transportation management systems: trends and roi

Transportation

Management

Systems:

Trends and ROI

NITL Conference

November 11, 2004

Jane Biddle

The Headlines…

Issues and Opportunities Creating Sense of Urgency!

Behind the Headlines…

30,000 Intermediaries Around the Globe: Point systems have evolved over time Reliant on paper, faxes, phone calls

• Many ‘opportunities for failure’

Change Being Driven From Top Down: Corporate leadership strategies Increased focus on supply chain execution Internet-based & more affordable solutions

Challenge: Leverage TMS Trends and Technology To Accelerate

Supply Chain Performance.

A Vision for TMS Leadership

Supplier

Contract Manufacturer Alert

Notifications

Customs Status

Stock Levels Shipment

Status

RemoteFacility

OrderStatus

OrderStatus

OrderStatus

OrderStatus

OrderStatus

Retail

Customer HQ

Customer DC

Stock Levels

ShipmentStatus

ShipmentStatus

Command and

ControlAlert

Notifications

Agenda

A Vision for TMS Leadership Application Landscape Enabling Corporate Strategy Value Proposition

Total Worldwide Trade $12.6T(WTO/2002)

Landscape – Industry Perspective

Total Worldwide Logistics Costs $1.5T (Cass/2002)

Customs Clearance Cost

$150B (Stephens/2003)

Supply Chain Management $6.7B by 2008 – CAGR 5%

(AMR 2004)

Financial Settlement

$2.6T+ $640B (@Global

Trade)

Cost of U.S. Trade Security

Improvements

$83B (ARC)Cost of U.S. Compliance

Systems$15B

(Stephens/2003)

Transportation Management

Systems $1.2B by 2008 (ARC 2004)

Logistics Visibility & Control $500M

by 2008, 29% CAGR (ARC 2004)

Plan Make Source Deliver

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Application Landscape: High Level

ERP

TMS/GTM

ERP

SRM

Supply Chain Planning

Production PlanningInventory ControlGood Mfg PracticesQuality Reporting

SourcingCatalogHTSExport

BPM & Finance

MESWIP Op InstSCADALabor Mgmt

Application Landscape: Detailed

CADFormulation

RFQ/QuoteVendor MgtPurchasing

Track & Trace

Trade ContentRegulationsContract MgmtTruck/RailAir/Ocean

CRM

Import/ExportDomesticInternationalContract PriceBook/Tender

Supply Chain Inventory

Forecasting Demand Planning ATPPlanning Optimization CPFR

PLM

CAMPlant Maint

Network Design

Business Rules Event Mgmt

CustomerService

FinancialSettlement

Total Landed

Cost

Supply ChainNetwork

CSI/CustomsDoor Delivery

FulfillmentDC Delivery

Demand MgmtOrder Mgmt

TMS: Platform or Application?

Option #1: Platform (Are Shippers Ready?) Business unit optimization –> SC optimization

Departmental optimization –> Enterprise optimization

Standardization - data, processes, metrics

Option #2: Application (Are Vendors Ready?) ERP/SCM vendors moving ‘out and down’

TMS players moving ‘up and across’

3PLs, Forwarders adopting Technology

Convergence Is On The Horizon-

Leverage IT Investments

"If you have built castles in the air, your work need not be lost. That is where they should be.

Now put the foundation under them."

- Henry David Thoreau

Packaged Applications

ERP

SCP 4PLs

Domestic TMS

Global Visibility

WMS Compliance

SAPSSAPeopleSoftOracle

Manhattan HighJump (3M)Optum/Metasys

ManugisticsI2CAPS (SSA)

G-LogRedPrairieDescartes

BridgePointLogNetGT Nexus Vastera

NextLinxOpenHarbor

UPSFedExDHL

Checklist Considerations

Corporate Compatibility vs. Best of Breed

Single Data Model AND Local Configurability

Multi-Multi-Multi

Product Road Map

Purchase vs. On Demand

Technology Integration Strategy:Trade data and compliance reporting

Supply chain inventory and assets

Settlement and financial systems

Role of 3PL Information Systems

Agenda

A Vision for TMS Leadership Application Landscape Enabling Corporate Strategy Value Proposition

Corporate Leadership Strategies

Lean Enterprise/Supply Chain

Customer Driven Supply Network

Competitive Advantage Price

Quality

Service

Even The Best Strategy Will Not Succeed Without The Ability to Execute!

Enable Corporate Strategy

Be an Agent for Change:• Go where the action is - gain insight and support

• Recruit Colleagues and ‘The Brass’

• Political Campaign of your Career?

Develop Business Case:• Tangible: ‘Top Line’ and ‘Bottom Line’

• Intangible: Opportunity to ‘Break Through’

• Risk of Status Quo

Name It – Brand It – Launch It Establish Metrics & Reward Success

Your Reality – Déjà Vu?

“Perhaps in time the so-called Dark Ages will be thought of as including our own.”

Georg Christoph Lictenberg (1742 - 1799)

Circa 1990mrp -> ERP

Circa 2004tms -> TMS

Break Down The Barriers

PurchasingSourcing

ImportCompliance

SalesService

ExportCustoms

FinanceRegulatory

TrafficDepartments

HTSDenied Parties

Match & Pay

Purchase Order

Bills of Lading

Commercial Invoice

Import Documentation

New Workflows Information Standards Centralized Planning

Collaborative Execution Measurement Performance Extending Integration

Set Standards for Integration

ERP ERP

Play a Leadership Role!

Think Globally, Act Locally

Establish Metrics Enterprise

Supply Chain Partners

Centralize PlanningInbound/Outbound

All RegionsAll Modes

Global Tiger Team: Education

Tiger Teams: OperationsSystems Reporting

Tiger Teams:Operations

SystemsReporting

Agenda

A Vision for TMS Leadership Application Landscape Enabling Corporate Strategy Value Proposition

AMR Value Proposition

“Companies that have connected their partners through collaborative execution practices have seen the following benefits:

Increase in the fill rate by 10% Cost reduction of 5% (of revenue) Reduced planning & execution cycle time by 15% Reduction in inventory by 50% in a year Inventory obsolescence reduction by 80%”

“Connecting Collaborative Planning to Execution for Results”AMR Vinay Asgekar, July 30, 2003

Start With ’Quick Wins’

Automate Ordering/Pricing Processes Provide On-Line Visibility Eliminate Paper Handling Integrate TMS with ERP/Finance Link TMS to Compliance Systems Others?

Establish Key Metrics

Customer Satisfaction• Order Accuracy

• Order/Invoice Cycle Time

• Performance

Inventory• Days of Supply

• Carrying Costs

• Warehousing Costs

Transportation• Carrier Performance

• Asset Utilization

• Inbound/Outbound

Compliance• Document Management

• Reporting

• Audits

Collaboration• Global Visibility

• EDI Connections

Technology Expectations

Today - Visibility Cost Savings Operational Efficiencies Reduced Risk of Non-Compliance Improved Customer Satisfaction

Tomorrow – Full Transparency Increased Reliability Improved Flexibility Global Dashboards Competitive Advantage

Jane BiddleChatham, New Jersey973-701-2557

www.biddleassociates.comjane@biddleassociates.com