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Martin Etlis BDM, Post, Express & LogisticsEurope, Middle East & AfricaOracle Corporation
Jasper van SchelvenSales ConsultantDCS Transport and Logistics Solutions
The Transformation of Logistics Companies:
Oracle's & DCS’ SCM & eFulfillment solution
Agenda
Market trends: Why is the transformation necessary?
IT enables the transformation Case studies
General trends in the Logistics market
Cost reduction– Need to improve margins
Low levels of differentiation (traditional services) Low margins (traditional services)
A to B transport, Warehousing– Shippers focus on cost reduction
Shipper’s primary focus tends to be cost not performance (throughput)
Shippers are inexperienced in contracting advanced logistics services
– Low levels of automation and integration Processes and Technology
Consolidation– High level of fragmentation in all segments– Customers require global capabilities– Comprehensive logistics services requires economies of scale
Source: Seventh annual study on Third Party Logistics 2002 by Georgia Institute of technology, Ryder Systems and Cap Gemini Ernst & Young.
General trends in the Logistics market Globalisation
– Customers (shippers)– Competition between global players (DHL vs UPS)– Mergers & Acquisitions into larger entities (across segments) to
create economies of scale
Extended customer service– In order to differentiate from competitors
Demand for high level services– Taking over customer’s logistics operations– Integration with customer’s business processes– Shippers are Centralizing and Outsourcing Logistics Operations
Larger portion of shipper’s logistics operations are being outsourced to LSPs
– Integration into Customer’s (shipper’s) & supplier’s Value Chains Increased need for collaboration capabilities From Supply Chain to Supply Network
Source: Seventh annual study on Third Party Logistics 2002 by Georgia Institute of technology, Ryder Systems and Cap Gemini Ernst & Young.
General trends in the Logistics market
Time to Market of logistic services (Shippers demand a faster T2M of 3PL/4PL)
– Implementation of outsourcing contract lengthy and costly Necessary resources demands long contracts
Contracts based on Service Level Agreements– Complex contract structures for comprehensive logistics services
IT enables the transformation into added value service providers– High reliance on bespoke systems– Best of breed strategies
Multiple vendors and complex IT infrastructure with high integration costs
– Replacement of Legacy Systems Legacy systems are becoming obsolete, trend is to replace with
standard packages
Source: Seventh annual study on Third Party Logistics 2002 by Georgia Institute of technology, Ryder Systems and Cap Gemini Ernst & Young.
Logistics Drivers
Global PromisingIncreased Velocity/Visibility
Global PromisingIncreased Velocity/Visibility
CustomerExpectations
CustomerExpectations
Internet Selling/Higher VolumeMass CustomizationInternet Selling/Higher VolumeMass Customization
VariableDemandVariableDemand
Increased CompetitionCommoditizationIncreased CompetitionCommoditization
MarginPressureMargin
Pressure
Product ProliferationGlobal Supply & Demand
Product ProliferationGlobal Supply & Demand
IncreasedComplexityIncreased
Complexity
Lower CostReduce Inventory and Carrying Costs
Streamline Movement and Storage Operations
Lower CostReduce Inventory and Carrying Costs
Streamline Movement and Storage Operations
Seamless IntegrationProvide Real-Time Information Access
Integrated Planning and Execution
Seamless IntegrationProvide Real-Time Information Access
Integrated Planning and Execution
Improve Customer SatisfactionIncrease Delivery Promise Accuracy
Provide Real-Time Delivery Adjustments
Improve Customer SatisfactionIncrease Delivery Promise Accuracy
Provide Real-Time Delivery Adjustments
Logistics Goals
Logistics Opportunities
On-Time DeliveriesOn-Time Deliveries 10-10-20%20%
Improved Capacity UtilizationImproved Capacity Utilization 5-10%5-10%
Lilly, Intermec, eSync, Tompkins, Meta Group, Telia NetworksLilly, Intermec, eSync, Tompkins, Meta Group, Telia Networks
Warehouse Labor HoursWarehouse Labor Hours 10-10-30%30%
Direct Transportation Spend Direct Transportation Spend 5-25%5-25%
Total Inventory Total Inventory 5%5%
Shipping ErrorsShipping Errors 80-100%80-100%
Traditional Logistics
Your Company Carriers CustomerWarehouses
ExecutionPlanning
Expediting andMissed Shipmentsx
Multiple,Non-Integrated
Systems
Manual Processes
Logistics Value ChainMRP
Adv Planning & Scheduling
Supply Chain Planning
Demand Planning
Distribution OrderManagment
Supply ChainSupplier Procurement Production Distribution Customer
Warehouse Management
YardManagement
FreightForwarding
TransportManagement
Supply Chain Execution
Supply Chain Managment
The need for Agility in the Supply Chain
Manufacturers need the ability to provide customized products with economies of scale To achieve this you
need:• Co-development• Modularization• Sequencing centres• Postponement• Collaboration
A happycustomer
Logistics plays a vital role to
getting:
The “new” role of the Logistics Service Provider
Source DestinationStorage
OutboundInbound
Supply Chain Conductor
Source DestinationStorage
OutboundInbound
Moving up the value chain!
