Otm 2013 c13_e-22a-lim-joshua-otm-as-a-service-differentiator

OTM as a Service Differentiator

OTM SIG Conference, Amsterdam 29th Jan 2013

Agenda

About APL Logistics

Sourcing a Solutiong

Bringing Value & Differentiation to Supply Chain Segments – Land Transport

Land Transport Case Study

ShipmentOptimizer™ VideoShipmentOptimizer Video

Bringing Value & Differentiation to Supply Chain Segments – International

International Shipment Case Study

Strictly Confidential1

APL Logistics - part of a global and integrated supply chain provider

Terminal Operations Container Shipping Supply Chain Management

Top 10 global terminal operator10 terminals in the U.S. and Asia.Revenue: US$503M

World’s 7th largest container shipping line

153 vessels ship to 25,000 locations in 140 countriesR US$7 9B

Top 25 Global 3PL15.8 million sq. ft. of warehouse; operates in 260 locations across 56 countriesR US$1 4BRevenue: US$7.9B Revenue: US$1.4B


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 Terminals Deconsol WarehouseLandContainer Shipping

As supply chains become more complex our “total value chain“ proposition offers strong

Warehouse Land Consol Terminals Terminals Deconsol WarehouseLandContainer Shipping

Visibility

As supply chains become more complex, our total value chain proposition offers strong advantages for customers.


Broad Product Suite and Strong Customer BaseAPL 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 service15.8m sq. ft. of warehouse space worldwide

Freight delivery service with multimodal transportation

Supply chain management solutions that reduce cycle time and inventory levels

Guaranteed, door delivery of LCL freight from key markets in Asia to North America

Manufacturing supportO ti d li d hi h lit

Consolidation and vendor services

APL Guaranteed™ Continental FCL service

Asset managementA l t f tOn-time delivery and high quality

service with various process management solutions

servicesConsolidation of merchandise, information and documents with 200 facilities worldwide

FCL serviceGuaranteed, door delivery of FCL freight from key markets in Asia to North America

A complete range of asset management solutions to facilitate the global flow of goods

REPRESENTATIVE CUSTOMER SEGMENTS

RetailHi-techAutomotive Consumer Goods IndustrialChemical Fashion


Sourcing a Solution

Sourcing a Solution: Identifying Manual Work

APL Logistics Operations Customer Logistics Planner

1 R i b ki 8 R i l t1. Receive bookings2. Refer to customer’s logistics

procedure3. Validate booking4 Manually plan route

8. Receive approval request emails from multiple origins (e.g. SHA, JKT, SIN, HKG)

9. Check if voyage meet delivery dates

7. Approval email to customer

4. Manually plan route5. Manually group bookings6. Enter plan information in email

10. Any exceptions (e.g. urgent shipments, change mode)

11. Enter shipping instructions via email

12. Approval email to APL Logistics

Manual work via email, phone to collaborate bookings and shipments between LSP and customers Difficult to track communication and instructionsAPL Logistics’ customers are leaning their workforce in logistics department (same amount of work, less people)


less people)

Sourcing a Solution: Business Complexity

Planning is complicated!

Too many business rules in a fast moving operating environment. Violations of business rules bring oo a y bus ess u es a as o g ope a g e o e o a o s o bus ess u es b gcustomer dissatisfaction and may result in shipment delays or incur extra freight cost

Destination Delivery windowCo-loading

Multiple store in 1Destination Delivery windowLaunch Commodity Multiple store in 1

container

JacksonvilleMax 5 days before delivery date Launch cannot be

All able to co-load Allowed

Pitt b h Footwear cannot be N t ll dLaunch cannot be mixed with non-launchPittsburgh Footwear cannot be

co-loaded with Garment Not allowed

San Antonio Max 10 days before delivery date

Garment cannot be co-loaded with Equipment Not allowed

Sacramento Max 3 days before Ok to mix All able to co-load Allowed


Sacramento delivery date Ok to mix All able to co load Allowed

Product Selection Needs

Need for an “off the shelf” product– Flexible– Highly configurableHighly 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 processshipment planning process– Co-loading and incompatibilities– Routing guide

Pl i l ith– Planning algorithm

Audit trail capabilities

Repeatable deployment

Strictly Confidential

Repeatable deployment

8

Why Oracle OTMOTM offers many out of the box configurations, workflow and algorithms which allow modeling of complex business rules

Configure Business Rules in OTM

Equipment

Containers and specificationsLoadability approval rules per customerEquipment allocations Business Rules

Bulk planSelection criteriaWorkflow

Shipper locations ScreensetShipper locationsConsolidation Freight Station (CFS)Ocean portsDeconsolidation facilityContainer yardCustomer DC / Store location

