Oracle

Transportation Management
An Overview

Satish Devani
Enterprise Solutions
OTM Overview
 OTM delivers robust transportation planning and execution
capabilities to shippers and third party logistics providers. It
integrates and streamlines transportation planning, execution,
freight payment, and business process automation on a single
application across all modes of transportation, from full truckload to
complex multi-leg air, ocean, and rail shipments

 OTM lowers transportation costs, improves customer service and

asset utilization, and provides flexible, global fulfillment options

 OTM can be used with an ERP/Legacy Order Management system as

well as any commercial best-of-breed or legacy Warehouse
Management System

 OTM, part of the Oracle E-Business Suite, integrates with Oracle

Order Management and Oracle Warehouse Management to ensure
effective fulfillment of customer orders. It also integrates with
Accounts Payable for payment of freight invoices
History…
 GC3 was developed at the end of the 1990’s by a company called
G-Log (Global Logistics)

 Designed from the beginning as a web application – allowing access

by service providers, suppliers and customers via the web

 G-Log was purchased by Oracle - end 2005

 GC3 is now being integrated into Oracle’s software portfolio

 GC3 is Renamed as OTM (Oracle Transportation Management) -

February 2006
Transportation Management

Tracking Planning & Optimization

•Real time Shipment •Load consolidation
status checking and Route planning
•Exception management •Mode & Service
and notifications Provider selection

Process
at
a Glance

Billing & Settlement Booking / Tendering

•Freight Payment •Tendering load
and audit •Full visibility to Tender status
•Cost allocation •Direct link from system to carrier
OTM Key Features
 Web architected complete transportation package

 Deep Domestic and International Planning and Execution

 Adaptive Business processes

 Contract and Rate Management

 Full Logistics Inventory visibility and Event Management

 Constraint based rules such as compatibility constraints, carrier

commitments, location capacity constraints and vehicle availability

 Fully automated Rating and Routing flow

 Cooperative Routing functionality

OTM Key Features (contd…)

 Flexible rating engine for multiple transportation modes (air, rail,

ocean, road), multiple cost drivers (per kg, per piece count, per
mile, per loading meter) and multiple logistics services
(transportation and non-transportation)

 Online status tracking

 Collaboration with Carriers and Trading Partners

 Integration with Oracle Order Management, Oracle Purchasing and

Oracle Warehouse Management for efficient planning of inbound and
outbound deliveries

 Integration with Oracle Accounts Payable for payment of freight

invoices

 Flexible integration with other ERP and WMS applications

OTM Options
OTM provides following integrated options

 Transportation Sourcing

 Transportation Operational Planning

 Freight Payment, Billing and Claims

 Logistics Inventory Visibility

 Forwarding and Brokerage Operations

Main focus of this document will be Transportation Operational

Planning and Freight Payment.
OTM Options
 Transportation Sourcing

This option of OTM streamlines and enhances the entire sourcing

and procurement process

The features and benefits of this option are

o Rapid procurement cycles

o Accurate forecast estimates
o Seamless collaboration with carriers during the procurement cycle
o Highly actionable bid responses
o Low labor requirements to manage the procurement process
o Greater volume leverage through consideration of all freight modes and
geographies
OTM Options
 Transportation Operational Planning

This option of OTM supports all transportation moves, including

inbound and outbound, from simple point-to-point to complex multi-
modal, multi-leg and cross-docking operations.

It empowers shippers and logistics service providers to streamline

transportation processes and meet customer commitments. It
lowers transportation costs, improves customer service, and
provides flexible, global fulfillment options.

The features and benefits of this option are

o Integrate logistics from manufacturing through transport to customers

o Automate planning execution processes to achieve greater efficiency
o Collaborate with suppliers and customers, and carriers to ensure high
quality service
o Provide consolidated information to support cost effective global
shipments
OTM Options
 Freight Payment, Billing and Claims

This option of OTM automates the tedious processes of internal and

external freight payment, customer billing, and managing freight
claims. Using the actual shipment data captured throughout the
logistics lifecycle process, Oracle Transportation Management
ensures that you are paying, billing, and tracking only for the
transportation services that were provided.