A Better WayA Better Way
Oracle: Complete E-Business Suite
ProcureProcureProcureProcure
ManufactureManufactureManufactureManufacture
Service /Service / Maintain MaintainService /Service /
Maintain Maintain
DevelopDevelopDevelopDevelop
FulfillFulfillFulfillFulfill
PlanPlanPlanPlan
MarketMarket
SellSell
FinanceFinance
Human ResourcesHuman Resources
ProjectsProjects
Global Customers
CustomerCustomerSatisfactionSatisfaction
Continuous ImprovementContinuous
ImprovementCarrierCarrierAnalysisAnalysis
On-TimeOn-TimePerformancePerformance
Integrated Planning & Execution
PlanPlan Book /Tender Book /Tender
Pick,Pack,Ship
Pick,Pack,Ship
TrackTrack Replan Replan Rate Rate Settle Settle
Carriers / 3PLs
Collaboration
InboundSupplySource
OutboundDemandDestination
Oracle & DCS Logistics Solution
Oracle & DCS Logistics SolutionDimensional Considerations
Dynamic
Operational
Tactical
Strategic
Dynamic
Operational
Tactical
Strategic
TimeTime
Facility
Local Area
Domestic
International
Facility
Local Area
Domestic
International
PlacePlace
Truck
Rail
Air
Ocean
Truck
Rail
Air
Ocean
ModeMode
Outbound
Inbound
Intra-Org.
Returns
Outbound
Inbound
Intra-Org.
Returns
FunctionFunction
Oracle & DCS Logistics Solution
Enables you to:
Integrate Planning and Execution
Collaborate With All Trading Partners
Streamline Global Shipments
Drive Continuous Improvement
Integrate Planning and Execution Seamless Flow of Information
Warehouse Management
Minutes Hours/Days Weeks/Months Quarters Years
Network Design
Supply & DemandPlanning
Transportation Planning
Transportation Execution
Event Management
Strategic
Operational
e.g. Distribution Network
e.g. Planned Shipments
e.g. Performance
e.g. Shipment Schedule
e.g. Actual Shipments
e.g. Load Plans
e.g. Shipment Exceptions
e.g. Delivery Confirmation
e.g. Load Confirmation
e.g. Dock Scheduling
Minimize Inventory Provide Single, Consolidated View of All Inventory
Provide inventory visibility– In-transit inventory– At trading partners
Enable postponement– Optimize inventory location
(manufacturing, distribution centers, central warehouses)
Plan for demand and supply variability
Warehouse
In-Transit
WIP / Planned
Production
ConsolidatedInventory
Status
Maximize Service Levels Improve Customer Satisfaction
More Accurate Promise Dates– Promise orders based on material availability, supplier,
manufacturing and transportation capacity– Allocate supply & capacity by channel, customer or product– Enable Capable to Deliver
Increase Delivery Efficiency– Minimize expediting charges– Eliminate manual transfer processes– Improve warehouse pick and carrier delivery accuracy
Proactively Respond to Exceptions
Optimize Asset Usage Leverage All Assets to Reduce Operating Costs
People
Warehouse Space Vehicles
Capital
What percentage of shipments are delivered on-time?
How to increase customer service levels?
What the average cost per shipment is?
How to expedite fewer shipments?
What carriers are providing the best service?
