Sanga Transportation Market Plan

Sanga E-Transportation Product Marketing Plan

1. TRANSPORTATION OVERVIEW

Emerging from a less than robust economy, the nation's transportation industry appears poised for a generally healthy future. Part of that outlook is because of the restructuring and reorganization that has taken place in recent years--leaving fewer stronger companies. This consolidation is particularly evident on the freight side of the transportation industry--the principal focus of this report. Further, as transportation companies continue to strengthen themselves, they will continue to make substantial investment in their operations, including information technology.

A key driver in the transportation industry is the customer-driven mandate to reduce inventory throughout the distribution channel. This desire is manifested in a number of emerging management techniques that companies have been implementing since the early 1990s. These include delivery time-definite, inventory minimization programs such as just-in-time distribution, quick response in the retail industry, efficient consumer response in the grocery industry, and vendor managed inventory.

Transportation companies have been forced to develop services that respond to this burgeoning demand--and for the most part have done so successfully. The motor carriers, for example, are expanding their cross-docking operations to keep inventory handling time to an absolute minimum. They also are implementing next-day delivery programs wherever possible. Air express companies such as Federal Express are offering earlier morning delivery products. Some have even entered the same-day delivery business as a response to a new emphasis on time-based competition. Railroads and ocean carriers, too, are offering more time-definite service options.

Central to more effective inventory management and timely delivery is the ability to capture shipment-status information on a real-time basis and integrate that information with internal systems. At least one company, Encompass (a joint venture of transportation giants AMR Corporation and CSX Corporation), has been formed expressly to achieve that level of integration on a worldwide basis. Electronic data interchange (EDI) systems are critical to capturing and exchanging shipment data. Because of that, EDI applications are projected to grow rapidly within the transportation industry. EDI Group Ltd., a research and consulting firm, projects that although the $45 billion EDI market will grow by 6 percent, spending among transportation companies is expected to outpace that figure at 10.2 percent.

This same technology that helps carriers do a better job of managing their customer's shipments also enables them to more effectively control their rolling assets. Simply stated, the objective is to keep as many trucks, railcars, planes, and ships as full as possible for every single mile traveled. IT systems and a range of software packages for dispatching, load planning, routing, and scheduling help accomplish this objective.

Reflecting the generally strong--or at least rebounding--financial health of most transportation sectors, the transportation industry is poised for significant investment in information technology. Preliminary Dataquest estimates identify transportation spending for IT products and related services to be $6.3 billion; specifically, IT professional services and systems integration was $1.67 billion and is projected to grow at a compound annual growth rate (CAGR) of 14.6 percent to reach $3.3 billion.

IT solutions will be directed toward the following business challenges:


• More effectively manage its equipment for optimum utilization and return • Develop an increasingly customer-focused culture in certain sectors such as rail and ocean

transport • Better control costs and continue to streamline operations • Integrate information gathered from various technologies into a single system • Encourage customers to develop commercial relationships on the Internet • Countering the decline of the national long-haul unionized trucking companies in the face of

tough competition from nonunion regional competitors • With deregulation on the horizon, ocean carriers must become more efficient and competitive • Cope with--and in some cases reverse--the trend for companies to outsource their

transportation buying decisions to outside specialists • Develop partnering technology that will allow transportation providers to capitalize on the

"core carrier" trend among shippers • Achieve competitive edge through information technology to overcome physical constraints

of a particular transportation mode

The following information is a more focused view of key business trends influencing the decision process for IT products and services in the transportation industry. These trends are organized by listing the business trend first and are followed by the associated technology impact.

Consolidation Business Trend: Industry Volume and Revenue Consolidation In virtually every transportation segment, volume and revenue are concentrating into fewer companies at the top. In the rail industry, for example, fewer than 10 carriers now control more than 90 percent of all rail freight movements in the United States. The same phenomenon, although on a slightly reduced scale, is taking place in the trucking, air, and ocean transportation industries. Although some niche players have successfully entered the transportation industry in recent years, the overall trend has been toward fewer and larger transportation companies. The stage for these consolidations was set more than 15 years ago when the freight transportation industries in the United States were deregulated. Technology Impact: Systems Integration Emphasis As transportation companies consolidate, they will increasingly turn to IT professionals to help combine and integrate diverse systems. This is particularly true in the rail industry that over the years has built up cumbersome proprietary systems. Revenue sharing, scheduling, and shipment status are among the information areas in need of integration. Though many have attempted to accomplish this integration with in-house IT resources, an increasing number now are turning to outside specialists.

"Core Carrier" Concept Business Trend: Emergence of the "Core Carrier" Concept As a parallel trend to industry consolidation, shippers (the consumers of the transportation industry's services), are using fewer and fewer carrier partners. This is commonly referred to as the "core carrier" concept. Basically, the shippers are relying on fewer transportation carriers for the following reasons:

• To negotiate lower rates in exchange for a promised level of freight • To receive better, more reliable service because the carrier agrees to have equipment available

when needed • To reduce their administrative burden by having to deal with fewer carriers


Ten years ago, a Fortune 100 company may have dealt with 125 motor carriers across the country. Today, it's not uncommon for that same company to do business with only 10 or 15. Technology Impact: Electronic Information-Sharing Between Partners Core carrier relationships are partnerships between the shipper and the transportation company and, as such, require frequent sharing of information. This means electronically exchanging advance ship notices, dispatching instructions for pickup and delivery, and establishing automated systems to verify proof of delivery. Systems to automatically audit and pay freight bills will become increasingly prominent as companies continue to downsize their internal traffic departments and deal with fewer carriers. In addition to rate and service issues, shippers consistently rank the quality of information systems as a priority in their core carrier evaluation criteria.

Third-Party Logistics/Outsourcing Business Trend: Functional Outsourcing Increasing Outsourcing of transportation and traffic department functions has increased in recent years. One estimate is that the market for providing outsourced logistics services--also known as third-party logistics--has now reached $15 billion and is expected to increase to $50 billion by the end of the decade. Outsourcing essentially means taking a function that used to be done in house and turning it over to an outside specialist. Companies are embracing logistics outsourcing for a number of reasons. For one, outsourcing of a transportation activity (such as operating a private truck fleet), allows companies to concentrate more intensely on their core competencies. It often results in a dramatic reduction in the headcount. Also, outsourcing can result in reduced transportation costs because of the economic leverage that third-party providers can achieve. Technology Impact: Logistics Services Providers Make Significant IT Investments Outsourcing, or third-party logistics, is a heavily information-intensive activity. Typically, when companies turn to a third-party logistics provider to handle their transportation or distribution operations, they are relying on the systems that the provider can bring to the table every bit as much as the transportation service. Information technology such as mobile shipment-tracking systems, bar coding, radio frequency (RF) materials handling systems, and related software plays a pivotal role in the emerging third-party logistics industry, as evidenced by growing IT expenditure. One major third-party provider, Ryder Logistics Services, invested more than $150 million in systems and technology.

