Appointment Scheduling by Carriers

    Key challenges specific to LATAM:

    1) Fiscal &

    Regulatory Requirements

    2) Financial Processes

    3) Operational Differences

  • 15

    Mahindra Satyam 2012

    Operational Difference

    CTe /Sell Shipment Grouping

    The grouping of CTes is governed by parameters like Plan from / Plan to location, Customer Name / Division and other Grouping rules Based on the grouping rules associated with CTe, a fixed number of sell shipments are created and a corresponding CTE fee has to added on the buy shipment.

    Integration with Last Mile Routing Application

    For logistics within the Metro, local last mile routing applications are used. Based on the need for stop by stop plan, OTM is integrated.

    OTM sends orders (optional) and receives actual shipment back from Last mile routing application. Then OTM rates, executes, monitors and settles.

    OTD/FIDEP Calculations

    OTD On time Delivery FIDEP - Frequency of Deliveries Informed on time Delivery lead time KPIs are a function of Actual Lead time, Cut-off time for

    the day, Saturday / Sunday working and holidays during transit.

    Dedicated Fleet

    Dedicated fleet: Contract created for each equipment. A budgetary / estimated value is assigned to each shipment on that equipment. Reconciliation: Cost for respective Shipments have to be updated (as accessorial) with additional costs to meet the original CTe amount.

  • 16

    Mahindra Satyam 2012

    Operational Difference

    OCCOREN file upload to send

    events

    In emerging economies, Service Provider may not have capability to automate the events update.

    Carrier sends flat files that system accepts to create the XML and upload into the system.

    Reserve Dock/Appointment

    Scheduling by Carriers

    Requirement was to reserve some dock doors by Carriers for specific shipments. Handled in OTM by constraining app