1. Centralize Transportation Control, A Strategic Movement to Tie Up Your Supply Chain Eddy Wong SCM Product Manager March, 2008.

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Centralize Transportation Control, A Strategic Movement to Tie Up Your Supply Chain

Eddy Wong

SCM Product Manager

March, 2008

March, 2008

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The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment

to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions.

The development, release, and timing of any features or functionality described for Oracle’s products remains at the

sole discretion of Oracle.

SOX DISCLAIMER

• Transportation, a Vital Link of Supply Chain

• Management Focus on Enterprise Logistics

• Oracle Transportation Management Solution

• Case Study: Electrolux and GE Healthcare

Agenda

Today’s Supply Chains are Complex

Outbound Transportation

Order Management

Trade Logistics

CarriersCustomers

Inbound Transportation

Suppliers

Manufacturing and Distribution

Design Plan Source Make Move Sell Service

Supply DemandProducts

…And Networked

Outbound TransportationOrder Management

Trade Logistics

CarriersCustomers

Inbound Transportation

SuppliersManufacturing and Distribution

Supply DemandProducts

Design Plan Source Make Move Sell Service

Outbound Transportation

Order Management

Trade Logistics

CarriersCustomers

Inbound Transportation

SuppliersManufacturing and

Distribution

Outbound Transportation

Order Management

Trade Logistics

CarriersCustomers

Inbound Transportation

SuppliersManufacturing and

Distribution

Trading Partners

Networked across the dimensions of..

Geography Business Entity Capability

Transportation is the physical network and backbone of Your Supply Chain

$$CustomerDC

Factory

Supplier

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Shipper

TradingPartners

TransportationProviders

Carriers 3PLs Customs Brokers

Contract MfgrsSuppliers

Forwarders

• Lack of unified logistics process control and visibility

• Long planning cycles with decisions based on outdated data

• Paper and time intensive processes

• Poor use of automation for exception recognition and resolution

Customers

Manual Processes

Fragmented Organizations

Planning Execution

How Transportation was Managed in the Past

What’s Today’s Mandate

Warehousing& Storage

Carriers

Customers

Shippers

Consolidators

Cargo HandlersLogistics Service Providers

Freight Forwarders

Top Pressures for Transportation

35%

35%

44%

45%

61%

61%

63%

0% 25% 50% 75%

Required to support my firm's market expansion or acquisitionplans

Increasing complexity and lengthening of inbound supply chain

Need to reduce inventory outages/stockouts to remain competitive

Tightening freight capacity and increasing accessorial costs

Market pressure to reduce total delivered cost

Customer demands for shorter cycle times, more frequentdeliveries, and delivery perfection

Increased internal and customer demand for accurate deliverystatus and cost information

% of Respondents Rating Very or Extremely Influential

Source: Aberdeen Group, 2004

Customer-centric pressures

Changing supply chain pressures

Management Focus on Enterprise Logistics

Enterprise Logistics

Enterprise Logistics

Improve Customer

Satisfaction

Global Standardization and Compliance

Reduce Logistics Cost

Global Transport Visibility

Global Inventory Visibility

Proactive Service

Optimize Transport

Mode

Global Centralization

Improve Transpo

rt Plannin

g

Freight Settlement and Audit

Transport Service Provider Integration and Mgmt

Global Centralization

Freight Settlement

Transport Planning &

Optimization

Global Logistics Visibility

Supply Chain Event Mgmt

Order to Execution

Business Intelligence

Transport Service Provider

Mgmt

• Over 45 customers using installations of the same product for leading:

• Logistics Service Providers

• Manufacturers• Retailers

G-Log

• Provider of Logistics Software

• Single Transportation Product

• 180 staff globally

• 48 Research & Development

• 55 in EMEA & AsiaPac

November 2005 Bought By

19 of the world's leading logistics providersrun Oracle Transportation Management