Transportation and Distribution Processes Business Trend: Streamline Transportation and Distribution Processes For at least a decade, U.S. companies have worked diligently to cut their inventory costs. One of the primary ways to accomplish this is through streamlining the transportation and distribution process. This trend has accelerated in the 1990s with the more widespread adoption of such inventory-reduction processes as just-in-time distribution, quick response, efficient consumer response, and cross docking. All of these techniques embrace one underlying objective: to reduce the amount of standing inventory in the pipeline. Class Information Systems, a logistics research and consulting company, suggests that companies have been largely successful on this front. Inventory costs as a percentage of gross domestic product (GDP) had dropped to 4.1 percent in 1994, down from 5.8 percent four years earlier. Similarly, online direct-distribution products are an emerging area of opportunity for all types of IT vendors as transportation companies, especially airlines, see direct distribution as a means to help cut distribution costs. Direct distribution via the Internet allows airlines cost reduction in CRS bills and the potential to improve customer relations through direct online reservation and related services capabilities that


bypass the use of traditional travel agency-based channels as the primary means for product distribution. Technology Impact: Worldwide Tracking Systems Are Key Many information technologies introduced recently target the reduction of standing inventory in the pipeline as a principal objective. A main objective of satellite and cellular communications systems used in the transportation industry, for example, is to track inventory as it moves to the consignee. Similarly, the worldwide tracking systems, such as ENCOMPASS, that monitor movement of global shipments are largely a response to the desire to more effectively manage inventory. EDI programs for automating dispatching and releasing freight are all part of an overall effort to cut inventories. The mantra that maintaining inventory within the pipeline will negatively impact a corporation's profitability is only expected to intensify during the foreseeable future. To the extent that systems developers can address that imperative will increase their success. Again related to direct distribution, major airlines such as Delta, U.S. Air, American, and United have teamed with technology providers such as Microsoft, Electronic Data Systems, and AT&T to facilitate offering reservation services via the Internet, as are major travel agency players, such as American Express and Carlson Wagonlit. Communications providers are developing their own offering as part of existing services, such as AT&T's Personal OnLine service, and facilitating development of new capabilities, such as Delta's partnership with Radish Communications Systems, that will increase online usage.

Time-Definite Delivery Business Trend: Increasingly Tight Delivery Windows Closely related to the desire for reduced inventory is the emphasis on time-definite delivery, or more specifically fast time-definite delivery. The same just-in-time and quick response programs previously mentioned will work only when shipments arrive on time. Transportation companies that can meet the increasingly demanding tight delivery windows--at a low cost--position themselves for success. Increasingly, meeting the promised delivery date is not enough. The new imperative goes beyond getting it there when promised; it means delivering the goods faster than the competition (the basis of time-based competition). That's why air express companies introduce earlier and earlier morning delivery programs and why trucking companies continue to expand the radius of their next-day guaranteed programs. Not surprisingly, what was viewed as premium transportation service in many areas is now considered to be the industry standard. Therefore, transportation companies must find new ways to differentiate themselves. Technology Impact: Technologies Used to Overcome Physical Constraints Are "Hot" Transportation companies need to develop the information systems that will help them gain competitive edge. With transportation, the actual physical movement of goods is finitely constrained by the equipment used to move the goods and regulations covering each mode. For example, it's physically impossible for a truck to legally drive from New York to Los Angeles in two days. But transportation companies can use their information to reduce transit times. Technologies such as cellular and satellite dispatching and tracking, automated notification of loads to be picked up, and self-ticketing technology used by the airlines represent areas where carriers can use IT to reconfigure their operations and overcome physical constraints.

International Services Business Trend: Demand for International Transportation Services More and more U.S. corporations are competing on the international arena, encouraged by treaties such as GATT and NAFTA, and the increasingly global nature of today's marketplace. With that growing global perspective comes the demand for international transportation services.


Ocean carriers report that their tonnage has increased in certain trades. Similarly, air transportation companies report that international is the fastest-growing segment of their business. The nation's railroads rely heavily on international traffic. The rail industry's biggest chunk of intermodal container traffic, for example, is related to imports and exports to or from the Pacific, Atlantic, and Gulf ports. Lastly, under NAFTA, gradual increases in scope of activity were initiated that will allow U.S. and Canadian motor carriers to provide international cross-border trucking services (in and out of Mexico) and for Mexican carriers to receive operating authority (in and out of the United States and Canada). Technology Impact: Development of Communications Capabilities The same information demands placed on domestic transportation companies are now being placed on international carriers. IT companies need to develop the worldwide systems that will allow the global carrier to respond to those demands. Satellite tracking and global positioning systems will play a prominent role in this effort--particularly in light of the U.S. government's recent decision to give commercial access to precise global positioning system (GPS) location data previously reserved for the military.

Restructuring Business Trend: Restructuring of LTL Segment The restructuring taking place in the less-than-truckload (LTL) segment of the motor carrier industry is so profound that it deserves special attention because virtually every shipper has used LTL transportation for at least some portion of their freight. There's significant retrenching and reconfiguration of the longhaul LTL industry and the parallel growth of regional carriers in that marketplace. The large unionized nationwide trucking companies such as Yellow Freight, Roadway Express, and CF Motor Freight are steadily losing market share to their mostly nonunion regional competitors. The ironic part of this development is that some of the most aggressive nonunion regionals, such as the Roadway Services Co. regional truckers and the Con-Way (Consolidated Freightways) group of carriers, are offshoots of long-haul truckers. The challenge for these large carriers is to restructure their operations to overcome the union differential, retain customers profitably, and ultimately stay in business. Technology Impact: Upgraded Technology Creates New Business Challenges These nationwide LTL companies, struggling of late, introduced many of technology advancements into the trucking industry. Imaging systems for automated proof of delivery, electronic auditing and payment, and electronic notification of shipment availability were all introduced by these carriers. Now, the capabilities/efficiencies of technology are expected as a normal course of doing business. For long-haul carriers, the challenge is to identify how to use technology to improve their competitive positioning. For smaller, regional trucking companies that are filling the void left by nationwide carriers--particularly those carriers that are not part of a larger group--the business challenge is to develop the information technology infrastructure that will effectively support the level of service that customers now routinely expect.

Cost Control Business Trend: Tight Cost Controls On both the passenger and air cargo sides of the business, air transportation companies are intently pursuing more effective ways to control costs. The passenger airlines believe that the only way they can sustain the profitability is to tightly control costs. The airlines that also carry freight in the "belly" of their aircraft are striving to stem the erosion of business to the integrated cargo carriers such as Federal Express and United Parcel Service. A big part of this challenge relates to better controlling costs; the other parts and Airborne. Operational effectiveness and marketing acumen are the other elements.


Technology Impact: Technologies Target Operating Costs, Capacity, and Utilization Information technology that enables the air transportation companies to control operating costs, improve capacity (passenger and cargo), and improve overall aircraft use will be greatly in demand for at least the next few years. Systems for self-ticketing; direct booking via the Internet; passenger revenue accounting to more accurately pinpoint the profitability of certain routes; and passengers will see widespread acceptance in the industry. On the cargo side, airlines will seek out EDI technology that more effectively and swiftly links the airlines and the air freight forwarders that they rely upon for pickup and delivery, as well as for the majority of the freight that they carry.