ScreensetMenuActionsVPDBusiness monitorSaved query

LocationsCustomer DC / Store locationRegions User Interface

Saved queryTraffic light indicator

Itineraries (Ocean, Land, Air)ArbitraryTransit-timeV h d l

Optimization algorithm

RoutesVoyage schedulesShipments

Rate serviceRate offerRate record

Order baseOrder releaseBuy / Sell shipments


Rates Arbitrary rates Operational Reportsy

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

Shipment Manager in Asia and Europe

Domestic Land Transport Optimization for a large Chemical company in North America

Domestic Land Transport Optimization in Europe for a Key Retailer

2009 2010 2011 2012

APL Logistics purchases Oracle OTM

International ShipmentOptimizer for a Leader in Sports and Apparel in

p

Domestic Land Transport Optimization in China for a


Oracle OTM software

a Leader in Sports and Apparel in Asia, North America and Canada

Optimization in China for a Key Retailer

OTM: Bringing Value & g gDifferentiation to Supply Chain Segments – Land Transportg p

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– Mass Order Upload – via Excel spreadsheets• Post-operations upload of orders for recording purposes

– Mass Order Entry – via UIy• Part of Mass Order Upload• Manual entry and correction of orders

C t N O d U i d t l t– Create New Order – Using order templates• Capture of inbound orders over the phone


Land Transport: Flexibility in Order Creation

Order Entry via Templates


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 30297-162 55437756 SAPWP1 00001DNH1_SHIPPOINT_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 shipment



Planning Multi-stop Shipments

Select orders for multi-stop planning and click on Actions > Bulk Plan

70807_55364261_SAPWP1_00

DNH1_SHIPPOINT_00001 30297-162_55437756_SAPWP1_00001

DNH1_SHIPPOINT_00001

Select orders for multi stop planning and click on Actions > Bulk Plan



Planning Multi-stop Shipments

OrdersOrder 1: Orange, TX to Wisconsin with 30,000 lbs. Order 4: IndianaOrder 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.Max TL load = 45,000 lbs.

Order 1: Wisconsin

LTL

Orange, TXOrder 2: Illinois

TL + stop off at Channahon, Illinois

Channahon, Illinois

LTL

Orange, TX

Order 3: Michigan

Channahon, IllinoisDeconsolidation Pool

LTL

Cost of TL from Orange, TX to Wisconsin (with stop off): $1752.27Cost of LTL from Channahon, Illinois to Indiana: $130.70Cost of LTL from Channahon, Illinois to Illinois: $173.93Cost of LTL from Channahon, Illinois to Michigan: $375.98


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 shipment


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 shipment


Land Transport Case Study

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 since1995Relationship since1995– Manages transportation at 99% error-free, savings millions of dollars annually– >190K loads managed annually– Manage and administer client carrier contractsManage and administer client carrier contracts– Services include:

• On-site personnel• CSR functions

FTE t i h• FTE cost; gain share• Outbound finished product distribution, inbound materials, optimization, returns and fleet

management• All modes


Business Challenge with Older OTM

APL Logistics managed Customer’s freight operations using Customer’s OTM v4.0– Limited freight planningLimited freight planning– Lacked newer functionality – Offered limited opportunity for new transportation saving and operational

productivity gainsproductivity gains– Would soon no longer be supported by Oracle

Customer needed to either1. Invest in an upgrade of OTM and continue to support it as an internal

solution2. Seek alternative options

APL Logistics provided the SolutionMigrate 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

Solution

Migrate and Upgrade TMS Solution to APL Logistics

Improve North America Transport

OTM Supported Services– Manage and optimize daily order activities

across all modes of transportationB i i t lli t i ti iImprove North America Transport

Planning and Performance

Lower Operating Cost

– Business intelligence metrics reporting in real-time mode

– Parcel freight management– Carrier compliance, management and

Implementation– Business continuity with existing

operations– Migration of operations to APL Logistics’

scorecards– Claims management– Continuous move planning– Consolidation and cost allocation acrossg p g

OTM v6.2.3– Management of APL Logistics’ OTM

solution– Project management & implementation

Consolidation and cost allocation across multiple lines of business

– Bulk planning for optimization and pool distribution opportunities

Project management & implementation services

– Systems integration and testing services– EDI between Customer and APL Logistics

– and 200+ customer carriers


and 200+ customer carriers

22

Benefits

More automated, less manual processesAccessorials: CSR’s now have a full

Extensive Ops. & Mgmt. Reporting– KPI scorecards

– POD Mgmt: APL Logistics can now ccesso a s CS s o a e a upicture of the total costs of shipmentsCarrier Compliance: Compliance now tracked at the shipment level

f

g gprovide KPI reporting by mode, carrier, at the Business Unit, segment level

Validation of carrier indemnificationC t i ti t O dMass order uploads from

spreadsheetsCost savings reporting at Order, Business Segment and Business Unit level

