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Click to edit Master title style,Click to edit Master text styles,Second level,Third level,*,Supply Chain Visibility and Logistics,Collaboration,Point of View,David A. Hance, Northeast Region, Stamford, CT,Naoji Takeda, Northeast Region, New York, NY,M. Christopher Herrera, Northeast Region, New York, NY,John Scott, Northeast Region, Roseland, NJ,April 2001,Final Draft,Digital Markets and Supply Chain,Table of Contents,Objective,Introduction,Supply Chain and Visibility Collaborative Logistics Solutions,Major Attributes,Value Propositions of Visibility/Collaborative Logistics Solutions,Visibility and Collaborative Logistics Solutions Landscape Analysis,Vendor Matrix,Andersen Point of View,Objective,The objective of the Digital Markets/Supply Chain Teams “Point of View” is to gain a comprehensive understanding of evolving Supply Chain Visibility and Collaborative Logistics solutions and how it will impact enterprise users.,Focus will be on:,Understanding solution from the entire Supply Chain Management perspectives,Articulating functionality and benefits,Landscape of fragmented solution sets,Introduction,Introduction: Illustration,Today,67%,of supply chain executives conduct transactions with transportation providers,manually,(i.e., face-to-face, phone, fax, or mail). Less than a quarter use EDI and less than one-tenth use the Internet.,Morgan Stanley Dean Witter Research, August 2000,Logistics Challenges Are Real,Achieve 100% accuracy in all customer orders?,Get a real-time status visibility of all shipments from trading partners?,Optimize all modes of transportation?,Receive shipments from Asia and Europe?,How can I?,Why my APS has not deliver the promised ROI?,What Do Users Want from B2B Connectivity?,According to AMRs interview of 152 executives on their views of the relative importance on the marketplace functionalities, SC Visibility and logistics-related functions (Order Status/Tracking and Transportation management) were among the highest in importance.,Source: AMR Research November 2000,Supply Chain Visibility and Collaborative Logistics Solutions,Supply Chain Visibility and Collaborative Logistics Defined,Due to the advent of the Internet technology, B2B eCommerce and collaborative technology, a new category of much fragmented Supply Chain Management tool has emerged;,Supply Chain Visibility,and,Collaborative Logistics.,Supply Chain Visibility tools enable enterprise to monitor, track and control all executed order shipments across its extended supply chain. Typical this includes inbound logistics from suppliers and outbound logistics to customers. Real-time freight data from logistics service providers (Carriers, Freight forwarders, Customs brokers) as well as trading partners (suppliers and customers) are validated and aggregated to provide an end-to-end status visibility. Tracking of goods at various levels (Customer Order, BL#, Container and SKU level) are made possible by common data modeling.,Collaboration happens at various levels of logistics service providers. Enterprise-Service Provider collaboration includes exception contract negotiations, tender/acceptance, alerts messaging/workflow and scheduling. Also Supplier-Customer collaboration will also be enhanced by feeding real-time inventory visibility into APS module to provide Capable-to-Promise (CTP) information to customers.,Supply Chain Visibility,Collaborative Logistics,Supply Chain Management Layers,Supply Chain Planning (SCP),SCP is a system of applications that enables demand planning and forecasting, materials procurement and production scheduling.,Typically, SCP systems are used for forecasting and preparation of manufacturing/assembly processes.,Supply Chain Execution (SCE),SCE is a framework of applications that enhance the productivity of the storage, preparation, logistics and delivery of completed products.,SC Event Management,Warehouse Management,International Trade Logistics,Inventory Management,Production Scheduling,Distribution Planning,Supply Planning,Supply Chain Collaboration,Demand Forecasting and Planning,Supply Chain Network Design,Manufacturing Planning,Transportation Management,Order Management,Operational,Planning,Tactical,Planning,Strategic,Planning,Planning Level,Supply Chain Execution,Supply Chain Planning,Decision Support,Time Horizon,Seconds/,Minutes,Hours/,Days,Weeks/,Months,Quarters,Years,Adopted from AMR Research,Visibility / Collaborative Logistics,Scope,Traditional View vs. New Supply Chain Management Tools,Supply Chain Planning (SCP) tools were developed separately from Supply Chain Execution (SCE) tools. As a result, they both require unique ERP interfaces. This “ERP centric” model often resulted in customer demand not fulfilled properlytheoretically perfect supply chain plans not executed properly due to missing linkages between planning and execution systems.,Visibility and Collaboration components, however, began linking plans and results