Public Awareness and Safety Business Trends: Increasing Public Awareness and Demands Regarding Safety Issues Maintaining safe operating conditions for delivery (freight and air) of vehicles, airlines, railroads, and ocean liners is critically important in the transportation industry. Regular maintenance and on-demand, emergency repairs need to be efficient and fast in today's environment. Further, transportation companies across the industry segments must often adhere to increasingly strict and formalized maintenance procedures imposed by government agencies, such as the FAA. With the occurrence of domestic and international air, rail, ferry (water transport), and trucking disasters well publicized in the U.S. media, public awareness and passenger demands related to safety records and operating procedures are rising. Technology Impact: Development of Technologies Targeting Safety and Maintenance On-board communications capabilities allow capture and transmission of on-demand, sensitive diagnostic data that can expedite routine maintenance and possibly lower the potential for a public disaster. In cases of emergency, the driver can communicate the exact problem to a maintenance crew that can offer remote diagnosis and recommendations related to the problem. For example, Qualcomm's Vehicle Information System products reside in the onboard communications unit and monitor electronic data via a data link connection to the engine flywheel (RPM) and transmission tailshaft (speed), functioning similar to a trip recorder. Data can then be transmitted via satellite to a dispatch center or third party. Key enhancements to these products target exception-based messaging, for example, where trailer monitoring can occur whether or not a vehicle is attached to a truck outfitted with an OmniTRACS system and are designed to use a low earth orbit satellite system.

2. TARGET MARKET

2.1. Description The transportation industry is comprised of trucking companies, railroads, ocean carriers, airlines, and air cargo carriers. Each segment of the transportation market is defined as follows:

• Trucking − Private fleets (owned and operated by manufacturing/service companies for

their own use) − For-hire trucking companies (truckload, LTL, and specialized carriers) − Surface package carriers (parcel companies like United Parcel Service)

• Railroads − Freight transportation (CSX) − Passenger transportation (Amtrak)


• Air transportation − Air cargo (Federal Express, Airborne) − Passenger airlines (American, Delta, Northwest)

• Water transportation − Ocean transportation (steamship lines) − Inland waterways (barges)

2.2. Size and Opportunity The total size of the U.S. transportation market for IT products and related services i is estimated to be around $13.1 billion and should grow to over $15 billion (Forrester Research, Vertical Market Opportunities in Transportation).

This places Dataquest’s estimate for the transportation software market for transportation at $1.03 billion and $1.11 billion. But as the segmentation of the market will illustrate, the transportation software market may actually has an upside of $3.55 billion.

2.3. Trends

2.3.1 Business Trends Technology is making significant changes to they way companies communicate with their clients and to each other. Technology that remotely executes diagnostics on a truck is already being deployed. This allows individuals at the home-site to schedule service at the nearest dealer and ensure the parts are on location. Pilots can now get data over radio carriers for current weather conditions, landing approval, and flight plan changes. Customers can obtain real-time delivery/arrival/location information for airlines, parcels, trains, and trucks via phone and the Internet. The Web will be a significant player going forward as companies provide comprehensive services to their customers online. The following chart summarizes the key trends in each of the key private transportation segments:

Market Trends and Issues

Overall

• Concentration of major players across all transportation industries.

• Outsourcing of company-performed transportation functions to outside logistics specialists.

• Business restructuring, internal reorganization, and re-engineering to achieve stronger customer orientation.

• Explosion of commercial development of GPS in wake of government decision to allow increased access to more exact GPS data.


Source: Dataquest

Railroads

• Accelerated merger activity, with additional acquisitions likely in the future.

• Development of new equipment and services to stem erosion of market share to truckers.

• Increased linkages between railroads and motor carriers in providing intermodal service.

• Implementation of industry-wide information technology among the Class 1 ($256 million-plus in revenue) rail lines.

Trucking

• Long haul, unionized less-than-truckload (LTL) carriers struggling; regional, non-union competitors relatively prosperous.

• Implementation of new technology, such as satellite tracking and on-board computers, becoming a competitive necessity.

• Growth of the "core carrier" concept and parcel delivery companies into the lower-volume end of the traditional trucking market.

• Penetration by air express carriers and parcel delivery companies into the lower-volume end of the traditional trucking market.

Air Transportation: Passenger Airlines

• Build-upon profitability after five years of losses through careful route selection and more adequate fare structures.

• New "open skies" environment in international aviation to accelerate growth of fast-growing international passenger business.

• Increasing concentration of major players in the industry; further consolidation expected by the end of the decade.

Air Transportation: Cargo

• Accelerating trend toward earlier morning deliveries as well as same-day service.

• Continued concentration of both volumes and revenue in the hands of the integrated air carriers (for example, Federal Express, Airborne) at the expense of the forwarders-airlines.

• Increased use of the Internet to transact business directly with customers.

Water Transportation

• Expected deregulation of the maritime industry to free up competition and force steamship lines to operate more cost-efficiently.

• Worldwide emphasis on inventory reduction and "just-in-time" demands forcing ocean carriers to adopt technology to better monitor and track cargo movements.

• Overcapacity an issue in certain trades, mandating that ocean carriers more aggressively manage their vessels and equipment.


2.3.2 IT Trends The transportation industry traditionally has not been perceived to be on the cutting edge of new technology. Yet the industry is now emerging as a sophisticated user of IT systems and services. The transportation industry can boast of a wide range of IT applications, some can even be considered leading edge. The industry's emphasis on service enhancements (faster and cheaper), cost controls in intensely competitive markets, and comprehensive tracking of freight and passengers at each point of the move all require the efficient transfer of information among trading partners and the effective integration of that information into internal business processes.

The transportation industry is placing heavy emphasis on information technologies such as EDI, mobile, and cellular communications. These need to be carefully integrated with business processes and support the companies' customer service and cost objectives. Technologies will support enterprise-wide strategies such as customer service, logistics management, invoicing and auditing, and tracking using high-speed networking and internetworking, open system-based computing for decision support, bar code scanning, mobile computing, and cellular and satellite networks. These technologies are critical to the transportation industry's ability to maintain visibility over freight movements. In all segments of the transportation industry, the key to success and long-term viability is to move information as expertly as goods and people are moved. This, in turn, enables transportation companies to provide their customers with superior service more efficiently and at lower cost. Therefore, the industry focuses intensely on business and process integration.

Transportation companies will find the following enabling technologies of primary interest:

• Automated load acceptance and dispatching systems • Automatic equipment identification (AEI) • Automotive vehicle identification (AVI) • Bar code scanning • Cellular technology • Client/server technology • EDI • Handheld computers and mobile computing • Imaging systems • OCR and electronic signature technology • On-board computers • RF systems and equipment • Satellite technology/GPS • Scheduling and vehicle routing software

3. MARKET SEGMENTATION To define the segments, the following assumptions have been used:

• Operating revenues for the industry/segment were based on the latest available data from the Bureau of Transportation Statistics. The median of all transportation companies IT budgets is 6% of revenue (Gartner Group, End-User IT Expenditure: Vertical Markets).


