Oracle Modern Supply Chain Solutions

Modern Supply Chain Solutions Empower The Age Of The Individual

Leveraging Logistics, Transportation And Distribution To Deliver More Personalized Experiences



Supply chain management (SCM), once considered solely a cost-saving, back-office function, has risen to the forefront of the enterprise as a key growth enabler. To help nurture business growth in a digital world, today’s advanced, cloud-based SCM solutions are designed to sense and respond to demand and anticipate purchases.

There’s a new focus for organizational SCM that is influencing these new strategies. It’s called Era “I”1 — The Age of The Individual. A strong majority, 77%, of retail executives said they know customers want more individualized experiences, and these executives believe they would see a 10% revenue lift if they improved their approach to personalization, according to recent Oracle research.

However, targeting customers at a more personal level adds stress to the retail supply chain — stress that current business processes and the underlying legacy systems struggle to handle. As retailers are evolving their business processes to respond to this customer expectation of individualization, they are turning to cloud-based, end-to-end SCM solutions that provide more advanced toolsets and greater cross-functional integration.

1. http://www.oracle.com/us/industries/oracle-era-ready-anything-2969053.pdf


The Era I Enterprise: Ready for Anything?  

77% of retailers believe that when it comes to meeting customer demand, it’s all about the individual.

10% is the lift in revenue resulting from efforts focused on meeting the needs of the individual.

Source: Oracle Research

Setting The Stage For Advanced SCM: Challenges To Overcome

With access to a seemingly unlimited pool of data from outside the walls of the organization — including social media, product performance and product availability — retailers need to take a new approach to SCM. It’s now an Outside-In approach vs. Inside-Out. Specifically, factors such as consumer demand and product performance are now influencing inventory and shipping decisions.

It’s no longer a decision-making process based on past performance and gut instinct. Today’s forward-thinking retailers need to be able to anticipate customer demand across all channels, then use that information to alter shipping decisions, adjust inventory levels and drive promotional activity.

To be sure they’re working toward a common goal with suppliers, retailers have to shift their traditional mindset of keeping all data in-house, to a mindset of collaborative planning and forecasting. For example, Walmart has worked with Merck to improve the sales and availability of allergy products by sharing seasonal pollen data, allergy predictions and social media information about consumer allergies. The collaboration has helped to ensure that the right products are available to consumers at the right time and place. This tactic has helped boost sales and improve on-shelf product availability.

The Cloud Is A Game-Changer For Supply Chain Operators

58% of organizations see the cloud as "disruptive and important," denoting a critical new positive force for their operations.

86% of organizations see the adoption of cloud computing growing over the next six to 10 years.

Source: SCM World, Annual Future of the Supply Chain survey, and MHI Research, via Inspirage

The Emergence Of Cloud-Based Supply Chain Solutions

33% of companies are using the cloud for supply chain management

Source: SCM Races Into The Cloud, Gartner, via Logistics Management

Of logistics professionals already using or considering cloud-based applications:

56% 

say that the decision is driven by the software's easier and faster attributes, relative to other software.

51% 

of shippers say they’re attracted to cloud’s lower total cost of ownership (TCO) opportunity.

45% 

say that the capital expense is lower.

25% 

cite their own lack of IT expertise as a reason to implement cloud-based initiatives.

The Roadmap To Advanced Supply Chain Management Integration: 4 Key Components
1. Transportation Management

Managing multiple transportation assets while juggling available vendors can be a daunting task. Retailers also must contend with a plethora of freight rates and the challenges of auditing freight costs, optimizing routing and selecting intermodal options. A comprehensive SCM system for transportation management can deliver multiple business benefits. With careful data utilization, analytics help reduce costs, manage vendor compliance, catch billing errors, negotiate better freight rates, and ultimately improve customer service and profitability.

The Era I Enterprise: Ready for Anything?  

A transportation management system can save companies approximately 8% in freight costs.

Source: Arc Advisory Group, Transportation Management Systems Market Research, Five-Year Market Analysis And Technology Forecast Through 2021

With a fleet of multiple assets and a complex network of primary and secondary distribution centers, FEMSA is using cloud-based solutions to better manage its supply chain.

FEMSA is a Mexican multinational beverage and retail company headquartered in Monterrey, Mexico. FEMSA Logistica, its subsidiary, manages FEMSA's logistics operations throughout Mexico and Latin America. The company is one of Mexico's largest dedicated fleet carriers, servicing customers like Coca-Cola and Heineken.