– Objective: Set corporate and personal targets – Fact: Provide performance-based metrics– Exception: Continuously evaluate performance
– Objective: Set corporate and personal targets – Fact: Provide performance-based metrics– Exception: Continuously evaluate performance
Manage By…
…For Better Decision Making
Daily Business IntelligenceDrive Continuous Process Improvement
Drive Continuous Improvement Improve Performance Through Integrated Intelligence
EstablishEstablishTargetsTargets
PerformPerformTransactionsTransactions
MeasureMeasureResultsResults
Out ofOut ofToleranceToleranceNotificationsNotificationsAdjust PlanAdjust Plan
ExceptionsExceptionsLogistics
Plan
Oracle Logistics Solution
Integrate Planning and ExecutionIntegrated supply, demand, and transportation planning withtransportation and warehouse execution
Collaborate with All Trading PartnersReal-time information sharing, event management
Streamline Global ShipmentsSingle global instance, international trade management
Drive Continuous ImprovementIntegrated performance measurement and analysis
• Define all characteristics of the distribution network• Specify details such as lanes, distribution centers, etc.
• Supply and demand planning across network• Transportation planning including load planning,
mode/carrier optimization, load configuration
• Freight rating, automated mode/carrier selection• Load tendering, shipment pickup requests• Global track and trace, settlement
• Automated, tailorable warehouse functions (e.g. pick, pack)• RF barcoding support• Advanced inventory management capabilities
• Monitor shipments• Handle exceptions and notify all trading partners
NetworkDesign
Supply ChainPlanning
TransportationExecution
WarehouseManagement
EventManagement
Oracle Logistics SolutionKey Capabilities
Oracle’s & DCS’ Value Proposition
CustomDeveloped
P S FTH R M S Custom
DevelopedI2
CustomDeveloped
Ariba
SAPFIN
Busobjects
9iWeb-sphere
Mercator
G -log
Procurem ent
HRM S
FINAPPS
9i + 9 iAS
DCS TMS
O M + SC M + APS
Which one would you chose?
UPS enables global commerce through the use of Oracle e-Business Suite
"The E-Business Suite allows us to do the types of things I just talked about [enabling global commerce]. It transparently takes orders and puts them into fulfillment, replaces them from inventory and moves them through shipping, and touches the accounts-receivable lines and the financial lines. It's an awfully powerful thing that really transforms our customers' businesses and our business. Between what, together, we do, those kinds of alliances like we've made with Oracle have been big wins for our customers."
Mike Eskew, CEO, United Parcel ServiceInterview in Profit Magazine
APL Logistics chooses first class IT solutions for world class excellence“Our selection of DCS followed a rigorous evaluation process during
which time we found that the core attributes of both DCS and their product, DCSi.Logistics, exactly matched exactly the requirements of APLL.”
“We are committed to develop developing long termlong-term relationships with our customers and suppliers, and we are of the firm opinion that by linking up with DCS, we can achieve a partnership that will benefit both our organisations.
In today’s global economy, we require first class IT solutions which together with our logistics professionals, allow APLL to offer proven solutions that provide world class operational excellence to manage the supply chain.”
Ian Robinson, Director of Technology and Implementation Services, APL Logistics
Kühne and Nagel – Streamlining Scania’s transatlantic supply chain Belgium DC managing and receiving European deliveries from
450 suppliers ANR and BRU hub to Brazil and Argentina
“For Scania, we have provided a stable and reliable system, with the lead time reduced dramatically and errors down almost zero. For KN DCSi.Logistics gave us easy handling, fast stock overview and simple EDI exchange with the customer.
The major benefits were error-free pallet handling, no paperwork in the warehouse, and complete visibility of the goods at every stage.”
Mr. Udo Bauersachs, Worldwide IT vice president for KN Contract Logistics
Moving up the value chain
Maersk Logistics for Lego
TMS Operation Lego Delivery Chain
Cost reduction through job costing visibility
Value add through KPI monitoring
Carrier selection and monitoring
DHL Danzas for IBM
Decentral to Central Spare Parts Ops
AMS EMEA DC Dramatic increase of volume Retain and improve Service
Levels Reduce overall transaction
costs Carrier selection and
monitoring
Moving up the value chain
De Rijke for the chemical industry
TMS and WMS operation turning into SCM operation
Carrier selection and management
Resource management Adding value by
managing costs and offering visibility
Noy Logistics for HD
tapestria.com: shortening the fabrics supply chain
EDI for speed and accuracy
Value added WMS ops UPS deliveries for
speed
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