The reported mean was 1.5%, so given the disparity between the mean and median, the median will be used as it reflects a better average.

• 16% of IT budgets for transportation companies are spent on software acquisition, renewals, and licenses (Gartner Group, Vertical Market Opportunities in Transportation). When growth rates are applied, the actual YOY (year over year) growth rate has been used based on Gartner Group’s “Vertical Market Opportunities in Transportation”. If the baseline year precedes the start of this information, the growth rate is applied.

3.1. Segment 1: Railroads

3.1.1. Opportunity

3.1.2. Trends Key business challenges facing rail carriers:

• Improve asset utilization and control capital expenditure • Enhance customer service • Close gap between cost of capital and net income • Change customer perceptions on service • Implement inter-railroad EDI systems • Handle mergers and acquisitions effectively • Create new markets for new services like RoadRailer and Iron Highway • Regain momentum of intermodal service • Create an enterprise-wide data access architecture • Align information systems with the transportation business strategy

The railroads' single biggest technology investment to date has been for AEI systems that automatically track railcars as they move across the country. The $250 million investment has resulted in more than 95 percent (about 1.3 million) of railcars now being tracked electronically throughout North America. Stationary scanners read railcar tags as they pass by and transmit the information electronically to the railroad's computer. The most pressing requirement related to full utilization of AEI technology is development of software programs that will enable the railroads to optimize their use of existing data. AEI systems can assist railroads in slashing costs, reducing transit times, and

SectorOperating

Revenues (in millions)

Est. IT Budgets

(6%)

Est. Software Budgets (16%)

Est. Software Budgets

(15.2% growth)

Passenger 59 3.54 .57 .65

Freight 31,889 1,913 306.08 352.6

Other 745 44.7 7.15 8.24

Amtrak 1,555 93.30 14.93 17.2

TOTAL 34,179 2,054.54 328.73 378.69


streamlining administrative operations. These benefits have become critically important in light of the industry's consolidation and restructuring.

A related project called Rail EDI, provides shippers with a uniform, PC-based system for interfacing with all of the Class 1 railroads ordering cars, entering bills of lading, tracing shipments, and exchanging e-mail. The railroads expect to roll out this program in 1996. The next step in the evolution of this shipment-tracking and management process is new "dynamic" tags under development that will include information of the operation of the locomotive and contents of the freight being hauled.

The railroads have also launched an initiative called Interline Settlement Management (ISM), an IT program that establishes industry-standard formats for railroads to exchange scheduling, car ordering, track sharing, and other information related to service scheduling. Standardized interchange language is important in this industry because a large percentage of rail freight moves on more than one line.

Finally, Amtrak and the freight railroads are investigating the use of GPS satellites for enhanced train safety. Satellites monitor the distance between trains and immediately notify the railroads' dispatching computers as soon as a potential safety problem arises.

3.1.3. Target Customers The following 8 accounts represent approximately 90% of the revenue and 88% of the software budgets for the rail transportation segment.

Source: Association of American Railroads, Bureau of Transportation Statistics

3.2. Segment 2: Trucking

Rank RailroadRevenue

(millions of dollars)


Est. Software

Budgets +2

1 Union Pacific 5,167.2 49.60 57.14

2 Burlington Northern 4,699.4 45.12 51.98

3 CSX Transportation 4,625.4 44.40 51.15

4 Norfolk Southern 3,918.1 37.61 43.33

5 Conrail 3,641.5 34.96 40.27

6 Southern Pacific 2,941.5 28.24 32.53

7 Santa Fe 2,680.9 25.74 29.65

-- Amtrak 1,413.0 13.56 15.63

TOTAL 29.09 279.23 321.68


3.2.1. Opportunity

3.2.2. Trends Key business challenges facing the trucking industry include:

• Restructuring and consolidation of the industry • Competition from air express companies such as Federal Express and surface parcel

carriers such as UPS • Responding to increasing demands for faster, cheaper service • Incorporating technology to track freight movements on a real-time basis • Integrate tracking and tracing systems with internal business systems • Coping with near-complete deregulation of the industry at both the national and state

levels • Increasing local competition as the industry moves toward a more regional structure • Increasing equipment utilization through information technology

The trucking industry has been revolutionized, almost literally, by information technology over the past decade. The most dramatic advances are in the areas of mobile communications systems, on-board computers, and advanced software packages for scheduling and routing freight as well as other management tasks.

Mobile communications systems allow for real-time voice and data communication between the vehicle and the dispatcher as well as real-time positional tracking of the vehicle. Among the mobile communications systems, two-way satellite communications were the first in the market and presently enjoy the greatest market share. A more recent entry into the mobile communications field for the trucking industry is cellular tracking and information systems. These two-way tracking and messaging systems allow drivers

SectorOperating


Est. IT Budgets

(6%)


Est. Software

Budgets +2 (15.2% growth)

Local Trucking

41,393 2,483.50 397.36 457.76

Trucking, except Local

95,814 5,748.84 919.81 1,059.63

Local trucking with storage

4,410 264.60 42.34 48.77

Courier Services, except by air

23,654 1,419.24 227.08 261.59

TOTAL 165,271 9,916.18 1,586.59 1,827.75


and dispatchers to exchange voice and data information anytime the vehicle passes through an active cell area, which means most of the United States.

On-board computer systems, increasingly recognized as an essential productivity tool for fleet managers, are becoming common in progressive trucking companies today. These systems, located in the cab of the vehicle, automatically capture data and fuel consumption, idle time, RPMs, and miles per gallon. Some of the newer systems automatically track and record inventory as it is loaded or unloaded to or from the truck. Rockwell also has added to its on-board computer systems a portable handheld data device called DataTrax/GPS, a global positioning system that automatically senses and records state-line crossings for mileage and tax-reporting purposes.

Software programs for the trucking industry abound. Broadly speaking, they automate manually intensive activities. Routing and mileage programs recommend drivers optimum routes for making their deliveries while precisely recording the mileage. One of the leaders in the field, ALK Associates, has incorporated Windows 95 software into its units. ALK offers a new related program that automatically calculates all aspects of fuel and mileage tax tracking, calculations, and reporting.

