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“What Got You Here……” Greg Smith, Industry Director, Freight and Logistics, Oracle Corporation. Logistics Service Providers – Key Industry Processes. Logistics In the Coming Decade…. “ The next ten years will be all about mobile communication’s and real time data.”. Noel Perry

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“What Got You Here……” Greg Smith, Industry Director, Freight and Logistics, Oracle Corporation


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    1. “What Got You Here……” Greg Smith, Industry Director, Freight and Logistics, Oracle Corporation

    2. Logistics Service Providers – Key Industry Processes 2

    3. Logistics In the Coming Decade… “The next ten years will be all about mobile communication’s and real time data.” Noel Perry Managing Director, FTR Associates ITLC 2010 Conference 3

    4. LSPs Are Becoming Supply Chain Orchestrators FreightTrans-port Ware-housing ValueAdded Svcs Traditional 3PL Lead Logistics/4PL Supply Chain Services BusinessStrategy Customer Customer Strategy Supply Chain Coordination (Strategy) Customer Lead Logistics/ 4PL (Decision Making) Planning Core Competence Engineering Transport-ation Customer Coordination FreightTrans-port 3PL Ware-housing 3PL ValueAddedSvcs 3PL Planning SupplyChainManager VAS Sourcing FreightTransport Ware-housing Execution Warehousing Mfgr / Assy Contract Logistics • Shippers want LSPs to support more and more supply chain functions • LSPs are driving growth and profitability through service expansion Timeline

    5. Growth Through Service Expansion Is Forcing Structural Changes In The LSP Industry….. • GEOGRAPHY: Local, Regional to National and Global • MODES: Single Mode to Multiple Modes of Transportation • SERVICES: Single Service to Multiple Services to Bundled Services • CUSTOMER MIX: Fewer customers with larger spend/customer • EMPLOYEE MIX: More positions, More specialized • IT LANDSCAPE: Single Operational Platform to Multiple Platforms

    6. “Information about the package is as important as the package itself…” Frederick W. Smith, Chairman and CEO Almost 30 years ago….

    7. Index of Logistics Costs as a Percent of GDP 1986 - 2007 SPEAKER PPT TEMPLATE_M.PPT 9

    8. Supplier Supplier Supplier Supplier Supplier Supplier Logistics Business Required CapabilitiesTransportation From Shipper To Consignee “I need to optimize my milk runs” “ I need to select most cost effective transportation move” ScheduledCollection Runs Domestic Vendor “ I need to optimize my loading” Cross Dock Factory Off Shore Vendor “ I want to improve planners productivity.” “I want to increase my capacity” CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract 8

    9. Management Excellence:The Next Competitive Edge Smart – Deep Insight Agile – Decisive Aligned – Across the enterprise Competitive Advantage MANAGEMENT EXCELLENCE Cost – Lean and Mean Quality – Six Sigma, TQM Speed – Real-time, JIT OPERATIONAL EXCELLENCE Time

    10. LSP Leaders Will … • Automate to scale the business and improve profitability • Leverage technology to speed time to market • Customize solutions without customizing processes and IT • Collaborate… with customers, partners, employees • Measure to drive improvement • Have one version of the truth Leaders will make information technology astrategic differentiator by using aplatform strategy…

    11. Service 2 Service 1 Service 3 Client 1 Client 2 Client 3 What LSPs Want: An Open Flexible Platform to Support Logistics Planning & Execution… Rationalize and modernize applications, data repositories, and infrastructure Enterprise Logistics Planning & Execution Link systems using SOA to create a business process platform that drives key processes such as quote-to-cash, procure-to-pay Streamline collaboration with customers, partners, suppliers, regulatory authorities through collaboration hubs Transportation Mgt, Warehouse Mgt, Global Trade • Platform characteristics • Supports best-of-breed solutions • Can be configured • Leverages legacy applications • Supports industry standards • Expandable, scalable Enterprise SOA, Workflow Mgt, Event Mgt Legacy Applications, Data Hubs, Infrastructure A Scalable, Sustainable, Differentiating Platform … the Technology Exists Today!

    12. An Example…….. • Today, transportation is being shared as companies work together to load trucks and minimize costs. • Candy makers in the mid-west have now banded together to not only share transportation but also share warehousing and warehouse labor expenses. • Shipment patterns, delivery volumes, routing schedules are all coordinated to minimize costs of distribution to final retail site. • Result is over 500,000 miles saved by just one candy maker in one region for one product in one year. Business can expect more and more of this kind of thinking. These kinds of savings are too large to be ignored. 12

    13. Transportation in a Capacity Short Environment… • As load requests and shipment requests are coming in, they will be checked against “Network Value” before a load is accepted • Pricing • Commodity • Empty Miles • Available assets • Profitability • Route Optimization and Fleet Optimization for Profit • Tools to do this, exist today • Shipment patterns, delivery volumes, routing schedules are all coordinated to minimize costs of distribution to final retail site. Business can expect more and more of this kind of thinking. These kinds of savings are too large to be ignored. 13

    14. Fuel Savings and the Primary Cause • From 2007 to today, America is using roughly 25% less diesel fuel, while hauling more freight • What factors are going into this dramatic change ? • More use of intermodal • Tractor and trailer streamlining • Wide tires and tire pressure sensors • Speed governors • Others? • While all of the above factors have something to do with the fuel savings, industry experts believe most of the savings are coming from optimization • Fleet optimization • Route optimization • Shipment optimization Business can expect more and more of this kind of thinking. These kinds of savings are too large to be ignored. 14

    15. Summary Revenues Costs • The leading LSPs in the industry understand that IT is strategic and make Technology a central pillar in their corporate strategy. • Adopting a platform strategy will lower TCO, increase agility and adaptability by supporting multiple clients and multiple services on a single platform. • LSPs who integrate their processes across the enterprise can expect to see 3-5% revenue improvement, 5-7% reductions in cost and a 30% reduction in DSO

    16. Thank You! 16