D2D

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E-MAR Côte dAzur June 5, 2003
Outbound Intermodal Logistics The Future
Logistics Management Outbound IT Systems as
Perceived by the Supply Chain Partners Dr. Bengt
Ramberg Vice President
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Content

• The EU D2D Project
• Research Questions
• Search for Outbound Logistics Management System
• The Next Generation of Logistics Management
  Systems
• The D2D Technology
• Cost Requirement to Future Technology
• Conclusions

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The EU D2D Project
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EU Transport Policy 2010

• In the last twenty years, the road
  transportations share of of total European
  freight transport, has increased from 30 to
  almost 45, whilst rail has decreased from 21 to
  8
• EUs desired solution is to optimize the use of
  transport infrastructure
• The EU Commission is motivated to demonstrate the
  competitiveness of multimodal transport and as
  such stimulate modes that both reduce total costs
  and at the same time support environmental-friendl
  y solutions

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TCMS
Logistics Co-ordinator

• Transport Management
• Exceptions Management
• Visualisation of Transport Status

FTMS

• Track Trace ? ETA Advice

Position data network
Customer
Producer
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D2D Total Budget EUR 7.3 million
Million
01.03.2002 28.02.2005
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4.2
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3.1
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The D2D Demonstrators
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John Deere Transport Chain
John Deere tractors from Mannheim, Germany to
Australian Dealers
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Volkswagen cars from Wolfsburg via Port of Koper
to Istanbul
Volkswagen Transport Chain
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Elkem Transport Chain
Salten
Mosjøen
Shipments of Silicon metal produced in Salten to
be delivered to Degussa Rheinfelden (Germany).
Meraker
Thamshavn
Bremanger
Bjølvefossen
Fiskaa
Lista
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General Cargo from Spain to the Canary Islands
Pamesa Transport Chain
Thursday
 
(86 kms.)
Pamesa (Almazora)
Depart Friday p.m.
Chema Ballester, SA
Port of Valencia
Shipping Pinillos
Arrival Wednesday
Arrival Wednesday
(22 kms.)
Port of Las Palmas
Grueltrans
Cegrisa (Telde)
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General Cargo from Lisbon area to the Azores
Islands
Unifac Transport Chain
Leg no. 3
Leg no. 1
Leg no. 2
FRESTI, LDA.
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Process Improvement Methodology
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Distribution 30 of Total Vehicle Cost
Dealer
Dealer margin 10-18
The Block Exemtion
Marketing 8-15
Manufacturer or distributor
Organisation 4-6
Warranty 1-2
Logistics 2-4
Product develop- ment
Total vehicle cost
Distribution 25 - 35
Manufacturing
Purchasing
Contracting
Expanding
?
Platform Development
Outsourcing Commonality Strategic
sourcing Partnerships
Lean manufacturing Outsourcing Network factory
Source FT World Motor Conference, Sept. 1999
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Methodology - 10 Steps to result
Step 1 Define Project Scope Structure
Step 2 Complete Data
Step 3 Establish KPI/ Opportunities
Step 4 Field Study/ Feasibility
Step 5 Benchmark current Supply-Chain
Step 7 Feasibility Correction Evaluation
Step 8 Comparative Benchmarking
Step 9 Action Plan
Step6 Develop optimized Supply-Chain
Step 10 Present Findings
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Main D2D Phases

Process Improvement
Evaluation of benefits
Present State Mapping
Demonstrate the D2D Technology and smart tech.

• Main deliveries
• - Detailed mapping of existing supply chain
• - Detailed mapping of re-engineered (IT, smart
  tech.) supply chain
• - Demonstration of an integrated management and
  communication system
• - Evaluation of benefits

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Current Physical Cargo and Information Flow
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Process Maps of Product-, Information and
Documentation Flows(example)
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Logistics Flow Analysis Time
Example Only!
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Logistics Flow analysis Cost
Example Only!
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Project Teams with Representatives from the
Supply Chain Partners
John Deer, Germany
John Deer, Australia
Wallenius Wilhelmsen Lines
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Transport Chain Managers Responsibility
John Deere
Contract with John Deere
Commercials responsibility
Super User (Transport Chain Manager)

Mannheim
WWL Australia
WWL
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Research Questions
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Research Questions

• What has been the devlopment in Supply Chain
  Integration, the last decade?
• What has been the experience from the application
  and implementation of ERP- or other systems?
• What is available in the market of logistics
  systems?
• What is the cost requirement set by the Outbound
  Supply Chain partners?
• Can improvement in cost and Value Added Services
  through Supply Chain Reengineering, justify the
  investments in technology?