FEMSA sought better coordination between fleet management and transportation services. The goal was to optimally coordinate numerous distribution points between secondary distribution centers, mom-and-pop local retailers and, ultimately, the buying customer.

FEMSA Logistica leveraged Oracle Transportation Management Managed Cloud Service (OTM Cloud) to better plan and manage its routes and deliveries. With more than 50 distribution centers and more than 4,000 trucks on the road on any given day, FEMSA Logistica relies on OTM Cloud to achieve a 95% on-time delivery rate for its more than 8,000 retail deliveries per day. The complex web of primary and secondary distribution centers, and the many channels through which they operate, was a challenge to accommodate — but OTM is helping to bring order and control, and speed deliveries within the vast and complex distribution network.

2. Order Orchestration

In today’s convoluted retail environment, orders come in from multiple channels and touch points. They can be unique and require special terms, conditions and requirements. And customers are unforgiving if there is a disruption, glitch or unforeseen problem with an order. They expect orders to be delivered intact and on time.

With a cloud-based platform that aggregates real-time and historical information about orders, problems may be anticipated, planned for and avoided; shipments arrive quickly and on time, return rates are reduced and overall order profitability is increased. A cloud-based order orchestration solution can scale up or down to handle different order sizes efficiently, helping to reduce total order management costs.


92% of U.S. customers consider delivery within 2 days to be “fast delivery.”


18% of consumers consider delivery within 5 to 7 days to be fast.


Source: Criteo e-Commerce Industry Outlook

When demand is seasonal, managing orders, destinations, pricing and returns is no small feat. A cloud-based transportation management system helps cut through chaos to support seamless supply fulfillment and meet demand.

A large global food company was suffering with a logistics operation that lacked centralization and functioned using archaic processes, which included paper spreadsheets at some distribution centers. To improve overall operations, the company sought to digitize logistics capabilities to add visibility, while optimizing distribution costs and boosting profit.

The company transitioned to Oracle Transportation Management Managed Cloud Service (OTM Cloud) to expand visibility into, and control over, logistics for the company’s baked goods production facilities.

Fully implemented in just four months, the new solution was able to meet the demand of the company’s high-volume peak season. Following the implementation, the company reported reduced fuel consumption and carrier time in transit, which translated into significant cost savings. In addition, company operations now have central visibility and control so executives can monitor distribution and make better-informed decisions.

3. Omnichannel Planning

To satisfy today’s omnichannel shoppers, retailers must manage inventory across multiple locations, assess planned versus actual orders and historical demand, and build a more efficient sales network. Cloud-based solutions bring all the data together and allow team members from different business units to access the same information. From their disparate locations, planners, logistics executives and fulfillment teams — as well as vendor partners — can now make cohesive business decisions based on the same data.

For larger global organizations, these cloud-based solutions enable local planning groups to exist in different countries and locations around the world, working in the local markets they know best.

For smaller, SMB or mid-size companies, cloud-based SCM allows them to incrementally deploy the services they need quickly, rather than spend months to deploy a full-scale ERP solution.

If retailers resist the move to incorporate omnichannel inventory planning into total omnichannel strategies, business efficiencies and the bottom line will suffer. While omnichannel marketing can increase shopper awareness of products, if the inventory is not available at the right place and time, those sales are forfeited, leaving shoppers dissatisfied (see chart).

Inventory Planning Can Help Match Demand To Supply

Omnichannel has helped retailers grow sales, but the lack of a planning foundation has led to efficiency declines.

Sales Grew While Inventory Turns Fell



Source: 2014 Capital IQ and 2014 Internet Retailer Top 500

Coordinating shipments with carrier availability, a dispersed distribution network and a customer base with high expectations is a daily fact of life for the fast-growing a large supermarket chain. But a cloud-based warehouse management solution has simplified these processes.

With more than 70 retail locations offering different products based on store format and size, the retailer was challenged to find an SCM solution that successfully and intelligently links manufacturers, retailers, wholesalers and 3PLs — regardless of their size and complexity.

The retailer implemented Oracle Warehouse Management Cloud, which included a software-as-a-service (SaaS) pricing model. By choosing this enterprise solution, the company avoided upfront software costs, maintenance fees and disruptive on-premises installation. SPSA pays only a monthly fee based on the volume of logistics services utilized. Employees access the new warehouse management system on tablets and mobile devices on the warehouse floor.

