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.

1. La gestione (virtuosa) dei trasporti
Sergio Gimelli
Application Sales Consulting Senior Manager

2. Safe Harbor Statement
The following is intended to outline our general
product direction. It is intended for information
purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
relied upon in making purchasing decision. The
development, release, and timing of any features
or functionality described for Oracle’s products
remains at the sole discretion of Oracle.
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3. Il tema del trasporto
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4. Quanto spendono le aziende?
© 2008 Oracle Corporation – Proprietary and Confidential

5. OTM – Why Supply Chain is Important
• Logistics Costs as a Percentage of Sales
• Logistics Cost Components
• Logistics Cost By Industry
Source: IBM Institute for Business Value, 2005 Value Chain Study & Capgemini 2005 Third-Party Logistics Study, A T Kearney
© 2008 Oracle Corporation – Proprietary and Confidential

6. Le motivazioni ad investire in sistemi TMS
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7. Volvo Logistic: (internal) LSP
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8. Volvo Logistic: (internal) LSP
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9. Kraft
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10. Kraft
© 2008 Oracle Corporation – Proprietary and Confidential

11. Kraft
© 2008 Oracle Corporation – Proprietary and Confidential

12. Kraft
© 2008 Oracle Corporation – Proprietary and Confidential

13. Kraft
© 2008 Oracle Corporation – Proprietary and Confidential

14. WI-NE
NY-N
WI
NY-W
IA
IL
PA
NJ
IL-C
OH
IN
TX
GA
FL

15. Customers Deriving Green Value from Logistics
Kraft Foods – “Doing Well’ by “Doing Good”
• KRAFT saved 800,000km transportation through OTM
• based on 1.30€ per litre of diesel this equates to 375k€
savings on fuel alone
• or 332 tonnes of CO2 – the average annual emission of a
UK household
© 2008 Oracle Corporation – Proprietary and Confidential

16. Kraft Foods
http://www.supplychainbrain.com/content/technology-solutions/asset-management/single-
article-page/article/kraft-foods-takes-a-fresh-look-at-transportation-and-yard-management/
http://www.thegreensupplychain.com/news/09-12-08-1.php?cid=3039
COMPANY OVERVIEW
• Kraft Foods is the #1 food company in the US and #2 in the WHY ORACLE
world (behind Nestle). Kraft has existed for over 100 years and
currently serves consumers and retailers in 155 countries. Kraft Foods views Oracle as a
Seven of Kraft’s brands have more than US$1 billion in annual strategic partner to provide a
revenues; more than 50 top US$100 million in annual revenues. single, global, scalable, multi-
Kraft has 159 manufacturing and processing facilities worldwide
• Kraft became a fully independent company on 30 March 2007 country, multi-mode
• Public, NYSE: KFT, website: www.kraft.com transportation instance able to
• Founded in 1909 plan and execute across common
• 2006 Revenues: US$34.4 billion
• 2006 Net Income: US$3.0 billion carriers and private fleet to reduce
• Approx. Employees: 90,000+ transportation costs while
• HQ: Northfield, IL, USA; Operations: Global improving service levels
• Industry: Consumer Products (Food & Beverage) Manufacturing
RESULTS
CHALLENGES/OPPORTUNITIES
• Sought transportation cost reductions through long-term • Transportation cost savings (10-
planning within a dense network 15% cost reduction on key lanes)
• Manage operations across common carriers and private fleet through strategic planning and
• Operate globally across many currencies, languages and
transportation modes execution of cooperative routes
• Transport dry, refrigerated and frozen goods • Improved operations and
analytics with a single global
SOLUTIONS
instance
• Oracle Transportation Management (OTM)
• OTM Transportation Operational Planning • Improved carrier performance via
• OTM Transportation Cooperative Routing long-range capacity forecasts
• OTM Freight Payment, Billing and Claims
January 2008
© 2008 Oracle Corporation – Proprietary and Confidential

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
17

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.
18

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.
19

20. OTM – History & Development
© 2008 Oracle Corporation – Proprietary and Confidential

21. 5 Boug ht By
ember 2 00
Nov
© 2008 Oracle Corporation – Proprietary and Confidential

