Tjalling SchakelIWD Global Transportation Management

2017

Descartes:

The path to Change

Introduction - Tjalling Schakel

2

Sr. Director Global Transportation Management

Almost 25 Years with Philips

Mostly in Supply Chain.

- Supply Planning

- NPI and Industrial project management

- SCM Factory management

- Divisional role on transport management.

Out of the 25 years lived 9 years abroad, Belgium, UK, Singapore and Poland.

- Area’s of Responsibilities:- Global Transport all modes- Transport budget- TMS Infodis- Lead time management

Change - Managing Chaos

3

How many transport is

coming to me , where is it

What is in the truck which is in front of the door

How to book transport

What is my performance and

leadtime

Where are my documents

Did I not pay that before

How many Carriers do I use

How much do I spend per lane, carrier and site

Change - The way to thinking

4

HOW TO:

1. Transport booking, SAP, WEB or WMS

2. What information do we have and what do we need

3. How to manage carrier connectivity, SAP or Platform

4. Hoe to manage: Key User, Master data, Calls internal external

5. How to on board Carriers and sites

6. Training and instructions

7. IT Department

8. Implementation

Change - Exploring

5

• What is the Market: many many nice stories

• Capabilities: many many different solution

• What is market practice on Platform choice. Independent or 3|4 PL

• How is the carrier market on all modes with TMS

What we need is focus, not everything at the same time

OPERATIONAL PROCESS

Change - The Choice

6

• Choice became Infodis, only on road freight Europe as this was main focus

• Transport ordering out of ERP/WMS

• Carrier Independent Platform

• What is market practice on Platform choice. Independent or 3|4 PL

• How is the carrier market on all modes with TMS

Change - Implementation

7

•Design process, copy as current or new

•Get buy in from the sites

• Setting up the infrastructure

•Built organization

•Money

• First booking, 2 processes

Building - First step

9

Scope of infodis implementation in all flows in Philips healthtech:

Upstream: all shipment and all MOT From suppliers to factories Mainstream: all intercompany flow from Factory to DCDownstream: all flow to customers

Building - First step: capability and connectivity

Capabilities: does it fit or do we co develop | Carrier connectivity: we need to get carriers onboard

End-2-End Transportation process

10

Building - Standardization

15

User / booker

OEM-supplier Philips factorySupplier of parts Philips (R)DC

Key-user

ServiceNow -Helpdesk

Infodis support team

Global Transportation Management- Infodis team -

Issues related to booking shipments in SAP or INFODIS

- Carrier related - Change master data

- New booker request

- Create new booker- Portal related

- System change- Improve functionality

Acquire approval for change request

Qu

est

ion

s /

Issu

es

An

swer

s /

Solu

tio

ns

Approval

-Answer/solution -System change

Answer/solution

Answer/solution

Carrier

Managing - Communication structure: Key User community

Roles & Responsibilities

21

Managing - Roles and Responsibilities

Implementation - The Steps

Phase 4 Pre-billing

- Pre-Billing

- Freight audit

- Invoice control

Phase 3 Cost Allocation

- Cost allocation on SKU level

- Rate evaluation

- Tendering

Phase 2 Operational Visibility on SKU Level

- Visibility on the Delivery lines

- Virtual consolidation & Optimization

- SKU tracking (Delivery lines)

11

Pilot Phase: Operational process

Phase 1: Visibility on Master Level

Phase 3: Cost Allocation

Phase 4: Pre-Billing

Phase 2: Visibility on SKU Level

Phase 1 Operational Visibility on Master level

- Shipment tracking (transport unit)

- Carrier status updates

- Validation operational process

Pilot Phase Operational Process

- Transport bookings

- Carrier EDI connectivity

8

Managing - What did it deliver… sofar

We know:• Whereabout of goods• Exceptions• Documents

Managing performance:• We are getting in control to drive improvement• People get the right focus• Customers satisfaction go up

TMID was the enabler for large saving

But not only money

Managing - Examples

18

World - Global Transportation Hubs (Upstream / Mainstream)

New York (USNYC)

Los Angeles(USLAX)

Panama(PACFZ)

Montevideo (UYMVD)

Tanjung Pelepas (MYTPP)

Shanghai (CNSHA)

Shenzhen (CNSZX)

Budapest (HUBUD)

Warsaw (PLWAW)

Koper(SIKOP)

Colombo(LKCBM)

Rotterdam (NLRTM)

Managing - Examples

Managing - Examples

HANJIN CRISIS.

As soon the news came out Hanjin was in financial trouble,We could with the hour with the help of Infodis, get insight in the impact for Philips.

Initial 200 Containers where impacted.

