“Supply Chain Complexity, An Opportunity”

Greg Smith, Industry Director, Transportation and Logistics

2

Supply Chain’s In the Coming Decade…

“The next ten years will be all

about mobile communication’s

and real time data.”

Noel Perry

Chief Economist, American Trucking Association

ITLC 2010 Conference

3

Logistics Service Providers –

Industry Processes

4

Management Excellence:

The Next Competitive Edge

Time

Competitive

Advantage

OPERATIONAL EXCELLENCE

MANAGEMENT EXCELLENCE

Cost – Lean and Mean Quality – Six Sigma, TQM Speed – Real-time, JIT

Smart – Deep Insight Agile – Decisive Aligned – Across the enterprise

5

Supply Chain Includes …

Finished Goods Outbound Logistics Component Inbound Logistics

Ship

Docs

Transportation Management

Global

Transportation &

Intelligence

Freight Payment,

Billing & Claims

Sourcing, Rate

Management &

Tendering

Shipment

Management &

Visibility

Transport

Order

Ship

Docs

Packing Slips

& Labels

ASN

Transport

Orders Tenders

Tender

Response

Tender

Shipping

Documents

Shipment

Tracking Tenders

Shipment

Tracking

Shipment

Status

Invoice

Shipment

Status

Invoice Tender

Response

Tender

Shipper 3PL Logistics

Provider Carriers

Carriers 3PL Logistics

Provider

Customer/

Channel Customs

6

Supply Chain Includes …

• Raw Materials Sourcing

• Availability of Quality Labor Markets

• Production Facilities Availability

• Ability to Control Quality

• Government stability and predictability

• Internal currency policies that are consistent with global trade

• Ability to move financial assets and repatriate profits

• Adequate domestic transportation infrastructure

• Governmental protections for IP

• Willingness to enforce copyrights and patents

• And more…..much more

7

Multiple Services and 100% of Customers

on a Single Platform…

Global Logistics

Planning and Execution

Platform

Legacy Applications, Data Hubs, Infrastructure

Enterprise SOA

Business Process Platform, Collaboration Hubs

Serv

ice 1

Serv

ice 2

Serv

ice 3

Clie

nt 1

Clie

nt 2

Clie

nt 3

Rationalize and Modernize

Applications, Data Repositories,

and Infrastructure

Link Islands of Automation with a

Business Process Platform to facilitate

Quote-to-Cash, Procure-to-Pay

Streamline Collaboration with

Customers, Partners, Suppliers,

Regulatory Authorities through

Collaboration Hubs

• Supports best-of-breed solutions

• Can be configured

• Leverages legacy applications

• Supports industry standards

• Vendor Independent

Kraft uses Cooperative

8

Quote Order Plan Execute Monitor Settle

Key Opportunity Areas for LSPs

• Automate the quoting process improving contract compliance, quote accuracy and reducing lead times for quotes

• Capture, document, and respond to changes in orders without missing promised service levels

• Optimize planning and execution of orders so service levels are met while cost of service is minimized and resource utilization is maximized.

• Get visibility to orders, shipments, assets, and personnel so LSPs can pro-actively respond to operational disruptions and order changes, while ensuring service commitments are met

• Integrate quoting and service execution with operational accounting and billing so you can automate accounts receivable, payable, and inter-company accounting processes

Transformation of the business process through enabling technology platforms will allow LSPs to make IT strategic and help them differentiate their offerings in the market place

LSPs who automate their Quote-To-Cash process can see 3-5% revenue improvement, 5-7% reductions in cost and a 30% reduction in DSO*

Transforming the Quote-to-Cash Process can Significantly

Improve Scalability, Profitability & Operational Excellence

Source: Oracle Analysis

10

RTD Engine

Server

Business Processes

Common Enterprise Information Model

Real-time Business Rules &

Self-Learning Predictive Models

Inputs

Process data

& context

Process decision

point & feedback

• Process learns and continuously

optimizes in real-time based on

closed loop information

• Analytic decisions are taken for

each interaction

• RTD decisions based on rules and

predictive models

• RTD optimizes across conflicting

business process goals

• Process leverages common data

model of real-time and historical data

• Decisions based on facts, context,

analytic insights

RTD Enables Adaptive Business Processes

Copyright © 2009, Oracle and/or its affiliates. All rights reserved. 11

Driving Supply Chain Excellence With

Real Time Analytics

Sales Marketing Order

Management

& Fulfillment

Supply

Chain Financials

Human

Resources

Pipeline Analysis

Triangulated Forecasting

Sales Team Effectiveness

Up-sell / Cross-sell

Cycle Time Analysis

Lead Conversion

Employee Productivity

Compensation Analysis

HR Compliance Reporting

Workforce Profile

Turnover Trends

Return on Human Capital

A/R & A/P Analysis

GL / Balance Sheet Analysis

Customer & Product Profitability

P&L Analysis

Expense

Management

Cash Flow Analysis

Supplier Performance

Spend Analysis

Procurement Cycle Times

Inventory Availability

Employee Expenses

BOM Analysis

Order Linearity

Orders vs. Available

Inventory

Cycle Time Analysis

Backlog Analysis

Fulfillment Status

Customer Receivables

Campaign Scorecard

Response Rates

Product Propensity

Loyalty and Attrition

Market Basket Analysis

Campaign ROI

Service &

Contact

Center

Churn Propensity

Customer Satisfaction

Resolution Rates

Service Rep Effectiveness

Service Cost Analysis

Service Trends

12

Questions can be worlds apart

What is our performance?

• What are the top 10 markets?

• What is the gap to forecast?

• What customers are most

profitable?

• What are revenues by product

compared to last year?

• What are sales by product,

store and quarter?

• What is the trend for

employee-related costs?

• What is our open headcount?

How can we improve

performance?

• What if we increase promotional

capacity by 10% in our major

markets?

• What happens to our forecast if the

dollar declines by 5% to the Euro?

• What happens to gross margin if

our materials costs increase by

20%?

• Which customers drive 80% of our

overall profitability?

• What happens to same store sales

if inventory turns increase by 5%?

Situational Forward-looking

13

Summing it up….

• Forward thinking logistics service providers understand that IT is strategic and will make technology a central pillar in their corporate strategy.

• Data needs to be accurate, and near real-time. One version of the truth is critical.

• Your business architecture depends on your technology architecture.

Costs Revenues

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