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Vishnuvarth Subramanian, Jade Global Inc.

Regardless of whether you use your own trucking fleet or contract the services of a third-party logistics provider to move your products from the warehouse to your customer, many of the business challenges are the same. The end goal is to move all the products through the supply chain as quickly and efficiently as possible. The less efficiently the product moves, the more it costs, thus reducing profitability and the ability to transport services at competitive rates.

In addition to the many details of organizing the logistics function, today’s transportation organizations face a myriad of additional issues that further threaten profitability, from rising fuel costs and a labor shortage to increasing regulatory requirements. To better execute transportation management, you need a wealth of information and easy access to that information. You also need to know where your trucks are, what is in the trucks, when and where shipments need to be delivered, which routes are most profitable, which shipments are running late and much more.

There are a few industries ¾ and not just process manufacturing industries ¾ in which transportation is more complex or where it constitutes a greater percentage of product costs. Oracle Transportation Management (OTM) has been crafted to address the special logistic needs and business challenges of managing the logistics in the supply chain network.

In this article, I will walk you through some of the key functionalities in Oracle OTM that you can use to improve your global transportation management services.

Pain Points in Transportation Management:

  1. Rising fuel costs.
  2. Shipment delays/incorrect shipments.
  3. High cycle times.
  4. Lack of real-time visibility of assets and freight.
  5. Lack of synchronization between logistic planning and execution processes.
  6. Limited sharing of logistics information between the involved systems.
  7. Limited support to predict and handle unexpected events.

Transportation Management Challenges by Industry:

 

Industry Typical Challenges
Process Manufacturing
  • Manage operations across common carriers and private fleet.
  • Price-sensitive products.
  • Container selection based on temperature controls and environment control.
  • Products have short shelf life.
Consumer and High Tech
  • Streamline/centralize planning.
  • Enforce business rules and provide cost visibility.
  • Maximize trailer volume utilization and operational loading.
  • Multi-mode and multi carrier planning.
  • Track materials and finished products by order, SKU lot or serial number.
Logistic Service Provider
  • Optimize the route and mode selection.
  • Trade Compliance.
  • Collaboration with trading partner.
Retail and Wholesale
  • Space utilization.
  • Need frequent and easy replenishment.

 

What is Oracle Transportation Management (OTM)?

OTM delivers robust transportation planning and execution capabilities to shippers and third-party logistics providers (see Figure 1). The OTM solution integrates and streamlines transportation planning, execution, freight payment and business process automation on a single application across all modes of transportation. OTM can be used with an enterprise resource planning or legacy order management system, as well as with any commercial best-of-breed or legacy warehouse management system.

OTM Delivers

Figure 1

Oracle Transportation Mgmt

Figure 2

OTM High-Level Overview:

Transportation Order Management: OTM has integration with external order management, purchasing, warehouse and other systems for managing transport demand. Transportation order management functions can be provided to external parties in the supply chain, such as suppliers who provide “ready-to-ship” information to release purchase orders.

Shipment Management: OTM provides automated decision support for a full range of transportation scenarios, from simple, direct shipments to those involving multiple legs and multiple modes. In addition, OTM provides robust functionality to manage exceptions during execution, e.g., tracking shipments, diverting shipments and expediting delivery.

Booking and Tendering: OTM provides an easy way of collaborating with transportation service providers using multiple communication formats, e.g., email, Web, mobile device and XML. Easier collaboration can help transportation organizations:

  • Share transportation plans and manage service provider responses, e.g., conditional bookings, tender acceptance.
  • Automate support for multiple types of tender processes, such as sequential tendering and broadcast tendering.

Visibility and Event Management: OTM customers can use the automated milestone monitoring feature available in OTM to proactively manage the lifecycle of orders and shipments to:

  • Automatically expedite shipments when pickup confirmations have not been received within a specified tolerance interval.
  • Receive status updates from transportation service providers using multiple communication formats, e.g., Web, XML, mobile phone or tablet.

Business Process Automation: The unique workflow agent technology available in OTM can help maximize productivity by automating the business processes. Workflow agents enable companies to model simple or complex processes to improve efficiency. For example, it’s possible to automatically re-plan shipments based on related order changes or notify involved parties of delayed shipments.

Reporting and Document Management: The following reports and documents can be generated from OTM: Cost Savings, Projected Late Orders, Carrier Performance by Lane, Bill of Lading, Commercial Invoice and Packing List.

Features in OTM:

Oracle Logistics Inventory Visibility: Gain visibility to both on hand and in-transit inventory levels across their extended supply chains, including internal and third-party facilities. Reduce inventory levels and costs with real-time inventory monitoring and management capabilities.

Secure Collaboration: Use the unique security model enables to collaborate with any trading partner, e.g., suppliers, customers, carriers, brokers, etc., by enabling these parties to access relevant information and business functions in OTM. For example, suppliers can route their orders, carriers can accept and manage their shipments, and customers can view the status of their deliveries using their access to OTM.

Features in OTM:

Oracle Centralized Shipping

Oracle Transportation Operational Planning: Apply specific business rules and logic in conjunction with powerful algorithms and optimization engines to optimize orders and shipments based on cost, service level and asset utilization. Also, manage dock appointments for greater warehouse efficiency with advanced scheduling and collaboration capabilities.

Oracle Freight Payment, Billing and Claims: Eliminate unnecessary charges and automate the time consuming and error prone processes of freight payment, customer billing and managing freight claims with a single system. Using actual shipment data captured throughout the transportation lifecycle, Oracle Freight Payment, Billing and Claims ensures that companies are paying, billing and tracking only the transportation services that were provided.

Service Oriented Architecture: Support specific business process requirements by leveraging OTM’s many Web services. For example, use the rating engine service to generate shipment cost and lead times as part of an order fulfillment process.

Easy Integration with Partner Manifest Systems and Third-Party Warehouses: Take advantage of efficient integration with third-party warehouses, including a messaging infrastructure to support the shipment request sent by the shipper and the shipment confirmation sent back from the third-party warehouse for seamless integration between the two systems.

Key Benefits:

  1. Monitor carrier performance.
  2. Prevent off-plan/maverick spending.
  3. Compare cost across modes and carriers.
  4. Reduce cost of operations.
  5. Find and move shipments to low-cost modes, carriers.
  6. Constraint based shipments allocation.
  7. Minimize dock congestion.
  8. Honor customer-specific routing instructions.
  9. Process automation.
  10. Increase employee productivity.
  11. Manage shipment exceptions.
  12. Track shipments.
  13. Improve customer service.
  14. Capture and monitor internal and external performance metrics.
  15. Monitor continuous improvement.
  16. Enforce process compliance.
  17. Maintain rates.

Conclusion:

Transportation management is a critical opportunity area for many companies as they look to improve the efficiency and reliability of their global supply chains. Significant freight cost reductions, increased on-time delivery and process automation are three primary areas of business value.

Oracle Transportation Management enables companies to manage their transportation networks on a global basis in terms of supply chain flows (outbound finished goods, inbound supplies, inter-facility/company shipments, returns), modes of transport (over the road, air, ocean and rail) and geographic area (domestic and international). Oracle Transportation Management provides simultaneous support for multiple languages, currencies, units of measure and business functions that may vary by business unit and geographic region. As a result, companies can support the nuances of their global operations while reaping the efficiencies provided by a single transportation management solution.

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Vishnuvarth Subramanian is a seasoned business systems analyst, solution architect and sales consultant who has worked with clients in healthcare, retail, high tech (software and hardware), consumer products, outsourced manufacturing and logistics (LSP and 3PL) industries. He is an active blogger and speaker with the Oracle Application User Groups (OAUG).