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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
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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.
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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
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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)
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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
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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
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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
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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
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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
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Land Transport: Flexibility in Order Creation
Order Entry via Templates
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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
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Land Transport: Flexibility in Shipment Planning
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
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Land Transport: Flexibility in Shipment Planning
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
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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
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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
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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
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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
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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
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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
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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
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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
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* 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
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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
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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
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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
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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
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All 20GP need approval All 20GP need approval
Shipment Collaboration
After Reviewing shipment APL Logistics’ operations inputs Shipping Instruction before triggering “Request For Approval”
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Shipment Collaboration – Approval Work Queue
Approval workflow
Approval actions
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Shipment Collaboration –History of Shipping Instructions and Actions
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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.
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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
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