Strengthened Business Relationship Through Adding ValueImmediate Operational and Productivity BenefitStrategic Strength through System Scalabilityg g g y y


ShipmentOptimizer™ Video

OTM: Bringing Value and g gDifferentiation to Supply Chain Segments - Internationalg

OTM as a Service Differentiator

Automated Shipment Planning whichRespects business rulesDynamically select best routey yPropose equipment mix using innovative planning algorithm

Informative planning screens to guide transportation decisionsBooking exceptionBooking exceptionBooking authorizationShipment proposalShipment collaboration and authorizationShipment collaboration and authorization


Considers Incompatibilities During Bulk Planning

Example of business rule :CFS load and Factory load not allowed in same containerLaunch and Non-launch cannot be in same containerMixed commodities can be co-loaded in same container


* Expect system to recommend 4 groups based on incompatibility

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


Air

Sea-Air (Origin-Dubai-Destination)

Optimization Algorithm for Best Container Mix

“Traditional” Con-ops

1. Orders with similar delivery date are grouped

“Schedule-aware” con-ops in conjunction with Column Generation algorithm

1. Each order will do voyage evaluation to determine potential voyagespotential voyages

2 Each orders’ group will search for best voyage2. Each orders group will search for best voyage

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

4. System assigns container to order group

20FT

40FT

20FT

3. System will compare the results and assign optimal solution

40FT


40FT solution

Automated Exception Detection

System is configured with customer-specific exception rulesEBAs 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 divisionEBA EDOD21 Booking EDOD is 21 days earlier that UDD. For C division

EBA WS Booking EDOD is 14 days past that UDD. Non-POE H&C orders beginning with ‘WS’. Reject if EDOD is 14 days past UDD

Booking exceptions are marked with value “Y” in the respective EBA column on

Booking Exception

the screen

Booking Exceptiondetected

No exception


Recommends Optimal Shipment Proposal

Optimization result after automatic bulk planningRecommends best mode of transport

Recommends best voyage

Order groupageproposal with display of cargocharacteristics

Maximize equipment utilization

Approval management

Status monitoringg g


Shipment Approval Screening

BookingCargo Received

Request for ApprovalPO / CIR Approved

Container Stuffing

ETDGAC-5D IDDGAC-X ETD-2

System is configured with “Auto Release” rules based on Customer’s business requirementSystem is configured with Auto-Release rules based on Customer s business requirementWhen 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 CustomerShipments under “Manual Approval Required” needs to be sent for approval by Customer

Type Of Exception Description Factory Load APL Logistics LoadeLoadability Minimum Loadability Size CBM Size CBMy y

20’40’

40H’45’53’

24-2850-5860-6870-78?-100

20’ 40’

40H’45’53’

24-2850-5860-6870-78?-100


All 20GP need approval All 20GP need approval

Shipment Collaboration

After Reviewing shipment APL Logistics’ operations inputs Shipping Instruction before triggering “Request For Approval”


Shipment Collaboration – Approval Work Queue

Approval workflow

Approval actions


Shipment Collaboration –History of Shipping Instructions and Actions


International Case Study

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

Consumer Markets

Consumer Markets

Manufacturing Bases

Consumer Markets

Natural disaster changed spending

pattern

Social mediaincreases the pace

Manufacturing Bases

M f t i

a ets

Manufacturing Bases

Consumer MarketsRecession reduces

spending and choice of purchases

Rising income increases demand for

luxury goods

Stronger regional integration heightens

trade flow

pof change in

lifestyle

Manufacturing

Manufacturing BasesManufacturing

BasesManufacturing

BasesKey Consumer Markets

Key Manufacturing Bases

Raw Materials Flow

Finished Product Flow

Consumer Markets

Bases

The impending World Cup and Olympics change the market demand of Brazil

Flood impedes production and supply

to global market

2010 global trade (TEU): 450 mil.- Underlying product flow, are information, documentation, and financial flows.


Case Study – Evolution of Value

Immediate Value Proposition– Implementation

• Process yields better, more efficient network rulesProcess 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 PropositionDynamic Networks– Dynamic Networks• Ability to quickly and decisively change product flow across network• Enables a rapid response to market conditions, volatility or

opportunitiespp– Synchronization with ERP systems

• Interesting connection points with order planning, demand planning• “New Era” in Demand Driven Networks


Otm 2013 c13_e-22a-lim-joshua-otm-as-a-service-differentiator

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