In this economy working with carriers to get the best rates available can be a challenge. Gathering the data to do a proper carrier bid can be a tedious process unless you have the proper information made available to you. Leveraging OTM’s Sourcing tool allows you to extract lane data, determine what carriers you want to offer bids to, & do bids rounds to ensure you get the best rates available. This presentation will take the audience through the stages to implement the OTM Procurement tool. It will provide details on how to scope the project, analyze existing shipment data in OTM to build data to bid from, and manage carrier bid rounds. Finally it will show how to award carriers the bid and turn those bids into rates within OTM. Presented by Samuel Levin at MavenWire.

1. Oracle Transportation
Sourcing Overview and
Demonstration
OTM Sig 09’

2. Safe Harbor Statements
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 decisions.
The development, release, and timing of any
features or functionality described for Oracle’s
products remains at the sole discretion of Oracle.
OTM Sig 09’ OTM Sourcing

3. Agenda
! Why Is Sourcing Important
! What Analysts Are Saying
! Family Dollar Case Study
! Current Challenges
! Key Features
! Shipment History
! Lane Aggregation
! Bid Configuration
! Bid Optimization
! Building Rates
! Sourcing Roadmap
OTM Sig 09’ OTM Sourcing

4. Why Sourcing is Important
• Changes in the economy demand carrier contract
evaluation
“I’m telling my people: Get smart. Look at their cost
drivers. They have changed significantly. Their
input prices are going down. We should not be
looking at price increases in most cases, but price
decreases.”
Sourcing and Procurement News: With Dropping Commodity Prices and Demand, Now is
Time to be Savvy with Vendor Negotiations - Oct 13,2008
OTM Sig 09’ OTM Sourcing

5. Trends Impacting Sourcing
Drivers of change…
Economic Conditions Dynamic Supply Chains
• Global production • Changes to links and nodes
• Fuel prices • Volume Shifts
• Carrier consolidation • Mode shifts
• Outsourcing, fleet
considerations
Logistics
Shippers Service Carriers Customers
Providers
Transportation Spend
Customer Demands
Visibility
• Service levels
• Increasing awareness of cost
• Price pressures and service impact on SC
• Quicker, faster, cheaper • Total freight cost tracking
• Accountability
OTM Sig 09’ OTM Sourcing

6. Why is Sourcing a priority right now?
The Market
! Transportation costs continued to
drop in Q1 ‘09
! Demand for logistics
services in all modes have
been on the downswing,
due to the manufacturing
and materials downturn
Fuel costs are low
December 2008
!
! Ocean and trucking rates
in particular have trended
down the most
! Network re-optimization
! Transportation cuts expected
! Result: Buyers want to re/
negotiate contracts
OTM Sig 09’ OTM Sourcing

7. Sourcing – What the Analysts are saying…
“The expanded breadth of TMS from sourcing to audit and payment
further enhances the value of TMS and provides strong ROI and
rapid payback (less than one year)…”
-- October 2008
OTM Sig 09’ OTM Sourcing

8. Sourcing - What the Analysts are saying
OTM Sig 09’ OTM Sourcing

9. Bid • Utilize Oracle Transportation
Management shipment
Preparation history to create lanes and
volume requirements
• Single transportation • Determine project
platform results in Bid structure and format
Integrate streamlined transfer of rates Creation
for use in operational • Configure project and
planning notify service providers
Oracle
Transportation
Sourcing
• Determine optimal service • Collect bids, capacity
Award provider mix and allocation Bid and other required data
from service providers
• Notify service providers of Event
award • Monitor project
• Configure business rules and
Bid constraints for awarding
Analysis • Execute ‘what If’ optimization
scenarios to determine impact
on transportation spend
OTM Sig 09’ OTM Sourcing