3.2.3. Target Customers

Source: Commercial Carrier Journal

3.3. Segment 3: Air Transportation

Rank Name Revenue

1 United Parcel Service Trucking $15,730,318

2 Roadway Express Inc.. $2,577,328

3 Schiender National Carriers $2,512,100

4 Yellow Freight Systems $2,509,537

5 Consolidated Freightways $2,187,801

6 Roadway Package Service $1,581,754

7 Con-Way Transportation Services $1,359,550

8 J.B. Hunt Transport Inc. $1,351,007

9 Ryder Integrated Logistics $1,298,408

10 ABF Freight System Inc. $1,136,402


3.3.1. Opportunity

3.3.2. Trends Key business challenges facing the air transportation industry include:

• Build for the long term on the economic upturn of 1995 • For airlines and forwarders, halt erosion of market share to integrated carriers • Implement systems that more closely inform customers of shipment status • Create new service products with expedited and deferred delivery options • Capitalize on growing international market • Incorporate new cost-cutting information technology • Encourage commercial transactions on the Internet

Back on the profit track after five years of losses, airlines are expected to invest heavily in new technology. Early signs of this are evident. Cost control and tighter asset management will be a major focus of any such investments. Passenger revenue accounting systems and self-ticketing are key application areas for new technology investments in air transportation and in seeking enhanced cost control with new passenger revenue accounting systems. Such systems can incorporate all passenger sales and usage information into an integrated data repository. Another example of an application of technology that can lower operating costs is the development and planned introduction of self-ticketing solutions into major airports such as Los Angeles, by major carriers.

On the cargo side, Federal Express is turning to the Internet. A new service will allow customers to complete an airbill on line and then print out a bar-coded shipping label. Users will have their own secure identification number. To use the service a web browser such as Microsoft Explorer 2.0 for software encryption is required. Notably, visits to FedEx's home page on the Web have already exceeded one million. UPS also recently launched a service allowing customers to obtain pricing information, arrange for pickups, and access shipment-status information via the Internet. As with other technology advances that airfreight express companies have pioneered, other transportation companies are expected to follow in their use of the Internet as a competitive tool.

One cargo air carrier has embraced enhanced radio frequency (RF) tracking to more rapidly exchange information and track shipments. Emery Worldwide in its main Dayton, Ohio hub has installed a 2.4-GHz spread-spectrum technology system called "PosiTrak" that can process 70,000 pieces in one hour. Emery's customer service centers and terminal network directly to the system.

SectorOperating


Est. IT Budgets

(6%)


Est. Software

Budgets +2 (15.2% growth)

Domestic 76,720.07 4,603.20 736.51 848.46

International 24,967.51 1,498.05 239.69 276.12

TOTAL 101,687.58 6,101.25 976.20 1,124.58


3.3.3. Target Customers The attached ranking of top air carriers represents approximately 88% of revenues and 76% of software budgets in the air transportation segment.

*Freight revenue only. Source: Air Transport Association

3.4. Segment 5: Water Transportation

3.4.1. Opportunity

3.4.2. Trends Key business challenges facing the water transportation industry include:

• Pending deregulation within the ocean carrier industry

Rank Air Carrier Revenues (millions of dollars)


Est. Software Budgets +2

1 American 14,951.13 143.53 165.35

2 United 13,887.15 133.32 153.58

3 Delta 12,345.78 118.52 136.53

4 Federal Express 8,998.53* 86.39 99.52

5 Northwest 8,929.32 85.72 98.75

6 USAir 6,578.59 63.15 72.75

7 Continental 4,798.18 46.06 53.06

8 Trans World 3,349.52 32.16 37.04

9 Southwest 2,416.56 23.20 26.73

10 UPS 1,464.31* 14.06 16.19

TOTAL 77,719.07 746.11 859.52

SectorRevenues (in

millions)IT

Budgets (6%)

Software Budgets (16%)

Software Budgets +2

(15.2% growth)

Domestic Freight

7,680 460.8 73.73 84.93

International Freight

17,281 1,036.86 165.90 191.11

TOTAL 24,961 1,497.66 239.63 276.04


• Meeting the time-definite delivery demands of today's customers • Coping with overcapacity in certain liner trades • Integrating satellite and position tracking systems with internal IT systems • Improved asset utilization through enhanced IT systems

Ocean carriers are pursuing technology to enable them to more effectively track freight, more accurately fix transit times, and communicate with customers. Similar to the evolution of other transportation modes, shippers are now demanding time-definite service from ocean carriers. The carriers are turning to EDI systems to give customers instant shipment-status information and to link with the ports to provide more accurate arrival and departure information. This advance notice leads to faster loading and unloading times. EDI systems are also being used to electronically transmit shipping documentation to customs authorities.

A good example of the technology being pursued is a program called COMPASS from Columbus Lines. This is a real-time interactive data network that links the carrier's North American offices. The system automatically assembles all documentation and shipment data from various offices for a specific shipment. It also helps Columbus determine the availability and location of equipment for particular moves. In an increasingly competitive, deregulated environment, systems such as COMPASS provide a valuable asset management tool.

Several new technologies under development or in the prototype stage are aimed specifically at the ocean carriers. Steamship lines have begun to test OCR technology for reading codes on shipping containers as they move through the terminal. Partially funded by the U.S. Maritime Administration, this technology is expected to improve container control and management.

Another high-potential technology is the "Supertag," a bar code alternative placed on the outside of a container. The tag contains a unique number encoded on a silicon chip and a radio transponder. It acts as an electronic label, allowing users to scan, identify, and count up to 50 objects per second.

3.4.3. Target Customers The following is a list of the top 10 water transportation companies by ton-equivalent units:

Rank Company TEUs

1 Sea-Land 597,456

2 Evergreen 533,829

3 Maersk 437,383

4 Hanjin Shipping 387,554

5 American President Line 323,225

6 NYK 255,911


Source: U.S. Global Container Report, PIERS, New York

4. PRODUCT STRATEGY

4.1. Objectives Vendors that want to prosper in the transportation industry should address the following issues and concerns:

• Cost concerns: Facing increased competition and tight margins, transportation companies in all freight and passenger sectors are striving to minimize costs.

• Return on investment: Managers in all transport industry sectors are concerned about achieving significant and rapid returns on investments in information technology.

• Asset utilization: Managers in the transportation industry are hungry for technology that will improve the use of their vehicles and equipment.

• Risk sharing: Transportation companies will increasingly look toward vendors to share the risks of their investments in IT.

• Legacy system integration: Rail, trucking, air, and ocean carriers all have significant installed bases of legacy systems and data that they are not prepared to abandon. New investments must incorporate legacy systems.

• Open systems: The transportation industry, particularly the railroads, is moving to open standards-based technology.

• Regulatory/compliance: Although most transportation segments have been economically deregulated for some time now, they still face numerous regulations in such areas as safety, work rules, and mandatory substance abuse testing.

• Alliances: As transportation companies increasingly move toward full-service logistics providers and blur traditional Standard Industry Classification (SIC) categories, they are seeking IT that will facilitate the transfer of information among these activities and to the customer.

The following table summarizes the key needs and IT solution for the transportation industry. Opportunities for Sanga are in bold.

