How can LSPs maximize ROI from their OTM Application A ...

© Mahindra Satyam 2011

Sudheer Pamighantam

Practice Head – Logistics

Mahindra Satyam

How can LSPs maximize ROI from their OTM

Application – A radical perspective

June 5, 2012


Introduction

3


Objectives of a OTM program are many…

1. Leverage OTM as growth driver with new / integrated services & help

create differentiators in the market

2. Reduce logistics cost while meeting the service levels

3. Automate manual logistics processes and define exception

management processes

4. Provide visibility to all stakeholders and downstream processes

5. Analytics to measure, monitor and make improvements

6. Rationalize the number of logistics applications impacting the cost

of maintenance

7. Prevent spend leakages – carrier selection & freight audit

8. Manage inbound logistics – Supplier collaboration, PO management

9. Ability to support complex programs like cross-dock, pools etc

10. Manage own, dedicated fleet as well as common carriers in one

application and others…

4


Some LSPs are able to use OTM only in a limited way..

1. LSP whose configuration / use has not changed much

since v4.0

2. LSP who uses 3 TMS systems for different lines of

businesses. Same activities like tendering to same carrier,

event management, carrier payment and different visibility

applications

While the limited functionality be meeting their original objective,

OTM could provide more benefits!

5


Then there are few others who get the best OTM has to offer…

A LSP who leverages OTM

Soup to nuts from order management to

printing customer bills from OTM

For multiple LoBs

In multiple countries

In a single instance

Without any customization / extension

ENTERPRISE

APPLICATIONS

Finance &

Accounts

Sales &

Customer Service

OTM

End to End Oracle Implementation

Planning & Scheduling

Load Configuration

Dock & Appointment Scheduling

Inventory Visibility

Rail

Ocean

Tru

ck

Air

Inte

r-Mo

dal

SCEM/ Global Visibility

BI and Analytics and Reports

Sourcing , booking & Tendering

Forwarding & Brokerage Operations

Freight Payment, Billing & Claims

Human Resources

Fusion Middleware (BPEL, SOA, ADF)

OTM

Air Freight Sea Freight Contract Logistics Transborder Domestic

Brokerage

Host Systems

Orders

Buy Shipments

Tender to Carrier

Sell Shipments

Invoices

Bills

Legacy

Financial System

Air Ocean WMS2

Customer Specific rules

Order Constraints, Weight / Volume / Delivery Window /

equipment

Carrier Constraints

Internal Sell

External Customer Sell

EDI - Auto Match & Auto Approve

WMS1

OTM Invoice

Standalone Bill

Consolidated Bill

Inter-Country

XML EDI Email Fax

Direct

A LSP is leveraging OTM as part of Quote to

Cash cycle

For multiple LoBs – Asset and non-asset

Non-asset leverages planning

Asset leverages more in execution

Common services – order management,

visibility &freight audit

Integrated to CRM, ERP

Working with mobile device in truck

In multiple countries

In a single instance


Leveraging OTM for LSP business growth

7


Shipper

Transportation

Freight Forward

Companies

Shipper Logistics

Strategy

Traditional 3PL Lead Logistics /

MTS

Integrated + Supply

Chain Services

Business

Strategy

Str

ate

gy

Transportation

Opportunity for LSP growth from expanding Services portfolio..

Warehousing

International

Logistics / GTM

Service

Logistics & VAS

Technology

Services

Ba

sic

Ex

ec

.

Se

rvic

es

V

alu

e A

dd

.

Se

rvic

es

Transportation

Companies

Warehousing

Companies

3PL 3PL

Supply Chain

Planning

3PL 3PL

4PL:

Supply Chain Consulting

Network Modeling

SCM & Logistics Process

Technology Selection

Logistics Procurement

Analytics

Supply

Chain

Manager

Integrated Services:

Service Logistics

Inbound Logistics

FF + GTM + Domestic

Global Distribution

Verticalized Services:

Retail, Automotive, Hi-

tech, oil, Gas and

Projects etc

Landscape

Services

Shipper

Managed

Transportation Service

Shipper

8


Transportation Platform as enabler for growth

Customer Experience

Management

Service Expansion

LSP IT Platforms

Operational Efficiency

Expansion into Supply Chain services: GTM, Materials Management, Demand Management

Process, IT & Change Management; M&A Consolidation

LSP Enterprise Solutions

Platforms for Geography Expansion

LSP Analytics & Business Intelligence

Continuous Improvement: Lean, 6-sigma and TOC

Customer solutions / RFP response

Customer on-boarding / Integration and Visibility

Value-added solutions: Portals, Self Service Apps, Mobility and Analytics

Integrated Services: Service Logistics, Inbound Logistics & Others

Re-engineering Legacy applications / platforms

Verticalize Solutions: Retail, Oil & Gas, Hi-Tech, Auto & Others

Truckers, Railroads,

Shipping Lines

3PLs, Freight

Forwarders

Integrated Service

Providers, Lead Logistics

Couriers, Postal

Services

Warehousing,

Ports

Transportation Optimization, WH Throughput Improvement,

Pricing

Customer management tools & mining service opportunities

9


Leveraging OTM for LSP – Customer Examples

• Tracking Shipments

• Planning Domestic

Movements

• OTM-Overland Transportation

Platform for several LoBs

across NAFTA

• Proposed Re-

implementation / migration

for MTS and 3 other lobs

• Proposed Support model

that accelerates customer

on-boarding and feature

enhancement

• Conducting POCs on

OTM for Express business

• First Fleet Management

Implementation in OTM

• Design Quote to Cash for 4 LoBs

• OTM Implementation as

LATAM Transportation

Platform

• OTM Extension ‘FORCE’

for Fiscal / Fin. processes

• Performance

improvements &

enhancements

• OTM enhancements, migrating

customers from Legacy to OTM

LSP

Transportation

Platforms

• Growth from new / Integrated services

• Growth from expansion to new geographies

• Global Process with personalization for customer / Geo.

