With Oracle technology and a customer focus, OOCL leaves competitors in its wake.
by Tara Swords, February 2011
Orient Overseas Container Line Limited (OOCL), a subsidiary of Orient Overseas (International) Limited, got its start in 1947 when a single ship manned by an all-Chinese crew reached the U.S. and Europe. Founder C.Y. Tung then grew the company into what it is today: one of the world’s biggest cargo shipping lines. OOCL’s operations affect millions of people around the globe daily as the company transports everything from shoes to cars to appliances across oceans and continents.
The cargo shipping industry is highly competitive because it is commoditized. In other words, all carriers sell the same basic service, and it’s easy for customers to compare the price of shipping a 20-foot equivalent unit (TEU), which is a standard-size metal container that customers fill with cargo. In addition, the cargo industry is heavily asset based, requiring major up-front investments to acquire vessels and containers. To reap the best return on those investments, shippers aim to operate them at top capacity—not an easy aim when there is little variation in pricing among competitors and profit margins are small. That’s why, as OOCL management knows well, the best way to compete is to differentiate the quality of service the company provides.
The key to providing the best service, says OOCL CIO Steve Siu, is a flexible technology infrastructure that can act as a blank canvas on which to paint big ideas.“Slow, incremental change is not enough in this market,” Siu says. “It’s not enough to save a little money here and there by automating tasks. IT needs to deliver bold ideas to drive the business forward.”
That approach has long made OOCL an IT leader among its peers. The company built an industry-specific enterprise system in the 1990s and has sold copies to two major shipping lines in China and Japan. “Our competitors recognized our advancement in IT, and they needed to adopt our system,” Siu says.
A New IT Foundation
In 2005, OOCL undertook a major initiative to become a more customer-focused organization. In IT terms, that meant transforming its enterprise applications from a client/server online transaction processing (OLTP) system to a service- and message-based architecture. The main goal was to create a better platform for sharing information about shipments throughout their lifecycle. For internal users, that meant access to consolidated, low-latency information at the point of decision. For OOCL’s hundreds of thousands of customers, that meant convenient access to highly detailed shipment status information across multiple channels, including online; call center; and, eventually, mobile devices.
OOCL’s existing enterprise system was developed in Smalltalk, an object-oriented language. The IT team decided to keep that system intact and deploy a standards-based middleware layer that would link the legacy system with new applications and processes and enable developers to continue working with their existing skill sets.
OOCL already used Oracle technology at the database level and decided to turn to Oracle again. The company selected Oracle Fusion Middleware to power its new service-oriented architecture, and Oracle Real Application Clusters (Oracle RAC) and Oracle Coherence to ensure scalability and high availability through transparent failover, load balancing, and fast transaction processing. Oracle Fusion Middleware orchestrates business processes and delivers data from the databases to Java applications. Oracle Enterprise Manager enables system monitoring and management for the database cluster and all middleware components.
Together, these Oracle components ensure that the architecture can scale to more than three times the company’s peak production volume. The benefit of this new architecture is clear: information latency throughout the organization has been reduced from 30 minutes to less than 5 minutes.
After four years of development that involved more than 100 developers, OOCL had in place a new system that smoothly processed more than 1.4 million domain state change events every day. With this foundation in place, OOCL’s IT team had all the tools it needed to begin transforming the way it created the applications and services that are the heart of the company’s competitive differentiation. The key to that transformation: the openness and portability of Java.
Custom Development with Java
Unlike crowded industries such as retail or financial services, the shipping and logistics industry is relatively small. That reality narrows OOCL’s choices when it shops for software.
“There’s no real shipping industry ERP [enterprise resource planning] system available that we can actually take and deploy,” says Belinda So, deputy general manager of information services at OOCL. “There’s nothing on the market for us to use.”
Therein, says So, lies opportunity. “We just do our own. It actually allows high flexibility because there’s no boundary,” So says. “For example, for sales-related applications, there are so many out there and the [internal] customer might say, ‘Why can’t we just look at that and buy that?’ But then when we look at the details of what they want to do, there’s a gap. When we look at pros and cons, we can show them that we can customize to meet their needs.”
Because OOCL’s new standards-based architecture allows developers to continue working with familiar Java objects, the applications and processes that the team dreams up are created with Java. Over the last several years, So and her team have brainstormed with internal customers—including operations, customer support, and logistics departments—defined requirements, and built custom Java applications that perfectly address each group’s unique needs.
Bosco Louie, director of regions management at OOCL, likens this brainstorming to a laboratory in which everyone is encouraged to dream big and all ideas are thrown on the table. His input on IT strategy ensures that the business and operational realities of OOCL are represented in the final rollout of new systems and applications. “We start at a very high conceptual level and eventually will come down to reality,” he says.