OTM Customers in Other Industries

Industry Customer

Auto Parts Gates Corporation,

Beverage / Food Niagara Bottling, Canadian Wheat Board, Dairy Crest, Land-O-Lakes, Smucker’s,

Construction Material Hanson Building Products, TTI

Chemical GE Oil and Gas, Halliburton

Home Appliance /

Durable Goods

Fagor, OFS / Styline, Electrolux

Healthcare / Cosmetics Genzyme, Beckman Industries, Alticor, GE Healthcare, Haemonetics

High-tech / Computer Arrow Electronics, EMC, NEC Australia; Leviton

Industry Manufacturing (non-automotive)

Parker Hannifin, Sukhoi Civil Aircraft, Mercury Marine, Minerals Technologies (MTI), Case New Holland, Greif, US Steel, Ingersoll Rand, Macsteel Service Centers

Retail/Consumer Goods Circuit City, ICA, Starbucks, US Navy Exchange, Office Depot, Americanas.com

Office Products / Paper ACCO Brands, UPM, Baillie Lumber Company, Baillie Lumber Company, Smurfit-Stone Container Corp

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Execute Locally… • Using multiple languages and currencies- English, Spanish, German, French, Chinese (simplified)- Support for all currencies, including in-system conversions- Screen customization by region / country, user groups

• Accommodate region-specific rules and regulations

Control Globally… • All inbound POs and outbound customer deliveries

• Transfers between facilities, in different countries- Distribution centers – mfg - Intermediary nodes

• Visibility into in-transit & at-rest inv. throughout network

Manage Centrally… • All operational information in one location- Increase leverage for procurement- Apply best practices across regions

• Cleanse data to achieve single source of truth• IT infrastructure to reduce support and maintenance costs

- Evaluate processes holistically- Perform network analysis

Manage All Your Transportation Needs in One System

Service Providers Trading PartnersInternal Systems

Transportation Management

OrderMgmt

Warehouse & Inv Mgmt

Financials

• Tender Offer• Tender

Response• Ship Status• Invoice

• Planned Shipment• Order Status• ASN• Order / Release

Information

100% Web-Based Highly Configurable Global Business Support

• Orders• Product

Location• Item Master

• Planned Shipment

• Confirmed Shipment

• Payment Vouchers

• Invoice Check and Match

Continuous Planning

Event Management

CarrierAnalysis

On-TimePerformance

CustomerSatisfaction

Oracle Transportation ManagementOpen and Scalable

Consolidate Loads / Moves

SelectModes & Carriers

Book /Tende

r

Track &Trace

Audit / Settle

High PerformanceTransportationOptimization

Global TransportationCollaborationand Execution

Logistics Automationwith ExceptionManagement

Complete LogisticsNetwork Visibility

Global, Local, andCentral Logistics

Management

Oracle Transportation ManagementProvides…

Advanced analytics and reporting via multi-tenant configuration and security, graphically UIs with

KPIs and access to drill-down details

Configurable BPA and event mgmt for order processing and exception handling, automated

corrective actions, alerts via UI or mobile devices

Multi-mode, multi-leg, multi-tier shipment planning and optimization; integrated fleet planning and carrier bid optimization for services sourcing

Seamless customer-to-carrier transportation execution flows, automated payments &

settlements, transaction-centric global collaboration

In-depth Visibility Gives You Full Control of Your Logistics Network

Track & Trace

Inquiry

Exceptions

Business Monitors

• By PO

• By Shipment

• Vessel/Voyage Schedule

• Carrier Rates

• Container Manifest

• Pre/post Advice

• PO Exceptions

• Shipment Exceptions

• Invoice Exceptions

• Exception Reports

• New PO Release

• New Shipments

• Self-defined Object

Reports

• Volume Reports

• KPI Reports

• Inbound PO Report

What’s the execution

status of my orders?