22. © 2008 Oracle Corporation – Proprietary and Confidential

23. © 2008 Oracle Corporation – Proprietary and Confidential

24. Gartner TMS Magic Quadrant 2009
© 2008 Oracle Corporation – Proprietary and Confidential

25. Forrester Research “Wave” for Transporation, 2008
Forrester Research, Inc., “The Forrester Wave™: Transportation Management Solutions, Q1 2008”,
by Patrick M. Connaughton, January 29, 2008
The Forrester Wave is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave are trademarks of Forrester Research, Inc. The Forrester Wave is a graphical representation of
Forrester's call on a market and is plotted using a detailed spreadsheet with exposed scores, weightings, and comments. Forrester does not endorse any vendor, product, or service depicted in the
Forrester Wave. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.
© 2008 Oracle Corporation – Proprietary and Confidential

26. OTM Customers by Verticals
CPG Food and Beverage
Chemical and Process 9% Manufacturing /
7%
Manufacturing Industrial
13% 19%
Retail
9%
LSP
43%
Status: April 2007
© 2008 Oracle Corporation – Proprietary and Confidential

27. Logistics
Service
Providers
Manufacturing
Distribution
Manufacturing
Retail
Distribution
Retail
© 2008 Oracle Corporation – Proprietary and Confidential

28. What is OTM?
• Management of all transportation activities
in a complete supply chain
• Any type of transport
• inbound, internal,outbound..
• Any Geography
• domestic, international, mix…
• Any mode:
• Truck, ocean, air, rail, etc.
• More complex is the network, more value can be
achieved with OTM
• Management means:
• Logistic Order Management
• (ex. Transport from Italy to China)
• Transportation Planning and Optimization
• Shipment planning, pooling strategy…
• Transportation Execution
• Visibility and Real Time Event Management
• Settlement
• Carrier invoice matching and cost allocation..
© 2008 Oracle Corporation – Proprietary and Confidential

29. Operational Process Life Cycle
© 2008 Oracle Corporation – Proprietary and Confidential

30. Operational Process Life Cycle
Logistics Orders:
Logistics Orders:
-- Manual Entry
Manual Entry
-- EDI // Integration
EDI Integration
© 2008 Oracle Corporation – Proprietary and Confidential

31. Ordine (ERP)
© 2008 Oracle Corporation – Proprietary and Confidential

32. Oracle HQ
Redwood Shores
Office Milano
30 May 2007 OTM
08:00 Order Management
Oracle HQ
Redwood Shores
10 July 2007
17:00
Office Milano
© 2008 Oracle Corporation – Proprietary and Confidential

33. Operational Process Life Cycle
Shipments:
Shipments:
-- Order Bundling
Order Bundling
Logistics Orders:
Logistics Orders: -- Load Optimization
Load Optimization
-- Manual Entry
Manual Entry
-- EDI // Integration
EDI Integration
Itineraries:
Itineraries:
-- Routing
Routing
-- Legs
Legs
Carrier Selection:
Carrier Selection:
-- Rating
Rating
-- Capacity Allocation
Capacity Allocation
© 2008 Oracle Corporation – Proprietary and Confidential

34. Oracle HQ
Redwood Shores
Office Milano
30 May 2007 OTM
08:00 Planning
31 May 2007
09:00
Oracle HQ 31 May 2007
Redwood Shores 11:30
29 June 2007
00:00
Port
29 June 2007
San Francisco
US$ 01:35
US$ 10 July 2007
17:00
Port
Genova
US$
INR
Time INR
Office Milano
© 2008 Oracle Corporation – Proprietary and Confidential

35. Oracle HQ
Redwood Shores
Office Milano
OTM
Planning
Port Long Beach Port Napoli
Oracle HQ
Redwood Shores
Port
San Francisco
Port
Genova
Airport San Francisco Airport Milano
Time
Office Milano
© 2008 Oracle Corporation – Proprietary and Confidential