By knowing what was in de container and where the container was. We were able to mitigate the initial business impact on lost sales to zero within a few weeks

GlobalTransportationManagement

Philips (R)DC

LocalTransportationManagement

CarrierManagement

Supply ChainManagement

TransportManagement

Freight audit Management

Collaborationplatform

RoadCarrier

Philips Factory

Service Now!

Supplier

Pre-bill Team

Sea freightCarrier

Air freightCarrier

InfodisSupport team

Key-userCommunity

F&A

PaymentTeam

OEM Suppliers

Express Courier

Procurement

12

Managing - Infodis collaboration platform

Robert de SchrijverFreight Controller - F&A CoE Operations

2017

Descartes Guest speaker

Introduction - Robert de Schrijver

22

SR FP&A Analyst- Freight Controller @ Philips

Financial Professional @ Yacht

• Project / Cost Controller @ Sabic Petrochemicals Europe

• Analyst @ Philips Consumer Care organization

Management Accountant-controller @ VDL Bus & Coach

University of California – San Diego

Minor Business Management

Fontys - Venlo

International Business Economics

- Finance counterpart of Sr. Director Global Transportation- Finance driver for improvement projects related to freight- Business / Market go-to person for freight related questions- Ensure correct reporting on financial closures- Enable forecasting for freight costs- Responsible for FAP/Prebilling process

Booking Confirmation Transport Receipt Freight Audit & Pay

B. End -2-end Transport Process

A. Master Data Process

C. Process Controls

End-2-End Transportation process

23

3 2015 FP&A CoE Operations Confidential

Freight Audit & Pay - Why Prebilling

Lack of visibility

Philips entities have difficulties judging invoices (rates, add cost etc)

Carriers: Unclear what entity to invoice

F&A: What freight has been invoiced / what hasn’t

Double payments / Over payments

Direct invoice approval Outstanding questions to finance

Freight Audit & Pay – Pre-billing process

Pre bill

RATE

Descartes

/ Infodis

booking

ACTUAL VESSEL DEPT

Invoice

SAP payment

Rate

sheet

PRE BILL SCHEDULE

carrier

Upload

fileTenders

Additional

costs

A.

D.

Payment

Procurement

C.

Back office

Team

B.

System

-Descartes

Origin Inland Haulage

Origin Terminal

Handling

Standard Freight

Charge

Destination Terminal

Handling

Destination Inland

Haulage

standard pre-defined costs

included in 5 buckets as in

the rate sheet:

Dispute procedure

Additional costs

procedure

any non-standard

costs that may occur

during shipment due

to unforeseen

circumstances:

predetermined

costs (demurrage,

detention)

undetermined

costs (i.e

scanning , storage

etc.)

Freight Audit & Pay – Dispute & additional cost

• Any non-standard costs that may occur during shipment due to unforeseen circumstances:

• predetermined costs (demurrage, detention)

• undetermined costs (i.e scanning , storage etc.)

Additional costs incurred

• Additional costs sent to xxx@Philips.com

• IN CORRECT FORMAT on weekly bassis

Additional costs provided

• Additional costs sent for approval of Philips Key Contact Person

• Additional costs added in Infodis after obtaining the approval

Additional costs handled

• Additional costs included in pre bill if approved

• Information provided to carrier in case if additional costs rejected

Additional costs solved

Accrual creationDuring Month end closures, an accrual is created for the following:• Shipments didn’t appear on a prebill, but expected to • Shipments related to current month, put planned after prebill creation date.• Shipments without a rate known at moment of prebillingNO central accruals are made for shipments OUTSIDE Descartes / Infodis!

Freight Audit & Pay – True fact based accruals

Activity managed from an Operational process

• Centralized process• Comparable figures• Accurate and quick

Monthly P&L reportingDuring Month end closures, freight cost are expensed directly against the period they belong:• Shipments occurring in certain period• Any split by Origin, Destination, Freight Payer, Product types etc

Required in order to post the Invoice inSAP to correct Carrier.

To ensure that the Invoice will be posted to the “ Philips Organization”

This will allow Philips to quickly identify the Invoice.

CORRECT INVOICE

PRE BILL NUMBER

PURCHASE ORDER NUMBER

CORRECT INVOICE ADDRESS

Carrier should ALWAYS issue the invoice for the exact amount as is stated on the pre bill.

Standardize information flow for carrier, important invoice characteristics :

Freight Audit & Pay – Invoice control

Business cases

Business case calculations are always

supported by detailed Freight & financial

information.

Freight Audit & Pay – other finance

Forecasting

Automated forecasting by connecting Finance-

Supply chain information.

InsightsPremium freight drivers and leading right

discussion.

Freight Audit & Pay – other finance

Process controls

Process controls

33

Future

Enable self-billingOvercome VAT difficulties

Global deployment

Communication

Direction & Vision

Automation

Key enablers for success !!

Thank you