of various supply chain activities at or close to real-time basis. Also these components enabled enterprise to collaborate with trading partners and logistics service providers. Visibility component is the eyes, and Collaboration is the mouth to communicate for an enterprise. With better visibility and communication, an enterprise can leap benefits from functionality from each component solutions (APS, ERP, TMS and WMS).,New View,Traditional View,Collaboration,Supplier,Carriers,Customer,Visibility,A,PS,ERP,TMS,WMS,Supply Chain Execution,(TMS, WMS),ERP Application,Supply Chain Planning,(APS),Supply Chain VisibilityHow it Fits to Existing Sytems,Planning,Execution,Data,Interface,ITLS,Database,WMS,Database,TMS,Database,OMS,Database,APS,Database,ERP Application,ERP Application,Supply Chain Visibility,Collaboration,SCPSystem,SCESystem,Source: AMR Research, 2000,Extended Trading Community,Single Interface,Visibility,Event Tracking,Performance & ComplianceManagement,Distributed Data Mgmt,Alert Mgmt,Workflow Coordination,FinancialServices,Suppliers,3,PL & Transport,Hubs &Exchanges,Customers,Connecting Logistics Trading Partners,End-to-End Visibility Scope,Internet Collaboration Engine,Supplier,Ocean,Carriers,Plants,Air,Carriers,Assembly,Ground Carrier,Warehouse,Customer,Logistics Collaboration,Logistics Collaboration facilitates data exchange among all parties within fulfillment chain. This is not demandforecast,collaboration between customers and suppliers such as CPFR (Collaborative Planning Forecasting and Replenishment).,Logistics Collaboration focuses on executed orders to be fulfilled as planned. CPFR focuses on demand forecast and fulfillment plans to be accurate.,Suppliers,Carriers,Customs Brokers,Freight Forwarders,Warehouses,Customers,Manage purchase orders, ensure order compliance,Procure services, monitor inventory movement, monitor performance,Procure services, Expedite customs clearance, monitor performance,Procure services, monitor inventory movement, monitor performance,Procure services, monitor inventory level, monitor performance,Fulfill orders, improve customer service,ASN, Packing Slip, Shipping information,Service bid, Pick up information, Estimate time of arrival, route information, proof of delivery,Service bid, service contract, document request, Estimate time of clearance,Service bid, Pick up information, Load information, Estimate time of arrival, route information, drop off information,Warehouse receipt, shipment confirmation,Inquiries, expedite requests, delivery confirmation,Purchase Order,Service tender, Pick up information, Planned time of delivery,Service offer, Product information and import documentation,Service tender, Pick up information, Planned time of delivery,Pick, pack and ship orders,ASN, Visibility information, Exception Alerts,Purpose of Collaboration,Collaboration With,Outgoing,Incoming,Information Exchange,Major Attributes of Supply Chain Visibility Tool,Global,Multi-mode,International Trade,Connectivity,and,Content,Transportation Planning,Technology,Logistics Process Automation,Product Tracking,CollaborationEngine,Performance Management and,Intelligence,Transportation Planning,Many of visibility solutions have been developed from traditional transportation management systems (TMS) and inherits many of their planning functionality. The most important benefit from integrating transportation planning with visibility functionality is the ability to,simulate,on real-time: supports decision maker in exception handling process by assessing what aftereffects may be (e.g., reject this order because a more important customers order would be delayed, or attempt to transfer it to another facility because profitability level is high).,Functionality,Routing, rating and optimization (domestic and international),Order Consolidation,Equipment Utilization,Commingling of Orders,Rate Analysis,Continuous Movement Management,Benefits,Transportation Cost Reductions,Customer Service Commitments,Enable complex merge-in-transits and multileg, multiroute transportation planning,Global,Multi-mode,International Trade,Connectivity,and,Content,Transportation Planing,Logistics Process Automation,Product Tracking,CollaborationEngine,Performance Management and,Intelligence,Technology,Logistics Process Automation,This functionality supports day-to-day operations of logistic/traffic departments. Major processes include procurement of logistics services, contract management, booking and tendering, payment and settlement. The automation of the logistics processes required to execute the delivery of goods helps reduce internal operating costs of logistics organization.,Functionality,Internet-based RFP to carriers and service providers,Contract Management using central data depository,Shipment/Load Tendering process automation with carriers,Automated payment support for freight payments based on actual carrier performance,Support for freight audits and compliance reporting,Benefits,Reduced administration