7 China Ocean Shipping 236,793

8 OOCL 232,892

9 Hyundai Merchant Marine 231,313

10 Mitsui OSK Line 222,378

Industry Segment Business Goal IT Solution

Railroads Enhanced customer service

Automatic equipment identification (AEI) Internet access by shippers and intermodal marketing companies PC tie-ins to rail EDI systems Relational data bases Cross-platform data access


Streamlined operationsIndustry-standard EDI formats for scheduling, car ordering, tracking Decision support systemSatellite tracing for collision avoidance

Cost control

Interline data management systems Automation of scheduling and billing functions Profitability management systems Enterprise-wide asset management systems

Trucking Forming customer partnerships

Real-time shipment-tracking systems EDI links for dispatching, pickup, delivery, invoicing, and payment Document imaging technology Remote and mobile computing

Increased operational efficiency

On-board computers Satellite and cellular communications RF technology 2-D bar coding Document imaging Automated freight payment systems

Equipment utilizationRouting and scheduling softwareLoad planning and load building softwareMobile and cellular communications technology

Counteract driver shortageMobile and cellular communications Route and driver scheduling softwareShipment-management software

Air Transportation—Passenger Cost control, efficiency

Automatic/electronic ticketing technology Revenue accounting systems LANs, workgroup computing Profitability management systems Client/server technology

Increase cargo shareEDI links to freight forwarders Customer information systems Mobile and cellular communications

Air Transportation—Cargo

Operational efficiency, greater throughput

2-D bar coding Voice recognition technology Enhanced RF shipment sorting and tracking technology Remote/mobile computing.


Source: Dataquest

Product Families The following chart details product fits for each of the 4 segments of the transportation based on Sanga’s current product definitions and the needs from the chart above.

Enhanced customer access.Internet access for rates, pickup, and delivery Integrated customer information systems Real-time shipment tracking systems

Water Transportation Sales and marketing

Customer information systems/relationship management systems Internet access development Decision support systems

Improved vessel, equipment, and utilization

Interactive data networks OCR technology 2-D bar coding Transponder technology

Time-definite deliveryGlobal electronic commerce Satellite tracking technology PC-EDI links

Sanga Solutions

Rail Transportation

Trucking Air Transportation

Water Transportation

SES Architecture

Internet access by shippers and intermodal marketing companies PC tie-ins to rail EDI systems Relational databases Cross-platform data access Interline data management systems

EDI links for dispatching, pickup, delivery (replace with Internet)

Internet access for rates, pickup, and delivery

Internet access development Global electronic commerce PC/EDI links (Internet)

Load Brokering

Load planning and load building software Route and driver scheduling software

EDI links to freight forwarders (replace with Internet)

Track & Trace Real-time shipment tracking status

Real-time shipment tracking status

Logistics Enterprise-wide asset management systems

Shipment management software

Scheduling Decision support systems Automated scheduling

Route planning and scheduling software Route and driver scheduling software

Decision support systems


Other key facts: • 32% of load tendering/brokering will be on the Internet in the next 3 years, up from

6% currently (Forrester Research) • Communication of shipping information over the internet will grow from 22% to 62%

over the next 3 years (Forrester Research)

5. COMPETITION

5.1. Competitive Overview Independent supply-chain application vendors and ERP vendors have clear strategies in addressing this market. Independents want to grow the number of companies using their software, and the number of people in an installation using their software, and to forge ahead in vertical markets they are not strongly established in. ERP vendors, for their part, want to increase revenue and profit margin by increasing penetration within their own accounts, and to show potential new customers that their system addresses more than finance, manufacturing, and human resources, that it is, in fact, an enterprise system that spans all corporate processes from order management to shipping.

With these goals, one might expect that independent supply-chain planning and execution vendors and ERP vendors would be locked in fierce combat. Fortunately for end-users, many of whom use both ERP systems and supply-chain planning and execution systems, these vendors cooperate as much as they compete. Partnerships are the rule in the supply-chain world: supply-chain planning vendors have many partnerships with multiple execution vendors; and execution vendors have partnerships with ERP vendors. The one area of partnership that has cooled recently is partnerships between supply-chain planning vendors and ERP vendors. The partners, the top two independent supply-chain application vendors (Manugistics and i2) and the top five ERP vendors (SAP, Baan, PeopleSoft, Oracle, and J.D. Edwards) were once partners and have many customers in common, and continue to coexist in new deals. The following charts note the market share of each of the key competitors:

Ordering Integrated customer information systems (cargo) Customer information systems (passenger)

Customer information/relationship management systems

Billing Automated billing EDI links for invoicing and payment (replace with Internet) Automated freight payment systems

Proof of Delivery



Other Opportunities

Profitability management systems (with e-Finance)

Automatic/electronic ticketing technology Profitability management systems (with e-Finance)


This collaborative scenario started to sour for two reasons: ERP vendors began to market their own planning applications, with an eye on the lucrative supply-chain planning market; and independent supply-chain planning vendors, bolstered by larger and stand-alone installations, began to push the notion that systems could be more than a partner for ERP—in certain circumstances, they could be a replacement for ERP.

In the case of supply-chain planning functionality, the question may be whether a company can avoid buying it; ERP vendors have been very successful in acquiring and integrating planning “kernels” into their own offerings. If you have a live implementation of ERP, a certain amount of planning functionality may already be embedded in the system. As with any other IT investment, product features, the cost of additional licenses for access to more functionality, the cost of modification, and the length of implementation must all be considered. In particular, supply-chain planning offerings from ERP vendors may be sufficient if many of your supply-chain operations fall within your own organization, in the case of multi-plant operations.

For execution, the question is somewhat more complex; few of the top five ERP vendors have proven products in the execution area as of yet (there are significant exceptions to this, notably JD Edwards, whose warehouse management system has been shipping with little fanfare for over four years). We expect many ERP vendors to have shipping product beginning in the second half of the year. Additionally, we expect these products to address the core strategy of ERP vendors: to bring additional users on-line by adding standardized functionality. We believe that the addition of supply-chain execution functions—warehousing, transportation management, and order management—may bring these functions to many companies who currently have only minimal automation in these areas. For these companies, adding supply-chain execution functionality to their existing ERP implementation provides useful features without the large investment that installing and integrating three separate vertically-focused applications would require.

However, the Yankee Group does not believe that ERP vendors will sell their supply-chain planning and execution software in significant numbers outside of their own installed base, and many companies within their installed base who need very deep warehousing or transportation functionality may still install WMS or TMS systems that are exclusively tailored to their needs. This may change over time, with ERP vendors adding deeper functionality to both planning and execution modules—but adding features is a labor-intensive process that cannot be accomplished overnight. In the meantime, supply-chain planning and execution vendors are doing a remarkable job of forming alliances between themselves. Some are very ambitious: one recently-announced combined offering from i2 and Industri-Matematik International (IMI) is billed as a replacement for ERP as the enterprise backbone. The combined offering will include modules for revenue management, demand creation, channel management, and integrated warehouse and transportation management. Company executives contend that the combined offering can be a complete enterprise backbone, and that customers can add on financial and human resources applications as needed.

5.2. Transportation/SCM Planning and Execution Offerings Overview

SAP SAP’s SCOPE initiative includes planning components for inbound and outbound supply-chain management developed atop ILOG’s algorithm kernel.