For example, So’s team recently completed a project that involved standardization of the sales quotation process. Previously, the quote process was highly manual and required back-and-forth among multiple people in the organization. The final quotes wouldn’t always hit the mark; salespeople might find themselves offering pricing that customers would not accept, which the salespeople could have anticipated if they had had access to historical quote data.
So and her team created an application that tracks pricing history for any given customer and indicates how many quotes a customer has approved or rejected based on certain pricing guidelines. The application provides access to near-real-time data about markets and pricing, which speeds the time it takes salespeople to generate quotes.
“That minimizes lots of handshaking and e-mails with pricing people,” So says. “It’s all through the system, and anyone in the organization can know pricing and quotation information without e-mailing and asking someone for it.” It also helps OOCL to book more shipments faster by providing pricing that customers are likely to accept and perhaps getting cargo to them faster than the competition.
Another custom application developed in Java is the company’s dashboard application. In the past, OOCL users looking for information about a shipment would need to search for it manually and proactively. Today, the Java-based application monitors all shipment lifecycle milestones and pushes information to users, telling them which outstanding bookings require attention.
The application also references rules to determine which users need the information. For example, Person A in San Jose, California, should be assigned all tasks related to a certain shipment unless events occur after hours, in which case Person B, arriving to work in Hong Kong, should receive the notifications.
“Every time a user comes in, there is a dashboard that tells them exactly what they need to do each day to take care of the customer,” So says. By providing the right information to the right person at the right time, OOCL can give customers the kind of high-quality service that will set the company apart from competitors.
Better Intelligence, Better Service
As part of OOCL’s effort to become a more customer-driven organization, the company has placed new energy into understanding customers.
“Different customers have different behaviors,” So says. She contrasts giant customers such as Walmart with smaller companies that might do a single shipment of 20 TEUs. “We need to know their needs to customize services and products.”
With the help of Oracle Advanced Customer Services, OOCL deployed Oracle Business Intelligence Suite, Enterprise Edition to gain that understanding. The teams worked together to identify business requirements, create data schemas, establish development and testing environments, develop dashboards, and design report layouts in Oracle business intelligence applications. Oracle consultants provided OOCL staff with hands-on training for querying the system according to different customer characteristics and generating reports. Today, Oracle Advanced Customer Services maintains a tight relationship with OOCL via a dedicated customer services manager who works closely with OOCL’s senior IT staff.
Now, the company can draw conclusions about customer behavior: Does this customer usually book one week in advance? Two weeks? Do they often cancel? Overbook? So and her team developed an application that captures all data from customer interactions and activities and then provides the results of that analysis.
In addition to different shipping behaviors, customers have different ways of contacting OOCL to track their shipments or ask questions. For example, some customers prefer to interact with OOCL using the call center, while others use the interactive voice response system or the online portal. Oracle Business Intelligence Suite, Enterprise Edition collects data on channel usage, and OOCL uses that data to create customer surveys and refine multichannel services to better meet customer needs.
Oracle Business Intelligence Publisher creates documents related to quote generation. In fact, all documents related to customer interactions are now electronic and tied to automated processes. They are published to a central document repository and then distributed to customers electronically. A customer behavior analysis application can reference that data when generating reports.
Oracle Business Intelligence Suite, Enterprise Edition also gives OOCL a bigger-picture view of cargo shipment patterns and can identify delays at various ports, allowing OOCL to then pass that information to customers. The software generates these reports four times faster than if users were to generate reports manually.
The Path to Recovery
The last few years have been hard on global shippers. Volumes have dropped, but the cost to operate vessels has only increased, making profit margins slimmer than ever. Most carriers, including OOCL, lost money in 2009 and have been striving to recover.
For OOCL, that recovery has come quickly. In the first half of 2010, the company more than doubled the most-optimistic analyst estimates. The company spends more on IT as a percent of total budget than almost all of its competitors, and Siu’s feeling is that this dedication to technology is a major contributor to the company’s success after a difficult 2009.
“It’s very important that the IT strategy be able to focus on improving the business operation,” Siu says. “What we look for is not incremental improvement; we look for drastic improvement. Because if we continue to do minor enhancements, we will totally miss the business.”
From So’s perspective, the most important factor isn’t necessarily how much money the company spends on IT, but that it spends that money well. “Some competitors are five times our size, and they can put a lot of money into their technology,” she says. “We don’t have the same IT budget, but every year we are deploying new technologies to support what the company needs. We are quick to deploy technologies to help the business because technology can really help companies to gain competitive advantage.”