Oracle Transportation Management OTM Business Plan Greater China.
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Transcript of Oracle Transportation Management OTM Business Plan Greater China.
OracleTransportationManagement
OTM Business Plan
Greater China
Table of Contents
Market Analysis China Logistics IT Spending on China Logistics TMS Market Opportunity Taiwan Logistics Market
OTM Product Product Definition Key Functions/Features Key Strengths / Weaknesses
Customer Analysis Customer Segmentation Business Type Value Propositions Potential Customers
Table of Contents
Competition Direct Competitors
Competition Landscape
Where is OTS?
• Implementation Implementation Strategy
Action Plan
Channel/Partner Development
Sales Forecast
Appendix: LSP List
Market Analysis
China Logistics
Logistics spending represents about 20% of PRC GDP while it is about 10% in US
PRC logistics costY2001 US$ 230 billionY2003 US$ 300 billionY2010 US$ 500 billion (projected)
Third parties logistics market was around RMB 40 billion in 2001 and over 70% of the existing logistics companies had recorded a 30% annual growth in the last 3 years
The China logistics industry is expecting an average annual growth of 25%
* From McKinsey Co & HKGCC
IT Spending on China Logistics
IT spending growth in China logistics sector has been
strong, and is projected to grow almost 22% CAGR
from 2005 to 2009
Growth in 2004 was over 25%
Where hardware spend is takes up the largest share, its
relative growth will be the slowest; conversely, IT
services, a small share, will growth the fastest
By 2009, software spend will be half of hardware spend
* From CCID Advisory
TMS Market Opportunity
Global: TMS market from US$860 million in 2002 to US$1.6 billion in 2007
China: Assume 10% of the global market, based on its percentage of total
logistics market
US$120 million in 2005 to US$160 million in 2007
Taiwan Logistics Market
From US$37.1 billion in 2000 to US$61.6 billion in 2011
Advantage in air/sea transportation due to superior location
High-tech industries have well adopted global supply chain
management initiatives
OTM Product
High PerformanceTransportationOptimization
Global TransportationCollaborationand Execution
Logistics Automationwith ExceptionManagement
Complete LogisticsNetwork Visibility*
Global, Local, andCentral Logistics
Management
*Currently re-implementing analytic capabilities using Oracle technology
Product Definition
Procurement Collaboration & Optimization
Performance & Financial Analysis*
Logistics Order Management
Shipment Planning & Optimization
Service Provider & Asset Management
Shipment Execution
Freight Payment, Billing, Claims
Global Logistics Visibility
Supply Chain Event Management
Operational Reporting & Document Generation
Forwarding & Brokerage Operations
*Currently re-implementing analytic capabilities using Oracle technology
Key Functions / Features
Key Strengths & Weaknesses
Strength Manage international and domestic shipment legs in a
single integrated solution
Competitors: Most 3PL/TMS systems are focusing either on
international or domestics leg.
History Background: International and domestics logistics departments
are two different teams in most companies.
Market Trend: Companies are combining international and logistics
departments and looking for integrated solution.
Key Strengths & Weaknesses Strength
Optimization / decision-making support based on a complex combination of factors for each shipment
Competitors: Most 3PL/TMS systems are competitive at order management and track & trace capability. But only a few can really do the optimization, especially under the context of from point of receipt right up to domestic DCs or even point of sales.
History Background: Track & trace has been regarded by customer as higher priority than optimization. Track & trace gives customer the control of running it business. It is the solid ground for building optimization.
Market Trend: After track & trace, customers are demanding more of the optimization capabilities to further save logistics cost.
Key Strengths & Weaknesses Strength
Business Process Management Engine and Auto Re-planning capability while freight is in motion
Competitors: Most 3PL/TMS systems claim to have milestone, event and exception management. However, more than often it stops at the level of providing alerts to the stakeholders and leaves the re-planning work to be conducted manually.
History Background: A highly configurable central business process management engine is a quite advanced concept.