and operating costs,Reduced Order Cycle times,Global,Multi-mode,International Trade,Connectivity,and,Content,Transportation Planing,Technology,Logistics Process Automation,Product Tracking,CollaborationEngine,Performance Management and,Intelligence,Logistics Process Automation (Continued),The logistics processes automation should address end-to-end logistics activities.,Goods,Trans-,portation plan,Strategic,Plan (Contract,Neg.),Tender,Carrier Pickups,Delivers,Invoice,Match,In transit,Invoice to,Shipper,Pay,Audit,EDI / XML,EDI / XML,EDI / XML,Carriers,Fulfillment Process,Settlement Process,Planning Process,EDI / XML,Whse,Depot,Depot,Global,Multi-mode,International Trade,Connectivity,and,Content,Transportation Planing,Logistics Process Automation,Product Tracking,CollaborationEngine,Performance Management and,Intelligence,Technology,Product Tracking,Track and Trace function enables an enterprise to locate key assets and associated contents instantaneously and precisely within the supply chain.,An important aspect is the ability to,Monitor:,Many solutions provide real-time tracking of supply chain objects and events including visibility into actual inventory levels, orders, shipments, production and supplyeven down to ATP numbers of individual SKUs. Also the solution must support,Multi-Mode,and,International,geographic coverage.,Functionality,Monitor orders, shipments, inventory at clientdefined supply chain milestones,Data model to support linkages among various tracking units (i.e. orders, BL #, SKUs, serial numbers, ASN #),Event notification to alert diversion from planned performance (late shipments and partial shipments due to carrier noncompliance or accidents),GPS integration and environmental monitoring (temperature, etc.),Benefits,Improve order fill rates and customer service level by expediting supply chain events,Reduce inventory and safety stock level,Global,Multi-mode,International Trade,Connectivity,and,Content,Transportation Planing,Logistics Process Automation,Product Tracking,CollaborationEngine,Performance Management and,Intelligence,Technology,Collaboration Engine,Collaboration Engine facilitates communication and data exchange between an enterprise and customers, suppliers, transportation carriers and service providers. Collaboration takes different forms depending upon the partners, from a simple exception alerting to complex negotiation process support over the Internet.,Functionality,Notify:,supports real-time exception management via message system, which can alert a decision maker that attention is required,Control:,allows in-process adjustment, such as shipment diversion or order expediting,Business Rules: create predetermined business rules to expedite exception handling and inter and intra-enterprise workflows,Benefits,Reduce cycle time by eliminating phone calls, fax and paper communication,Ability to respond quickly,Global,Multi-mode,International Trade,Connectivity,and,Content,Transportation Planing,Logistics Process Automation,Product Tracking,CollaborationEngine,Performance Management and,Intelligence,Technology,Performance Management and Intelligence,Using a common data model and analytical tools, most solutions offer functionality to,Measure:,provides various Key Performance Indicators (KPIs) data so that decision makers can assess supply chain performance.,Functionality,OLAP tools are usually capable of creating various reports as well as any other ad hoc reports,Service level analysis allows a company to perform its own scorecard analysis of on-time delivery for a customer or the entire customer base,Carrier and service provider performance and history can be easily obtained,Landed cost analysisa company can plan profitability of selling merchandise by summarizing all potential supply chain costs beyond FOB price,Benefits,Improve negotiation ability with carriers and service providers with concrete historical performance record,Plan and manage own supply chain better with comprehensive information,Global,Multi-mode,International Trade,Connectivity,and,Content,Transportation Planing,Logistics Process Automation,Product Tracking,CollaborationEngine,Performance Management and,Intelligence,Technology,International Trade Support,As Supply Chain Visibility solutions target large, multinational enterprises, it is critical to support international trade of goods. Many of this functionality are provided by partnering with best-of-breed providers such as Nextlinks and Vastera.,Functionality,Import and Export Customs Compliance process management,Customs compliance contents,Trade Document Management,Benefits,Expedite customs clearance process,Save administrative costs and cycle time,Proof of “reasonable care” for potential customs audit and penalty risks,Global,Multi-mode,International Trade,Connectivity,and,Content,Transportation Planing,Logistics Process Automation,Product Tracking,CollaborationEngine,Performance Management and,Intelligence,Technology,Connectivity and