Transport costs remain significant for most product-centric organizations, at an average of more than 6 percent of revenue, reaching as high as 10 percent.
Escalating fuel, raw material and labor prices, in addition to increasing legislation, create continual pressure to reduce costs and improve supply chain efficiency. Cutting transport costs has always been a priority for retail, manufacturing and logistics companies, but as global supply chains demand increasing flexibility, a new level of control is required.
With continued globalization, companies are finding a need to serve increasingly demanding customers with more personalized products and to do so faster. Companies need to respond quickly to rapid changes in demand to enable global growth, as well as properly manage external risks such as political instability and regulation.
The transport sector is responsible for a significant portion of carbon dioxide emissions, creating pressure to also reduce emissions and report accurately. Companies also need to optimize and measure performance, improve supply chain visibility and enable faster time to market, while improving customer service.
All of these put pressure on transport. With Oracle Transport Management (OTM), they can take control.
Transportation management systems such as OTM are proven to rapidly reduce transport and logistics costs by as much as 30 percent. This is achieved by integrating and streamlining logistics planning, execution, shipping costs and process automation across all modes of transportation. Typical savings can be achieved through the following:
Contract management – Using contractual prices, listing out additional costs, and reducing pricing errors can result in a 5 percent to10 percent reduction in administrative costs.
Vehicle loading and route selection – Lowering dock congestion, understanding constraints, and calculating the lowest cost routes can generate a 5-17 percent reduction in annual transport costs.
Mode and carrier selection – Comparing available options, monitoring costs, and eliminating the need for urgent shipping can result in a 2 percent to 7 percent reduction in annual transport costs.
Automated carrier selection reduces costs and increases customer satisfaction. It also ensures compliance with customer-provided routing guides as well as with a company’s internal carrier policies.
The flexible, rules-based engine in Oracle Transportation Management helps companies make cost- effective carrier selections, while respecting the customer’s specific routing requirements and requested delivery times. Routing-guide-rule criteria can support geographic ship from/ship to delivery information, including user-defined zones, delivery weight and volume, and delivery transit times. Routing-guide rules can be used to model your own organization’s inbound or outbound routing requirements, or requirements provided by your customers.
Oracle Transportation Management also provides a completely collaborative solution for logistics operations, suppliers, service providers, carriers, customers, purchasing, and even finance. Oracle Transportation Management plans, executes, and then monitors all of a company’s inbound and outbound shipments on a single platform, so even if it outsources some or all of its shipments to external service providers, they can use your Oracle Transportation Management application to plan, execute, monitor, and adjust shipment information. This keeps your entire logistics network operating as one cohesive unit.
Oracle Transportation Management also supports constraint-based rules, such as compatibility constraints, carrier commitments, location capacity constraints, and vehicle availability.