The implementation has delivered a number of key benefits for the retailer, including improved business efficiencies, shipping productivity and product traceability, that have resulted in improved customer satisfaction.

4. Prescriptive Analytics

Big data has become the foundation for decision-making in retail. By aggregating that data, retailers can use prescriptive and predictive analytics to recommend actionable strategies based on likely outcomes. When data is intelligently applied against algorithms using statistical methods, probable outcomes are based on fact rather than intuition.

Prescriptive and predictive analytics can enable business leaders to arrive at vital insights, such as where shipment slowdowns occur, what products arrive damaged and where adverse weather could impede delivery.

Cloud-based supply chain solutions enable data to be aggregated via IoT, database management, sophisticated algorithms and, ultimately, dashboards and granular information that was previously unavailable.

Change is an ever present fact in today’s digital world. Much of that change is driven by new and innovative technologies that offer further opportunities to digitally transform your supply chain. These disruptive technologies include Blockchain, The Internet of Things, Big Data, Artificial Intelligence, Augmented/Virtual Reality, Machine Learning or 3D printing, to name but a few of the most promising ones that are reshaping the ability of our customers to innovate, become more agile and deliver personalized experiences.


35% of organizations will use prescriptive analytics by 2020, up from 10% in 2016.

The prescriptive analytics software market will reach $1.1 billion by 2019.

Source: Gartner, Forecast Snapshot: Prescriptive Analytics, Worldwide, 2016

When an end-to-end solution is used that aggregates comprehensive data, queries can be run and utilized to select "sweet spot" options for planning shipments.

Knoll, a leading manufacturer of high-end office and home furniture and long time Oracle Transportation Management customer, recently transitioned from an on-premise implementation to the Oracle Transportation Management Managed Cloud Service solution (OTM Cloud).

With the advent of cloud technology, Knoll sought better efficiency through cloud benefits — no servers to purchase, replace or maintain. Oracle provides all the upgrades and software patches that apply.

Finding the "sweet spot" of cargo loading, based on shipments, destinations, and delivery data can be a challenging endeavor. The needed to run queries to see if shipments qualify for truckload, or less-than-truckload service, and choose accordingly. But it got easier with the new software, as it helps them run queries to find that sweet spot, and make quick and informed decisions.

“By implementing Oracle Transportation Management Cloud, “we will achieve 10 percent of our planned two million dollars in logistics savings by the end of 2017,” said Brian Grabowicz, Oracle Business Analyst at Knoll.

Assessing Cloud-Based Supply Chain Management Systems

In assessing the viability and suitability of a cloud-based supply chain management solution for your enterprise, here's a checklist of key questions to discuss and consider:

  • 1. What is the most logical approach to rolling out a cloud-based supply chain management solution? What is the typical implementation timeline?
  • 2. What do I need to build a business case to justify the transition to a cloud-based system? Will the business case stand up to an audit?
  • 3. What security measures must be implemented with the introduction of a cloud-based supply chain management system, and who bears the responsibility for the integrity of the security measures set in place?
  • 4. Where are the greatest opportunities for savings and efficiencies with the adoption of a cloud solution?
  • 5. How will customers and end-users benefit from a new cloud-based system?
  • 6. What about scalability? Can the solution scale to my present configuration, and how about future configurations?
  • 7. What are the pricing options, and how do they match up with my existing costs? Is there low-hanging fruit of benefits and savings to help me sell a new solution internally?
  • 8. What are my risks in implementing a new platform? How can I mitigate such risks, if any?
  • 9. What about documentation, compliance and regulatory oversight? Will the new solution help?
  • 10. How will emerging technologies like Blockchain, the Internet of Things (IoT), machine learning and artificial intelligence (AI) benefit the supply chain?

Conclusion:
The New End-To-End Supply Chain Is Demand-Driven, Not Supply-Driven

Today's consumer is an omnichannel shopper, living in a world where products ship and arrive in record time, and at a location of choice. Successful retail organizations must tap into new ways to meet this demand before their competitors do.

SCM solutions, based in the cloud, change the whole landscape. They help retailers and their suppliers compete and meet the demands of customers in the age of the individual. Modern cloud SCM tools use real-time data — from both inside and outside the organization — to deliver prescriptive and predictive decisions that improve business efficiencies and satisfy the demands of today’s digitally savvy and impatient shoppers.