36. Operational Planning
Routing & Consolidation
Example: Multi-Tier Distribution
• Dynamic Routing &
Consolidation
Supplier
throughout Network
• Intermediate Facilities
Multiple Orders
for Consolidation
- Consolidation pools
Consolid and cross-docks
Supplier DC 1 DC 2
Pool • Dynamic Optimization
Consolidated - When to use pool vs. by-pass
Multi-Stop
- Consolidation from pool
Shipment
Supplier
Example: Multi-Leg, Multi-Mode
• One order can involve
China – US Order
multiple shipments,
parties, and modes
• Optimization can be
Supplier Port Port DC performed for unlimited
(Guangzhou) (Hong Kong) (Los Angeles) (Chicago)
legs and modes
© 2008 Oracle Corporation – Proprietary and Confidential

37. Operational Process Life Cycle
Shipments:
Shipments:
-- Order Bundling
Order Bundling
Logistics Orders:
Logistics Orders: -- Load Optimization
Load Optimization
-- Manual Entry
Manual Entry
-- EDI // Integration
EDI Integration
Itineraries:
Itineraries:
-- Routing
Routing
-- Legs
Legs
Carrier Selection:
Carrier Selection:
-- Rating
Rating
-- Capacity Allocation
Capacity Allocation
Tendering:
Tendering:
-- Booking Carrier
Booking Carrier
-- Conditional
Conditional
Booking
Booking
Fleet:
Fleet:
-- Assign Equipment
Assign Equipment
-- Assign Driver //
Assign Driver
Power Unit
Power Unit
© 2008 Oracle Corporation – Proprietary and Confidential

38. Operational Process Life Cycle
Shipments:
Shipments:
-- Order Bundling
Order Bundling
Logistics Orders:
Logistics Orders: -- Load Optimization
Load Optimization
-- Manual Entry
Manual Entry
-- EDI // Integration
EDI Integration
Itineraries:
Itineraries:
-- Routing
Routing
-- Legs
Legs
Carrier Selection:
Carrier Selection:
-- Rating
Rating
-- Capacity Allocation
Capacity Allocation
Tendering:
Tendering:
-- Booking Carrier
Booking Carrier
-- Conditional
Conditional
Booking
Booking
Fleet:
Fleet:
-- Assign Equipment
Assign Equipment
-- Assign Driver //
Assign Driver
Monitor:
Monitor: Power Unit
Power Unit
-- Shipment Execution
Shipment Execution
-- Event Management
Event Management
-- Exception
Exception
Management
Management
© 2008 Oracle Corporation – Proprietary and Confidential

39. Oracle HQ
Redwood Shores
Office Milano
30 May 2007 OTM
08:00 Execution
31 May 2007
09:00
!
Oracle HQ
Redwood Shores
31 May 2007
11:30
! 29 June 2007
00:00
Port
29 June 2007
31 May 2007 San Francisco 01:35
10:00
Port
Genova
29 June2007
10 July 2007
17:00
14:00
!
Time
Office Milano
© 2008 Oracle Corporation – Proprietary and Confidential

40. Oracle HQ
Redwood Shores
Office Milano
30 May 2007 OTM
08:00 Execution
€€
Port Long Beach Port Napoli
Oracle HQ
Redwood Shores
Port
31 May 2007 San Francisco
10:00
2007
29 June 2007
10 July 2006
17:00
14:00
US$
US$ Port
Genova
Airport San Francisco Airport Milano
Time
Office Milano
© 2008 Oracle Corporation – Proprietary and Confidential

41. Operational Process Life Cycle
Shipments:
Shipments:
-- Order Bundling
Order Bundling
Logistics Orders:
Logistics Orders: -- Load Optimization
Load Optimization
-- Manual Entry
Manual Entry
-- EDI // Integration
EDI Integration
Itineraries:
Itineraries:
-- Routing
Routing
-- Legs
Legs
Cost Allocation:
Cost Allocation:
-- Orders // Order lines Carrier Selection:
Carrier Selection:
Orders Order lines
-- Margin Analysis -- Rating
Rating
Margin Analysis
-- Capacity Allocation
Capacity Allocation
Buy Side Invoices:
Buy Side Invoices:
-- Payment Carriers
Payment Carriers
-- Match and Pay
Match and Pay Tendering:
Tendering:
-- Self Billing
Self Billing -- Booking Carrier
Booking Carrier
-- Conditional
Conditional
Booking
Booking
Sell Side Billing:
Sell Side Billing:
-- Customer Billing
Customer Billing
-- Job Billing Fleet:
Fleet:
Job Billing
-- Assign Equipment
Assign Equipment
-- Assign Driver //
Assign Driver
Monitor:
Monitor: Power Unit
Power Unit
-- Shipment Execution
Shipment Execution
-- Event Management
Event Management
-- Exception
Exception
Management
Management
© 2008 Oracle Corporation – Proprietary and Confidential