Content,Connectivity is the most important foundation of visibility applications. Most solutions offer an ASP model data aggregations service. The various data form (EDI, XML, Web) from logistics partners are aggregated, validated and cleansed prior to be made available as visibility information.,Also it offers logistics contents such as carrier records, availability, spot transactions, as well as tariff and customs compliance contents via connections with specific content providers and B2B marketplace.,Functionality,Data management service,EDI/XML translation,Partner connectivity services,Benefits,Low-cost connectivityConnect with all trading partners without building a custom EDI link with each partner,Global,Multi-mode,International Trade,Connectivity,and,Content,Transportation Planing,Logistics Process Automation,Product Tracking,CollaborationEngine,Performance Management and,Intelligence,Technology,Technology,As Visibility applications will be used by many different parties and deployed globally in most cases, it is important that the application architecture is Internet-enabled and scalable. Many of Visibility tools developed by 3PLs did not survive largely due to its proprietary technology and inflexible data modeling. Many vendors use EAI such as Tibco and Webmethods for enterprise integration.,Functionality,Internet-Enabled Database,ASP/Hosted environment for connectivity layer,Secure environment,Use of EAI (Enterprise Application Integration) to easily integrate with various enterprise applications,Benefit,Scalability,Adaptability,Security,Global,Multi-mode,International Trade,Connectivity,and,Content,Transportation Planing,Logistics Process Automation,Product Tracking,CollaborationEngine,Performance Management and,Intelligence,Technology,Value Propositions of Visibility/Collaborative Logistics Solutions,Revenue Opportunity,Reduce Stockouts,Cost Savings,Inventory Cost,Transportation Cost,Warehousing Cost,Administrative Cost,Financial Value,Customer Service,Time,Reduce Time,Order cycle time,Lead time,Planning cycle time,Event response time,Customer Service,Improve order fill rate,Respond customer inquiry,Enable ATP (Available to Promise),Enable CTP (Capable to Promise),Value Propositions of Visibility/Collaborative Logistics Solutions,Visibility/Collaborative Logistics Solutions offer similar value propositions to most of SCM applications. The solution acts as a conduit to link all disparate SCM applications and trading partners to deliver higher level of integrated benefits.,Visibility/Collaborative Logistics Solutions can not deliver all the benefits by its own.,Financial Value,Customer Service,Time,Financial Value,Visibility/Collaborative Logistics Solutions offer a significant financial value when properly integrated and implemented with planning systems.,A company can benefit from improved availability, transportation cost reduction in short term,Revenue,Inventory Cost,Transportation Cost,Warehousing Cost,Improve forecast accuracy and fulfillment capability,Improve supply chain planning capability,Improve forecast accuracy and fulfillment capability,Plan distribution network so shipment skips warehouse,Improve carrier management and negotiation by better information,Consolidation, load/container optimization, route optimization,Automate communication with logistics partners and manage logistics data,Improve warehouse management operation via improved inbound/outbound planning,Assist accuracy via fulfillment capability improvement,Direct contribution from fulfillment visibility, planning and simulation capability,Assist accuracy via fulfillment visibility and planning improvement,Direct contribution from fulfillment planning/ simulation capability,Direct contribution from logistics process automation and intelligence capability,Direct contribution from transportation planning capability,Direct contribution from logistics process automation and connectivity,Assist accuracy via fulfillment visibility improvement,Medium,Large,Small,Medium,Large,Large,Medium,Small,Objectives,Category,Impact,How does it help?,Impact of Visibility/Collaboration,Stockouts reduction,Improve inventory availability,Lower safety stock level,Increase direct shipment,Reduce freight and service rates,Optimize transportation,Reduce logistics administration costs,Reduce handling cost,Overall Approach,Financial ValueHow It Can Translates into ROC,Increase Customer Service,Reduced Stockouts,Less discounts for slow move items,Less merchandise returns,Optimized freight, modes, etc.,Reduced warehouse operating costs,Increases efficiency in administration,Less disputed receivables,Reduced safety tock level,Shorten lead time,Close a warehouse,Impact,$1,300,000,$1,339,000,Net Sales,$1,000,000,$950,000,Cost of Goods,$150,000,$120,000,Transportation Exp,$40,000,$30,000,Logistics Overhead,$100,000,$95,000,A/R,$200,000,$150,000,F.G. Inventory,$30,000,$25,000,Fixed Assets,$300,000
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