In broad terms, the SCOPE initiative has three broad parts: SAP Advanced Planning and Optimization (SAP APO), SAP Business-to-Business Purchasing (SAP BBP), and SAP’s Logistics and Execution System (SAP LES).

The SAP APO applications had their first customer pilot in July; 50 additional customers received the product in September, and general availability is planned for December. The APO suite includes the Supply Chain Cockpit, a data aggregation and decision support environment for evaluating supply-chain decisions, demand planning, supply network planning and deployment, global available-to-promise, and a supply-chain- planning interface to allow companies to extend and customize SAP’s APO features. Additionally, SAP has developed SAP Rapid Planning Matrix (SAP RPM), which provides support for complex production planning and scheduling optimization.

The SAP BBP application supports employee self-service purchasing of maintenance, repair, and operations (MRO) goods. First customer shipment is scheduled for Q4, and general availability is slated for the first quarter. SAP’s R/3 system already contains several WMS and TMS features, but the Logistics and Execution System modules are designed to add many new features for warehousing and transportation management, including inbound and outbound processing, storage facility management, shipment processing, integrated shipment scheduling and routing, and freight cost management. Current customers include Rubbermaid Inc., Colgate-Palmolive Co., Earthgrains, Goodyear Tire & Rubber Co., and Nokia Corp.

Baan Baan’s Supply-Chain Solutions (SCS) includes several planning components aimed at different functional areas of a corporation and at enterprises of different sizes. The primary planning module, Supply-Chain Designer, enables supply-chain modeling and optimization; Supply-Chain Coordinator is the tactical tool aimed at distribution planning. Two additional modules, Demand Planning and Planner, work with forecasts and scheduling plant floor time, respectively. Many of these modules are based in part on technology acquired from Berclain: Berclain’s MOOPI product was an APS solution for factory production bottlenecks; under Baan’s stewardship, the planning engine has been extended to cover issues beyond the four walls of the plant. To fill out the execution portion of supply-chain functionality, Baan acquired CAPS Logistics in October of this year, and will add CAPS’s TransPro and RoutePro to its own offering.

Oracle Oracle’s Oracle Supply-Chain offering includes modules for Purchasing, Order Entry, Service, and Quality. All the modules integrate to Oracle Web Store and Oracle Web Customer for commerce transaction handling.

J.D. Edwards JD Edwards’s (JDE’s) SCOREx solution adds functionality to the company’s World and OneWorld ERP suites in four key areas: order management, warehousing, transportation, and customer service. Like SAP, JDE is a licensee of the ILOG toolset, which it has used to add advanced planning and scheduling capabilities in manufacturing and supply-chain management. As noted earlier, JDE has been delivering a fully functional WMS for over four years; as part of the SCOREx suite, the execution environment includes picking, packing, shipping, and receiving functions as well as many others. The


customer service module handles order management and call center management. Notably, JDE is including some aspects of product data management and human resources under the SCOREx umbrella with the intention i.e., of integrating product development and team resources with supply-chain considerations.

PeopleSoft PeopleSoft’s acquisition of APS vendor Red Pepper touched off a wave of interest in advanced planning and scheduling, and the company’s supply-chain and advanced planning functions are based on Red Pepper technology. PeopleSoft’s supply-chain offerings have a combined module for sales and logistics, as well as additional modules for inventory/materials management. PeopleSoft also gives away software for communication between companies and their partners. This supply-chain groupware offering, supply-chain Collaborator, provides cross-company workflow and communication features.

i2 i2 is one of the most ambitious of the independent advanced planning and scheduling vendors. Beginning with the company’s Rhythm Factory, i2 has branched out via development and partnerships to create cross-enterprise functionality; and it positions its offerings not only as a complement to ERP but, in some cases, a replacement for it. Partnerships with IMI and the acquisition of InterTrans Logistics have helped enable i2 to position itself as an alternative to ERP in distribution-centric environments. This hasn’t stopped i2 from having signal successes in environments where ERP and manufacturing execution system (MES) are in attendance, however. Key customers include many top material-intensive manufacturers in high-tech and elsewhere, including Compaq, Dell, major automotive supplier Visteon, Boeing, Motorola, and Unilever.

Manugistics Manugistics has been called “the 800-pound gorilla of consumer goods,” and for good reason. Many of the world’s largest consumer packaged goods (CPG) firms have installed Manugistics’s supply-chain planning suite to optimize operations. Recent difficulties and sluggish performance notwithstanding, Manugistics is widely acknowledged as a leader in supply-chain functionality for distribution-centered CPG firms. The company announced that it has been entertaining acquisition bids. The core modules of Manugistics reflect the broad functionality of their offerings: they include Configuration, Constraint-Based Master Planning, Demand Management, Manufacturing Planning & Scheduling, Material Planning, Network Design and Optimization, NetWORKS, Purchase Planning, Real-Time ATP+, Replenishment Planning, Supply-Chain Analytics, Transportation Management, and Vendor Managed Inventory. While Manugistics includes a TMS/transportation planning module, Manugistics is typically run in concert with a transactional system such as ERP, WMS, or TMS. To that end, the company’s products integrate with those of Oracle, SAP, Baan, Glovia, J.D. Edwards, Marcam, and SSA. On the execution side, the company has announced strategic partnerships with EXE Technologies (see below) and with Kurt Salmon Associates, a vendor of distribution management software recently acquired by Optum (see below).

SynQuest SynQuest’s Performance series of supply-chain planning applications include modules for demand management, inventory planning, transportation planning, manufacturing


management, supply management, and order promising, overlaid with supply-chain planning functionality. The company’s products have proved popular in industries that focus on durable multi-configuration products, and their customer list, which includes AT&T Wireless, B/E Aerospace, Kellogg, Peugeot, and Ford, reflects that; but Synquest also has a strong showing in process and food verticals and has succeeded with UPS, as well. Partnerships with factory automation giant Allen-Bradley have cemented the company’s hold on discrete and process manufacturers with high-tech factory lines. SynQuest has announced standard interfaces to J.D. Edwards ERP and SCOREx (see above) products, as well as to SAP. In the execution space, SynQuest has partnered Optum and Descartes (see below).

Logility Logility’s Voyager suites allow planning for both sides of the supply-chain planning coin —supply-chain, or incoming goods, and demand chain, or outgoing goods. In fact, the products are sold and packaged as two suites aimed at these two functions. The company has met with interest in its recently released demand forecasting applications, which tie in salespeople’s forecasts with inventory and replenishment planning. This is notable, since connection to sales puts many more people on the system than is typical for a planning application; one installation connects to the forecasts—and laptops—of over 300 salespeople. Being adjacent to the booming sales force automation market is apparently good for business, as Reynolds Metals, Mobil, and BT have all signed on. Other key customers include Eastman Chemical, Subaru, Campbell Soup, Sony, and Porsche’s aftermarket wing. The company has also launched several integration partnerships with top ERP vendors, including SAP, PeopleSoft, Oracle, and Ross Systems; it also inked a development partnership with Insight software for its algorithm-based transportation and supply-chain planning technology.