• Faster customer on-boarding

• Incremental process Automation: zero click freight audit

• Operational Efficiency: Optimization, Analytics

Leverage OTM as a LSP Growth Enabler

Leading

APAC LSP

Leading

LSP in Australia

Leading

LSP in USA

Leading

LSP in USA

Leading

Trucking company

Leading 3L in

LATAM

10


Case Study:

LSP Overland Transportation

Platform for Leading LSP

11


Contract Logistics in non-US Geography

despite challenges

Collect and Standardize; Base data not

accurate / available (zips, lat-longs, regions,

non-standard equipment, carriers codes)

No defined tariff’s for carriers

Wide variety of rating logic (based on weight /

dim wt / distance / pallets / combination)

Mexican VAT (IVA) / Retention

Customer Orders – WMS, Manual

Order Assignments & Validations

Create Customer specific -Traffic File

number

Carrier Buy Shipment Planning

o Multi-stop

o Special Services

o Customer negotiated carrier rates

Shipment Execution

Customer Sell Shipment Rating

o Tariffs based on weight, mileage, SMC

o Cost Plus shipment rating

Contract Logistics Solution across warehouses & customers

Case Study: Overland Transportation Platform

12


Order details

• Steam ship line

• Import / Export

• Cut-off date

• Pick-up / drop off location

• Last Free Date

Buy Shipment

Shipment

Planning

Port Container Yard

Import Move Export Move

Consignee

(Live-Load / Drop) Port

Shipper

(Live-Load / Drop)

Manage Demurrage at port / container Manage Cut-off date

Case Study: Overland Transportation Platform Contd.. Intermodal business – consolidation across modes

13


Inter-country Processes

Which country owns the customer

Managing Carriers

o Choice of currency

o Country paying the Carrier

Through Shipment / Multi-leg Shipment

Handover between planners

Customs

Settlement

o Billing currency for the customer

o Credit Notes

o Print from TMS to pre-printed govt.

issued stationery (MX)

Key Business Enabler:

o Plan and Execute Trans-border shipments

o Leveraging joint purchase power

o Visibility across the system

Case Study: Overland Transportation Platform Contd..

Sea Port

Air Port

Major Hub

Border

Crossing

Scheduled Truck

Trans-Border processes that include multi-language & currencies

14



Before Cross-Docking

LTL

Cross-Docking

TL

Cross-dock

Cross-dock

Cross-

dock

Cross-

dock

Run consolidation programs like Cross docks and Pools

15


Air & Ocean First

and last Mile Load Brokerage

Contract

Logistics Transborder Intermodal

Motor Brokerage

Host

Systems

Orders

Buy Shipments

Tender to Carrier

Sell Shipments

Invoices

Bills

Legacy

Financial System

Air Ocean WMS 2

Customer

Specific rules

Order Constraints, Weight /

Volume / Delivery Window

/ equipment

Carrier

Constraints

Internal

Sell

External

Customer Sell

EDI - Auto Match &

Auto Approve

WMS 1

TMS

Invoices

Standalone

Bill

Consolidated

Bill

Inter-

Country

XML EDI Email Fax

Direct

Multiple Businesses in NAFTA on One TMS Instance


16


Time to market on New Services. Ex: Transborder product

Flexibility and Scalability.

o Contract logistics line of business to process multiple customers through the standard model while catering to individual customer needs

o Accommodate Growth in volumes

Operational Excellence, Standard Process & Automation

o Standardize common processes across different lines of business in one funnel

o Automate the standardized processes. Ex: ‘No click freight audit and payment’

Cost Optimization by

o Leveraging planning capabilities

o Rate to most appropriate carrier reducing transportation cost

Localization on a global instance

o Spanish Implementation – language and taxes

o Canadian Implementation

Case Study: Overland Transportation Platform Contd.. Benefits


What can LSPs do more with OTM?

18


Many opportunities to leverage more from OTM…

• Business Growth

• Scope: Inbound, Outbound, Return, Spares, Cross-docks & others • Other business units / LoBs • New geographies • New / integrated services (LSP)

• Process Automation: No-touch processes + exception management • Integrate process & application to

• WMS / Cross –dock • Order management, ERPs, SCM Planning • Mobile devices / Telematics • Partners: carriers, suppliers, customers

• Cost Reduction: Planning scenarios, infrastructure, maintenance

• Additional modules

• FTI • Fleet / Driver / Asset Inventory • Global Trade Management • Inventory visibility • Cooperative routing • Transportation sourcing

Benefits

Drive Growth

Cost Optimization

Time to market

Flexibility and Scalability

Standard Process &

Automation

Operational Excellence

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OTM Extensions that bridge the gap… if any

Extensions

Addresses IP / Unique process that adds to overall competitive advantage

Allows benefit from OTM’s out-of-the-box functionality while leveraging own IP/unique process capabilities

OTM extensions are created with ‘OTM Philosophy’ so that extension can scale with the core OTM application

Minor Customizations for productivity improvement.

Custom screens with small changes / tweaks to OTM screens

Custom process

FORCE ©

OTM 6.x

20


Continued Journey with OTM Optimization

Enhance/Implement OTM planning scenarios: Example. Look for continuous

move opportunities, Leverage Cross Dock or Pools etc.

21


Analytics to Drive Improvements

FTI

Source: Oracle

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Safe Harbor

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of

1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking

statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ

materially from those reflected in the forward-looking statements. Mahindra Satyam undertakes no duty to

update any forward-looking statements.

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