Market Trend: With the new technology of SOA, BPEL, and webservices, etc., having a flexible business process engine that could change the internal process and trigger the action externally would be highly desired and achievable.
Key Strengths & Weaknesses Strength
Total Logistics Cost Reporting down to item level
Competitors: A lot of 3PL/TMS systems have built the landed cost or logistics cost reporting module. However, without handling international and domestics leg by one system, the cost calculated will always be only a portion of the total logistics cost.
History Background: The information of total logistics cost down to SKU is very critical to the buyers. It could fundamentally change the sourcing decisions.
Market Trend: Cost control & saving has been the number 1 objective of logistics.
Key Strengths & Weaknesses
Weakness
Looks complicated to use (quote from the market)
Pricy for the middle market (quote from the market)
Lack of documentation functions, which is one of keys
for the international logistics and distribution business
FCR / HBL
Proof of Delivery
Export/import documents collection
Customer Analysis
Customer Segmentation
1. LSP (main target)4 type of players in China logistics market
Large sized state-owned enterprises (SOE)Local private companiesLogistics arm of international ocean carriersInternational professional logistics companies
Nearly 730,000 logistics-related organizations>30,000 3PL companies
Customer Segmentation
2. China Importers and ExportersChina importers
Source large quantities of goods (e.g. raw materials) from different countries into ChinaFOB basedIndustry
Retail / Chemical / Commodity / Automotive
China exportersSell large quantities of goods to different countriesCIF based (not the mainstream in China)Industry
FMCG / Apparel / Electronics
International Trading / Sourcing Agents
Customer Segmentation
3. Large Enterprises Doing Business Nationwide
IndustryAll Industries Except
Dangerous GoodsReefer Cargo
Ideal ProfileHave a large number of manufacturing plants or retail shops across the nationComplex process involving DCsCentralized transportation planning department
Business Type
InternationalFully integrated international supply chain management- Sourcing into China, not fromExport / Import forwarding
- freight forwarder/NVOCCParcel
DomesticNational transportation management / multi-mode- Truck, rail, barge, air, etc.Local distribution (integrated with WMS)
Value Proposition for LSP
Provides competitive edge in the logistics marketIT is the key for logistics business
Quicker implementation than inhouse developmentSoftware development cycle time normally take yearsOptimization algorithm is difficult to define
Lower cost than inhouse developmentOutsource to the professionalDevelopment cost is usually much higher
One platform for both international and domestic business
Value Proposition for Importers/Exporters & Domestic Shippers
Gain the tremendous control of supply chain
Significant logistics cost saving through control and optimization
Rigid freight and total logistics cost management
Quicker implementation than inhouse development
Lower costs than inhouse development
One platform for both international and domestic business
Potential LSP Customers in China
Potential LSP Customers in China
International 3PL Players in China
Potential Import/Export Customers in China
Potential LSP Customers in Taiwan
Global Optimal Inc
Local 3PL Players
Potential Import/Export Customers in Taiwan
Potential LSP Customers in HKG
Local 3PL Players
Competition
Direct Competitors
TMS Category I2
Manugistics
3PL Category Log-Net
GT-Nexus
Velocity
Competition Landscape
Whole Business Application Suite Vs. Niche Players
Oracle, SAP
I2, Manugistics
High-end Vs. Middle Market Vs. Low End
International Software Vendors Vs. Local Vendors
Software License Model Vs. ASP (On-Demand) Model
Where is OTS?
Price
High
Low
FunctionalitiesNiche Broad
Target
Customer
International
Local
Implementation
Implementation Strategy
Position as a high-end product
Tied offering Track and trace as basic offering Optimization as premium offering
Lock anchor customer Be able to use as reference Customer testimony More resources to make sure the successful roll-out
Pricing flexibility Partnership deal for the anchor customers Volume discount Bundling with other Oracle products Pay when you go, on-demand option for middle market?
