Logistics GTM FY04

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• Martin Etlis BDM, Post, Express Logistics
• Europe, Middle East Africa
• Oracle Corporation
• Jasper van Schelven
• Sales Consultant
• DCS Transport and Logistics Solutions

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The Transformation of Logistics Companies
Oracle's DCS SCM eFulfillment solution
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Agenda

• Market trends Why is the transformation
  necessary?
• IT enables the transformation
• Case studies

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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
• Shippers 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.
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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 customers logistics operations
• Integration with customers business processes
• Shippers are Centralizing and Outsourcing
  Logistics Operations
• Larger portion of shippers logistics operations
  are being outsourced to LSPs
• Integration into Customers (shippers)
  suppliers 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.
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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.
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Logistics Drivers
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Logistics Goals

• Improve Customer Satisfaction
• Increase Delivery Promise Accuracy
• Provide Real-Time Delivery Adjustments

Lower Cost Reduce Inventory and Carrying
Costs Streamline Movement and Storage Operations
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Logistics Opportunities
On-Time Deliveries 10-20 Improved Capacity
Utilization 5-10
Warehouse Labor Hours 10-30 Direct
Transportation Spend 5-25 Total Inventory
5 Shipping Errors 80-100
Lilly, Intermec, eSync, Tompkins, Meta Group,
Telia Networks
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Traditional Logistics
Your Company
Carriers
Customer
Warehouses
Execution
Planning
Multiple,Non-IntegratedSystems
Manual Processes
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Logistics Value Chain
Supply Chain Managment
Supply Chain Execution
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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

Logistics plays a vital role to getting
A happy customer
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The new role of the Logistics Service Provider
Moving up the value chain!
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A Better Way
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Oracle Complete E-Business Suite
Develop
Sell
Finance Human Resources Projects
Market
Procure
Service / Maintain
Manufacture
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Oracle DCS Logistics Solution
Global Customers
Carriers / 3PLs
Collaboration
OutboundDemandDestination
InboundSupplySource
Integrated Planning Execution
Continuous Improvement
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Oracle DCS Logistics SolutionDimensional
Considerations
Mode

• Dynamic
• Operational
• Tactical
• Strategic

• Facility
• Local Area
• Domestic
• International

• Truck
• Rail
• Air
• Ocean

• Outbound
• Inbound
• Intra-Org.
• Returns

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Oracle DCS Logistics Solution
Enables you to

• Integrate Planning and Execution
• Collaborate With All Trading Partners
• Streamline Global Shipments
• Drive Continuous Improvement

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Integrate Planning and Execution Seamless Flow
of Information
e.g. Distribution Network
Strategic
Network Design
e.g. Planned Shipments
Supply Demand Planning
e.g. Performance
e.g. Load Plans
Transportation Planning
e.g. Shipment Schedule
e.g. Dock Scheduling
e.g. Actual Shipments
Transportation Execution
e.g. Shipment Exceptions
e.g. Load Confirmation
Warehouse Management
Event Management
e.g. Delivery Confirmation
Operational
Minutes Hours/Days Weeks/Months
Quarters Years
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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

In-Transit
Warehouse
ConsolidatedInventory Status
WIP / PlannedProduction
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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

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Optimize Asset Usage Leverage All Assets to
Reduce Operating Costs
Warehouse Space
Vehicles
People
Capital
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Daily Business IntelligenceDrive Continuous
Process Improvement
Manage By

• Objective Set corporate and personal targets
• Fact Provide performance-based metrics
• Exception Continuously evaluate performance

For Better Decision Making

• 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?

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Drive Continuous Improvement Improve Performance
Through Integrated Intelligence
EstablishTargets
Perform Transactions
MeasureResults
LogisticsPlan
Exceptions
Out of Tolerance
Notifications
Adjust Plan
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Oracle Logistics Solution

• Integrate Planning and Execution
• Integrated supply, demand, and transportation
  planning withtransportation and warehouse
  execution
• Collaborate with All Trading Partners
• Real-time information sharing, event management
• Streamline Global Shipments
• Single global instance, international trade
  management
• Drive Continuous Improvement
• Integrated performance measurement and analysis

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Oracle Logistics SolutionKey Capabilities
NetworkDesign

• 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

Supply ChainPlanning

• Freight rating, automated mode/carrier selection
• Load tendering, shipment pickup requests
• Global track and trace, settlement

TransportationExecution

• Automated, tailorable warehouse functions (e.g.
  pick, pack)
• RF barcoding support
• Advanced inventory management capabilities

WarehouseManagement
EventManagement

• Monitor shipments
• Handle exceptions and notify all trading partners

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Oracles DCS Value Proposition
Which one would you chose?
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"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 Service Interview
in Profit Magazine
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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 todays 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
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Kühne and Nagel Streamlining Scanias
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
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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

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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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