I would like to know every

details of my shipment

Focus on exceptions

Insight on

business performance

My to-do-list/monitor list

Intuitive Track and Trace User Interface

Transportation Intelligence Provides Business Insights

Fusion Transportation

Intelligence

Carrier KPIs & ScorecardGives You an Advantage for Rate Negotiation

- Container and trailer optimization & configuration- Shipment assignment, stringing & continuous moves- Fleet sizing & assignment (execution, strategic)

- International shipping- Facility resource balancing- Bid collaboration and optimization

Support a Wide Range of Optimization Needs

• Route

• ModeOptimizedDecisions

• Timing

• Equipment

• Multi-Leg Multi-Mode Consolidation

• Common Leg Consolidation

• Multi Stop Consolidation

• Multi-Tier Networks

• LTL Consolidation

• Continuous Moves

Algorithms

• Consolidation

• Service Provider

Engines& Rules

• Service Time Calculation

• Container Optimization

• Itineraries & Profiles

• Resource Capacity

• Throughput

• Rating

Planning & Optimization Engine Maximizes Fulfillment Service, Minimizes Transportation Costs

• Consolidation• Labelling, Inspection, etc.

• Customs • Tax• etc.

• Invoice 2,089 Kg

2 Truckloads

Item-level Cost Allocation Engine Makes Your

Sourcing Decision Easier

2 Truckloads

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OEM Plant Dealer 1

Order: 1 VIN

Dealer 1

Dealer 2

(Yokohama) (Los Angeles)OEMPlant

PortPort PortPort

Alert! … Delayed in customs

Automated Action …Split shipment of vehicles

Alert! … Dealer msg “Partial Ship”

Automated Action … 1) Order and routing change2) Expedite replenishment order

• Receive Proactive Notifications and Rapidly Adjust to Unforeseen Delays

• Utilize Event Management to Trigger Automated “Corrective Action” Flows

A Simple Order…

…Really Looks Like This

Proactive Event Management Allows You Faster Response to Exceptions

Electrolux Group Transportation Management System Solution

No.1No. 3

No. 2-3

Market position core appliances

No.1

No.1No. 4

No.1

Market position floor care

No.1

40 million products per year

56,800 in 60 countries

Sales SEK 100.1bn Op income SEK 3.9bn Sales in more than

150 countries A world leader in appliances

Electrolux key facts

And Yearly…….

The company has a huge worldwide logistics operations to support this volume

of movement. Global Freight and Logistic Services in Electrolux is responsible

for procuring all intercontinental freight which includes air freight, sea freight,

express/courier services, freight forwarding services, and container haulage for

Electrolux Group.

And yearly

• ship some 50 000 containers (75 000 TEU) worldwide

• Airfreight 12000 tons

• US has 33000 FTL’s and 21000 LTL’s

• Europe has 36000 trucks and 19000 rail wagons

• Annual Transportation Spend: > €500M

and we serve

• 3000+ Ocean freight lanes

• 100+ countries

Global Transportation Challenge and Issues

Within and across the geography only fragmented systems to manage transportation and due the strategic decision on low-cost country sourcing strategy and new distribution dynamics, there are increased needs for:• Coordination of shipments from different regions and locations• Coordination of purchasing of transports.

And also there are the following issues:• no possibility to control, track & trace transportation activities and supply.• transportation planning and execution is manual or controlled by suppliers• sub-processes are today outsourced to numerous 3PL partners. This results in higher cost and less

control capabilities• lack visibility of the logistics activity in the Group

Project set-up and timing

The project are divided into three phases and Oracle consulting

service was selected as implementation partner for first implementation.