Implementation Strategy
Marketing campaign Publish white paper in industry magazines
Attend trade shows
Deliver key note speech at industry seminars/conferences
Advertise
Cross sale/ up sale Opportunities Current Oracle install base
Joint sales force
Local sales team together with product expert
Action PlanStep 1: Define Sales Organization, Structure & Responsibility
Regional Sales / Pre-Sales / Product Team Dedicated OTM Sales and Cross-Sale/Up Sale Project Team Structure Role & Responsibility Communication Protocol
Step 2: Arrange Sales Training Product Training with Business Cases Value Proposition Target Customer Edge Over the Competitors Pricing
Action PlanStep 3: Get Chinese/English Sales Kit Ready
Sales Letter Not Ready
Brochure Not Ready
Data Sheet Ready
Case Study / Success Story International Case Only
Tips for Sales Not Ready
Customer FAQ Not Ready
Pre-Sale Checklist Not Ready
Presentation Need to be Refined
Demo for different customer Need to be Refined, Chinese
segments & business scenarios Environment not ready
Action PlanStep 4: Sales Campaign by Sales and Pre-Sales
Identify potential customer list LSP List (See Appendix 1)
China Importer & Exporter List
Large Enterprise List
Meet with sales team to discuss how to approach
those customers and generate more leads
Cold call and visit some prospects
Attend industry conferences
Step 5: Setup Customer Help Desk
Channel/Partner Development
Channels / Partners Oracle Regional Sales Force
Consulting Firms
IBM, HP
Bearing Point
Big Four
Local consulting firms
Other Software Vendors
Knowledge Buildup Product Training
Sales Kit
Demo Environment Setup
Sales Forecast
License: US$300K-500K
Number of Customer Targets for FY2006
Mainland China: 2
Hong Kong: 1
Taiwan: 1
Total Revenue Target: US$1 - 2 million
Appendix: LSP List Global Players
Air China - China Eastern - China Southern Airlines - Dragonair (Hong Kong) -
China Airlines - Cathay Pacific - COSCO Group - China Shipping - Evergreen
(Taiwan) - OOCL (Hong Kong) - APL - Maersk - P & O Nedlloyd - Hutchison
Whampoa - PSA - P & O Ports - APM Terminals - Annto Logistics - China Resources
Enterprise - Haier Logistics - Changˇan Minsheng Logistics - Anji Automotive
Logistics - Sinotrans - China Shipping Logistics (Zhonghai Logistics) - PG Logistics -
Cosco Logistics - Shenzhen Gongsuda Logistics - Jiuchuan Logistics - China Post
Logistics - EAS International - Da Tian W Group (DTW) - China Merchants
Logistics/ST Anda - Nippon Express - Kintetsu World Express - Semblog - TNT
Logistics (Anji-TNT) - DHL (Danzas) - Kuehne & Nagel (K&N) - Exel Expeditors -
Bax Global - Gefco - NYK Logistics - APL Logistics - GeoLogistics - Panalpina -
Schenker - Tibbett & Britten - Maersk Logistics - BLG - BALtrans - Fedex - TNT
Express - UPS - DHL - Express Mail Service (China Post) - China Air Express - EAS
- COSCO - DTW
Appendix: LSP List China Players
中国远洋物流有限公司 北京 中邮物流有限责任公司 北京 中远国际货运有限公司 北京 招商局物流集团有限公司 深圳 锦程国际物流集团股份有限公司 大连 天津大田集团有限公司 天津 广东邮政物流配送服务有限公司 广州 中国物资储运总公司 北京 中铁集装箱运输有限责任公司 北京 山东海丰国际航运集团有限公司 青岛 中铁行包快递有限责任公司 北京 黑龙江省华宇物流集团有限公司 佳木斯 青岛海尔物流有限公司 青岛 中铁现代物流科技股份有限公司 北京 中铁快运股份有限公司 北京 中海集团物流有限公司 上海 南方物流企业集团有限公司 广州 宝供物流企业集团有限公司 广州