42. Oracle HQ
Redwood Shores
Office Milano
Order Volume US$
OTM
Settlement
A 4.5 CUM $ 1,200
A
B 1.5 CUM $ 400
Oracle HQ C 3.0 CUM $ 800
Redwood Shores
Port
B San Francisco
US$ Port
$2400 Genova
C
€
€
Office Milano
© 2008 Oracle Corporation – Proprietary and Confidential

43. Operational Process Life Cycle
Shipments:
Shipments:
-- Order Bundling
Order Bundling
Logistics Orders:
Logistics Orders: -- Load Optimization
Load Optimization
-- Manual Entry
Manual Entry
-- EDI // Integration
EDI Integration
Itineraries:
Itineraries:
-- Routing
Routing
-- Legs
Legs
Cost Allocation:
Cost Allocation:
-- Orders // Order lines Carrier Selection:
Carrier Selection:
Orders Order lines
-- Margin Analysis -- Rating
Rating
Margin Analysis
-- Capacity Allocation
Capacity Allocation
Buy Side Invoices:
Buy Side Invoices:
-- Payment Carriers
Payment Carriers
-- Match and Pay
Match and Pay Tendering:
Tendering:
-- Self Billing
Self Billing -- Booking Carrier
Booking Carrier
-- Conditional
Conditional
Booking
Booking
Sell Side Billing:
Sell Side Billing:
-- Customer Billing
Customer Billing
-- Job Billing Fleet:
Fleet:
Job Billing
-- Assign Equipment
Assign Equipment
-- Assign Driver //
Assign Driver
Monitor:
Monitor: Power Unit
Power Unit
-- Shipment Execution
Shipment Execution
-- Event Management
Event Management
-- Exception
Exception
Management
Management
© 2008 Oracle Corporation – Proprietary and Confidential

44. Transportation Business Intelligence
Multiple Dashboards
Integrated with
day-to-day
operations
KPIs and
Reports
Flexible queries
& layout
© 2008 Oracle Corporation – Proprietary and Confidential

45. OTM in Volvo Penta
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46. Case Study
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47. Case Study: GE Oil & Gas
• Company
• Technology based global leader that
supplies advanced products, services
and complete solutions to the oil and
gas industry from the wellhead through
the refining and related petrochemical
and plastics industries
• 2006 revenues of $4.3 billion
• HQ in Florence, Italy
• Operations in nearly 103 countries,
6,000 employees
• GE Oil & Gas’ Logistics Network
• 9 Product Brands, manufacturing
capital equipment, spare parts,
maintenance, repairs and a full portfolio
of advanced services
• Outsourced to Lead Logistics Provider
• > 80,000 Shipment per year
• > €80M annual logistics freight spend
© 2008 Oracle Corporation – Proprietary and Confidential

48. GE Oil & Gas
• Business Drivers
• Transportation planning and execution manual or controlled
by suppliers
• Poor control in data quality – no possibility to control or track
& trace transportation activities and supply
• Sub-processes outsourced to Routing Center (Lead Logistics
Partner); this results in higher cost and less control
• Lack visibility of the logistics activity
• No direct transportation data availability – reporting on
Routing Center activities is needed
• E-mail based process
• Invoices Accounting only
© 2008 Oracle Corporation – Proprietary and Confidential

49. GE Oil & Gas – Nuovo Pignone
• Value
• Enable easy access to Group transportation contracts to
secure best freight rates
• Support transportation planning, both domestic and
international
• Track and trace all transports, give visibility for the customers,
factories and planners
• Better visibility will create higher efficiency in the supply chain
• Provide information for better inventory management
• Provide financial control over the transportation flows
© 2008 Oracle Corporation – Proprietary and Confidential

50. Q&A
Sergio Gimelli
Application Sales Consulting Senior Manager
sergio.gimelli@oracle.com