IMI Industri-Matematik International (IMI) is the largest developer of supply-chain execution software in the world. Despite the company’s fundamental strength and award-winning product suite, recent management upheavals and quarter-end photo finishes led many to speculate that IMI would be a takeover target as more vendors seek to add supply-chain execution to their portfolio. The company’s partnership with i2 is critical to i2’s strategy to supplant ERP as an enterprise backbone in distribution environments. IMI has also partnered with Crossworlds and Oracle and has a strong presence in perishable and durable consumer goods, apparel, and high-tech manufacturing industries; key customers include Nike, Campbell Soups, and Matsutshita.

Optum Optum has been one of the most active companies in the logistics execution space lately, assembling an executive team with strong experience in Logistics Execution Systems (LES), executing a flurry of partnerships with supply-chain planning and ERP vendors, including Syntra, PeopleSoft, and Synquest, and acquiring WMS vendor Metasys. Targeting the distribution, retail, and third-party logistics markets, Optum is also increasingly strong in the process and discrete manufacturing distribution segment, with customers including Cummins Engine, Xerox, Lucent, Octel, and chemical giant Celanese Mexicana.


PRODUCTION SCHEDULE

Phase 1 User Profile Customer Registry Business Registry Load Brokering 1.0 Track & Trace 1.0 Dynamic Alerting Billing 1.0 Proof of Delivery 1.0 ERP Integrator 1.0 EDI 1.0 Trip Plan Ocean, Rail, Truck Booking Reference Docs

Phase 2 ShipSmart 1.0 Load Brokering 2.0 Track & Trace 2.0 Proof of Delivery 2.0 ERP Integrator 2.0 EDI 2.0 Dynamic Trip Plan Purchase Order Monitor Air Booking E-Payment E-Insurance

Phase 3 Billing 2.0 Import/Export Management Customs Docs ShipSmart 1.5 with GIS Warehouse Integrator Pick/Pack 1.0 E-Inventory Financing

Phase 4 Consolidation/Deconsolidation Cross Dock Support Ramp Manager


PRODUCT DESCRIPTIONS

WebCMS (Customer Management System)

WebCMS controls the activities related to customer interaction and management. Specifically, handling and managing orders, creating and delivering bills and invoices, updating customers and companies on the status of their order or delivery, and confirm proof of delivery for customers and companies. These modules are named Ordering, Billing, Track & Trace, and Proof of Delivery.

WebSCM (Supply Chain Management)

WebSCM controls the activities of the supply chain (e.g. inventory, distribution, and transportation. Specifically, the interaction of vehicle owners, goods owners, and agents, planning and booking of inbound and outbound deliveries, managing domestic and international deliveries, monitoring carrier and delivery performance, updating customers and companies on the status of their order or delivery, and confirm proof of delivery for customers and companies. These modules are names Load Brokering, Schedule/Tracking, Logistics, Track & Trace, and Proof of Delivery.

WebCMS

Ordering

Handles the process of receiving, building, shipping, and confirming orders either from the distributor or carrier perspective. The system will log order and build a customer database based on customer information and tendencies. The system will also be able to track orders in order to confirm status and delivery.

Version 1 Provide item level description of goods in inventory for use by customer service agents and/or warehouse personnel.

Version 2 Tracks the status of order from inception to completion, ties in to Track & Trace to provide visibility across the ordering process, and reports on performance and inventory levels.

Version 3 Controls pick/pack operations with instructions and details of orders and customer needs.

Billing

Allows the electronic transition and management of bills, payment insurance, and lines of credit between customers and suppliers.

Version 1 Allows companies to prepare invoices based on data feeds and print or send invoices for customers.


Version 2 Electronic payment of singular or convergent invoices, other charges, and freight claims.

Version 3 Qualifies customers with lines of credit for inventories/materials in transit to manufacturer, supplier, or distributor.

Version 4 Offers commercial insurance on shipments that can be rated through online transactions.

Track & Trace

Maintaining through information positive control of packages, freight, containers, and cars from origin to destination.

Version 1 Tracking of packages, freight, and containers throughout pickup to delivery regardless of transportation mode. Geographic information system that tracks the status of containers, cars, or trailers throughout the carrier network. Dynamic alerting (proactive notification) of delivery problems or other non-events occur via Internet, pager, or email.

Version 2 Allows for integrator of data across carriers to provide tracking of all carriers through a common interface.

Proof of Delivery

Providing proof of delivery of shipments for use in satisfying customer demand and billing and invoicing for goods received.

Version 1 Provides proof of delivery on packages, freight and containers - can be tapped by customer service agents or customers via intra/internet.

Version 2 Provides proof of delivery electronically to vendors/banks for payment and ties to Dynamic Alerting for confirmation.


WebSCM

Load Brokering

Allows goods owners, vehicle owners, and agents to match delivery needs with carrier moves and complete transactions online in order to maximize vehicle utilization, meet customer need, and provide real-time information to all parties.

Version 1 Load brokering system that allows guests, administrators, vehicle owners, goods owners, and agents to match and confirm loads and carriers.

Version 2 Advanced functionality that includes route planning integration, proactive alerting for goods owners and vehicle owners, and activity and performance reporting.

Schedule/Tracking

Allows carriers to manage their inbound and outbound deliveries, book freight, monitor carrier and delivery performance, and ensure efficient use of resources and capacities.

Version 1 Coordinates, tracks, and edits departure and arrival schedules (trip plans) for ocean, rail and truck carriers. Allows for booking of freight and on ocean vessels on ocean, truck, and rail carriers.

Version 2 Enables booking of freight through air carriers (integrators and airlines). Coordinates multiple movements and modes of transportation, allows in-route changes and diversions, and alerts users on problems.

Version 3 Provides cross-dock Support to allows positive control of containers and freight during offload and onload procedures. Coordinates ramp activities to ensure efficient and effective use of ramp space and staffing, including monitoring of inbound and outbound traffic and all other related activities. Logs and tracks use of vehicles and containers when shipments are consolidated (e.g. multiple packages to one destination) or broken down (e.g. one container split into "n" number of shipments).

Logistics

Provides the infrastructure to manage domestic and international shipping needs, measures performance and plan for future developments/improvements, and integrates other planning software components in order to provide visibility throughout the entire supply chain.


Version 1 Allows completion of waybill and other needed reference documentation for shipping (e.g. bills of lading, manifests, etc.). Allows for integration of enterprise resource planning systems with SES and other systems. Reporting tool (ShipSmart) that provides shipper data and milestone reports for use in load and carrier planning and evaluation.

Version 2 Manages all aspects of international shipping and distribution, including waybill and customs documentation preparation, database of customs rules, regulations, and restrictions, and shipping patterns and performance. Enables multiple facilities to act as one warehouse with real-time information on inventory levels and needs. Enhanced ShipSmart functionality that includes lane analysis, carrier analysis, and in-transit evaluation, GIS capabilities.

Track & Trace (see above)

Proof of Delivery (see above)

Sanga Transportation Market Plan

Documents

Transcript of Sanga Transportation Market Plan