The document discusses transportation management systems (TMS) and how they can help companies manage all aspects of transportation from planning to execution to settlement across multiple transportation modes and geographies. It provides examples of how companies like Kraft Foods and Volvo Logistics have used Oracle Transportation Management (OTM) to reduce transportation costs, improve visibility and optimize operations. The document also outlines the key capabilities and features of OTM for transportation planning, optimization, execution and monitoring.
17. LSP: Logistics Business Models Evolve
More Value-Added Services Persistent Relationships
Core
competence Traditional 3PL Lead Logistics Supply Chain Services
Business
Management
Strategy
Customer
Customer
Strategy
Supply
Customer Chain
Coordination
Planning Customer (Strategy)
Lead Logistics/ 4PL
(Decision Making)
Transportation Engineering
Coordi-
nation Planning
Freight Value
Supply Chain
Ware- VAS Manager
Trans- added
Logistics
Freight housing
Execution Ware- port services Freight Value
Trans- Ware-
housing Trans- added Sourcing
port housing
port services
3PL 3PL 3PL
Warehousing Mfgr/Assy
Contract Logistics
Timeline
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18. Top International LSP Transportation Challenges
Poor visibility to shipment
status/limited in-transit 59%
visibility
Transportation price
50%
increases “Improving international
shipment visibility and
transportation management
often has a strong impact not
just on transportation costs
Managing international
compliance/documentation
48% but also on working capital
optimization via being able
to reduce inventory holding
requirements because of
Capacity shortages & shorter, more predictable
seasonality in shipping 36% lead times.”
volumes
Inaccuracies in total
35%
landed cost projections
* % of Respondents Citing as Top 3 Challenge
Source: Beth Enslow, “Transportation Management Benchmark Report: The New Spotlight on Transportation Management and How Best-in-Class
Companies Are Responding,” Aberdeen Group, September 2006. Over 170 companies were surveyed for this study.
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19. What LSP Customers Demand
Factors Considered When Selecting 3PL Issues Addressed in Contract with 3PL
Price of 3P Services
L 87% Rates and Compensation Details 92%
Service Standards and
87%
Quality of Tactical, Ops Services 87% Perf ormance Requirements
Process f or Termination or
72%
Expected Capability to Improve Dissolution of A greement
67%
Service Levels
Renew al of Service Beyond Initial
63%
Term of A greement
Range of Available V alue-Added
62%
Services
Procedures f or Conf lict
60%
Resolutions
Capable Inf ormation Technologies 61%
Penalties f or Non-Perf ormance 59%
Expected Ease of Doing Business 57%
KPI's to Determine Compensation 59%
Availability of Strategic Logistics
54% Specif ic Goals Related to
Services 49%
Continuous Improvement
IT Mandates (e.g., must use
Global Capabilities 51% specif ic sof tw are f or TMS, WMS, 45%
etc.)
Key to Success: Foundation/Platform of Integrated Processes & Systems in Place;
Excellent Customer Intimacy; and World-Class Lean Operational Performance
Source: C. John Langley Jr., Ph.D., and Capgemini Consulting, “The State of Logistics Outsourcing: 2007 Third-Party Logistics,” 2007, white
paper.
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