10. Need for OTM Sourcing
! OTM provides a user friendly format and
forum to discuss (re)negotiations based on
the buyers need
! With Sourcing the buyer can evaluate
shipment history and provider transportation
service providers the opportunity to provide
competitive pricing.
OTM Sig 09’ OTM Sourcing

11. Sourcing Case Study –
! 98-99% Acceptance of lanes by carrier in 09'
Company Statistics
! Tool Used 2 - 3 times a year
• 6600 Stores in 44 states
! Network bid (Did one in March)
• 45,000+ Domestic Inbound TL
Mini Bids
!
Loads Per Year
DC Opens they use it to bid
!
• 850-1000 Lanes placed out for Bid
! Poor Service Lanes • Bids run 2-3 times a year
! Store shifts cause change in volume
! 35 Core Carriers (Intermodal and TL)
! Used for Inbound not Outbound
! Looking to future versions to:
! LTL
! Imports Ocean
! No Solver for carrier service record (Transit Time)
! Challenges / Benefits
! In version 5.5 a lot of manual intervention to get data in/out of OTM
! Need to communicate with other departments to better understand market changes
and forecast for the coming year
! Lane Summaries help Family Dollar see planned vs. actual for the year.
OTM Sig 09’ OTM Sourcing

12. Shipment History
! Provides the ability to extract shipment
history direction from the OTM operational
database
! The shipment data extracted is rolled up to
give a view of
! Lane
! Carrier
! Weight/Volume
! Drive time
OTM Sig 09’ OTM Sourcing

13. Lane Aggregation
! Lane Aggregation summaries the shipment
history based on defined lane Geo Hierarchy
and provides counts based on those lanes.
! The lanes that are created are defined and
used in the bid round to show carriers what
they are bidding on, as well as being used as
reference points for reports
OTM Sig 09’ OTM Sourcing

14. Bid Rounds
! The Lane Summary Detail is based on the
constraints/restrictions on the lane summary
criteria and what shipments fit those
descriptions.
! The detail page shows the statistics in time
periods for the lane summary
OTM Sig 09’ OTM Sourcing

15. Bid Configuration
 How Many Bid Rounds?
 Lane Attributes
 Bid Attributes?
 Transit Time
 Attachments
 Carrier’s to be included in Bid
 What is your Cost Model?
• Accesorials
• Special Services
OTM Sig 09’ OTM Sourcing

16. Bid Optimization
! Core carrier program analysis - expansion or
contraction of carrier base
! Dedicated fleet analysis - contract vs fleet
usage
! Volume/ commitment analysis - model
existing contracts as well as planned impact
! Capacity / allocation analysis (used more in a
tight capacity market)
! Minority owned carrier requirements
! Minimum / maximum spend or volume
allocation
! Favor / Penalize carriers based on service,
incumbency, EPA SmartWay rating, etc.
OTM Sig 09’ OTM Sourcing

17. Build Rates
! Once the Bid is Closed OTM provides the
ability to build rates from the accepted Bid.
! Rates are built using a predefined rate
template format
! This process eliminates the need for
reformatting of carrier contracts into CSV
then loading.
OTM Sig 09’ OTM Sourcing

18. Sourcing Roadmap
! Ocean
! Port to Port, Door to Door, Door to Port, Port to Door
! Uses arbitraries for inland leg(s)
! Multiple currencies allowed
! Integrated Accessories
! Rate build will now include accessorials
! Applies to TL and Ocean rates
! Enhanced Reporting
! Bid Status Report
! Visibility into carrier response, lowest bids, coverage, last
login
! Outlier Bid report
! Quickly identifies bad bids and allows for correction or
exclusion
! Winning Bid Versus Other report
! Identifies where lowest bid was not selected in scenario
OTM Sig 09’ OTM Sourcing

19. Q & A and Discussion
Questions?
OTM Sig 09’ OTM Sourcing

20. Thank You!
gregg.lanyard@oracle.com
samuel.levin@mavenwire.com
OTM Sig 09’ OTM Sourcing