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Search for Outbound Logistics Management System
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Supply Chain Overview
1) Work in Process and Factory Departure
3) In-Transit Visibility
5) Redistribution and Domestic Management
The TCM Total Pipeline Visibility, Management and
Control
2) Origin Consolidation And Distribution
4) Arrival and Entry Management
6) Delivery and Performance Management
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The Logistics Management Hierarchy
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Supply Chain Software Market Players
Enterprise Resource Planning (ERP) Management
of an enterprises operations, Baan, SAP,
Peoplesoft
Supply Chain Management (SCM) Management of
goods within and between points of supply and
consumption
Supply Chain Execution (SCE) Execution
management of the supply chain in and between
organizations (TCMS/FTMS)
Supply Chain Planning (SCP) Advanced planning
and scheduling of supply chain Activities.
Manugistics / i2
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The Logistics Management Systems Five Core
Capabilities

• Performance Management
• Costing
• Shipment Planning
• Documentation
• Shipment visibility
• Event management

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The Next Generation of Logistics Management System
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The Next Generation of Logistics Management System

• The ERP-style solutions (1980-1995)
• The Next Generation
• Total Landed Cost
• Logistics Service Contract Management
• The Virtual Logistics Department
• The Virtual Department gives a complete suite of
  Supply Chain Event Management applications
• End-to-end visibility
• Management of the sourcing-to-distribution
• Order-to-delivery
• Order-to-cash

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The D2D Technology
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TCMS Organise and initiate transport Control
transport Provide documents Visualise transport
information
Unit, transport means or consignment
identification
Position or ETA information
FTMS Provide transport status
Position data network
Producer
Customer
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The D2D System (1)

• Transport configuration
• Transport Means
• Load Units
• Locations
• Companies
• Cargo Types
• Environmental settings

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The D2D System (2)

• Transport Network Planning
• Tour/Voyage
• Provider Services
• Provider Contracts
• Transport Chains
• Customer Relations
• Customer Services
• Customer Contracts
• Long-term forecasts

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The D2D System (3)

• Organise Transport
• Handle Customer bookings (transport orders)
• Verify availability of required services
• Select transport chain

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The D2D System (4)

• Execute transport
• Prepare and issue service orders
• Monitor progress
• Loading and unloading operations
• Consignment, load unit or transport means
• Handle deviations
• Reusing previous functions

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Future D2D System Developments

• Handle claims
• Including monitoring of the handling procedure
• Handle invoice and payments (for transport
  operations)
• Interfacing to accounting systems

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D2D Concept Overview
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Deployment Phases
Commercial invoice, packing list, and other
data from Forwarder
Booking, Packing List and Commercial Invoice
Direct from Vendor or Buying Agent
Central Data Repository TCMS/FTMS
Carrier Events and Costs
Transport/ Purchase Orders
Customs Entry Events and Costs
ASN Data Back to Internal System
Primary
Secondary
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Cost Requiremen to the Future Technology
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Cost Requirement to the Future Technology

• The technology will have to be justified based on
  reduced costs from the Process Reengineering
  activities
• Present systems in the commercial market will
  have unit costs in the range of EUR 5,00-10,00
• Future technology has to meet cost figures in the
  range of EUR 0,30-1,00

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Conclusion
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Conclusion

• The system market is developing rapidly
• The last decade new leaders have been
  constantly promoted by the consulting industry
• The market is a consequence of the fact that few
  industries are investing in systems to manage
  outbound logistics
• The income to the system developers is
  insufficient to guaranty solid and robust
  solutions
• The D2D Technology is based on EU funds sponsored
  over the last decade and will provide an
  alternative to the commercial market

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