Wave 1, 2006/9 – 2007/12 –Global Ocean and Air freight (2006/9 – 2008/06)

–US Outbound (truck) (2006/11 – 2008/06)

Wave 2, 2007/8 – 2008/12

–Europe Inbound (truck and rail)

Wave 3, 2008/1 – 2009/12

–Europe Outbound (truck and rail)

Three sub-project is now running simultaneously:

–US, Domestic outbound flow (All RDC’s running), first factory in November 2007

–Global Ocean & Air freight (first flow went live May, continue roll-out until Q2 2008)

–Inbound Logistics Domestic Europe ( first flow live December 2007)

Global Air Freight Transportation Solution for Electrolux

Oracle’s OTM

*One Global Domain

Suppliers

In China

LSPs

Request for Pick-up

Planned Shipmentw/ OTM Shipment Id

Tender Offer via EDI or Portal

Tender Response via EDI or Portal

Invoice w/ OTM Shipment Id

Payment

Advisew/ OTM

Shipment Id

Planned Shipment

w/ OTM Shipment ID

Master Data Interfaces

Item Master

Location Master

Freight PaymentPayment made when Invoice matches Planned

Shipment, unless Routing Guide Shipment

Delive

ry T

rack&

Trace

Factories

In Europe

GE Healthcare

Molecular Diagnostics

Information Technology

Pharmaceutical Solutions

Imaging and Intervention

• Design, manufacture, sell, and service medical equipment

• Global organization with distributed supply chain

Need for a Transportation Management System

Business Problem System Requirement

Solution

•Implement Oracle Transportation Management System to enable shipment planning, execution, and freight monitoring across multiple modes, borders and enterprises.

•Synchronize the critical transportation and distribution business processes, resulting in optimal cost and service performance

•Frequent use of premium transportation methods

•Cost Control•Constraint-based ship method selection

•Shipments lost in vast vertical supply chain

•Visibility•Track & Trace of

inbound & outbound

•Lack of visibility to contract rate leakage

•Analysis• Planned vs. Actual cost• Trend analysis

•No capability to tie expected rate and actual invoice

•Audit•Freight audit & AP

integration

High Level Project Scope

•Greatest source of premium transportation cost

•Pilot in China, France, US •600 to 1,000 orders per year/site

•Implement on single Oracle Instance in one P&L

•Enable Advanced Product Catalog in Oracle for standards

•Primarily Domestic Shipments •Pilot with top 10 suppliers •Integration with Supplier Extranet

• Touching customer and sites directly• Specialized Carriers (van’s & installers)

Phase 1

Internal to Internal

Supplier to Internal

Internal to Customer

Mfg. Mfg.

Mfg.Distributi

on

Distribution

Customers

External Suppliers

Distribution

External Suppliers

Mfg.

Phase 2

Phase 3

Phase 1 Benefits

Expedited air reduction

Benefit

Use preferred carriers with

Negotiated rates

Increase consolidation

opportunities for ocean shipments

Goal

95% reduction in expedited air

shipments

Initial Results

99%

TBD

Selection of least expensive ship method to meet

delivery date

95% of recommended ship method accepted

15 – 20% reduction in per

kilogram cost

Optimize ship method of

small & medium packages

10% of opportunities, but

now have the visibility

Eliminate

100% Compliance

Maximize Container

99% Acceptance

100% Preferred

Overall

OM and OTM Integrated Process

Oracle OM

OracleTM

Sales Order

Created

Shipment Method

•Best Ship Method based on source, destination, need date and cargo weight and dimension.

•Freight Cost Visibility

• Carrier/FF Early Notification

• Enable Deferred Air, Ocean

Shipment Plan Email

Pick Releas

e

ePack

Ship Confirm

FF/Carrier

• Shipment Notification

… Pick Up

• ePack Cost/Plan

• Airway Bill

• Tie Shipment to Bill

• Spend Visibility

Pick-up notificationemail

Shipment

Benefits

Standard Weights & DimensionsFF/Carrier

RatesItinerary

Actual Weights& Dimensions

AirwayBill

Shipment Tracker Report

• Flag Shipments Outside Defaults.

• Alert High Cost Shipments.

• Identify Cost Difference and Alternatives.

•Consolidation Opportunities

•Enable Action

Order Details

Oracle Org and

APC

Shipment Planning Shipment Execution

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