The features and benefits of this option are

o Reduce processing costs and error reductions.

o Improve carrier relations via fewer errors, faster payment, and better
terms.
o Improve transportation cost control by keeping transportation
information in a central logistics hub, so you pay the correct amount
100% of the time, eliminating overpayment and duplicate payments.
o Accurately track missed service penalties and surcharges.
o Increase customer satisfaction with true cost-allocation and
reconciliation.
OTM Options
 Logistics Inventory Visibility

This option of OTM facilitates Inventory Management and Vendor

Managed Inventory (VMI) processes and automates the processes
you use to manage logistics inventory and visibility

The features and benefits of this option are

o Reduce inventory cycle time

o Increase automation of the business and inventory rules that drive the
VMI process
o Increase inventory certainty within the supply chain, leading to reduction
in days of inventory on hand
o Reduce administrative overhead to free time for tasks that deliver
business value, such as managing rather than monitoring
OTM Options
 Forwarding and Brokerage Operations

This option of OTM automates the processes used by international

and domestic operations to greatly diminish the labor and cycle
times of most freight forwarding and brokerage operations, while
improving the speed, accuracy, and predictability of the flow of
goods and information that cross international and domestic
boundaries

The features and benefits of this option are

o Strengthen customer loyalty and attract new customers with

customized, flexible, and expanded services, delivered collaboratively
o Drive down costs through improved operational efficiency, better
resource management, and better transportation management decisions
o Increase access to Small and Medium Enterprises market without adding
sales and administration costs
o Expand into global markets with the technology you need to manage
logistics and transportation anywhere in the world
o Increase profit margins by doing more for the customer without adding
to operating expenses
Concept of Domain in OTM
 Domains provide a means to restrict the ability to view, create,
modify and delete data to particular users or groups of users.

 Domains provide the ability to keep databases separate and secure

in a shared, web-based environment.

 Top-level domains and sub-domains, with a variety of access grants,

can be created and maintained.

 A sub-domain represents data that is based on the data in a parent

domain.

 By default, domains have read/write access to their sub-domains,

but sub-domains do not have access to their parent domains unless
it is granted to them.

 Using the Domain Grants option, administrators can grant access

from sub-domains to domains, and between domains for increased
functional security.
OTM Jargons
 Business Modeling is creating a model of your business in OTM.
The objective is to capture the important elements that OTM needs
to implement your workflow

 Business Object is a data item in OTM that represents a piece of

information important to your business model. For example, OTM
represents locations important to your business as a collection of
information about a place – its name, address, time zone,
Lat/Long, etc

Some of the important and most commonly used Business Objects

are described in the next few slides
Important Business Objects
The Business Objects are in BLACK and rest of the information is their hierarchy in
the OTM menu

 Order Management
• Material Management
o Item
o Packaged Item
o Commodity
• Purchase Order
o Order Base
• Order Release
o Order Release
o Simple Order

 Contract and Rate Management

• Service Provider Management
o Service Provider
• Contract Management
o Rate Service
o Rate Offering
o Rate Record
Important Business Objects
The Business Objects are in BLACK and rest of the information is their hierarchy in
the OTM menu

 Asset Management
• Assets
o Equipment
• Equipment Group Management
o Equipment Group
o Equipment Group Profile
o Equipment Group Profile Set

 Transportation Planning and Execution

• Power Data - Location
o Corporation
• Location Management
o Location
• Itinerary Management
o Itinerary
• Shipment Management
o Buy Shipments
Important Business Objects
The Business Objects are in BLACK and rest of the information is their hierarchy in
the OTM menu

 Financials
• Payment Invoice Management
o Invoice
o Voucher
• Payment Rule Management
o Match Rule
o Auto Approve Rule
o Match Validation Rule

 Business Process Automation

• Agents and Milestones
o Automation Agents
Item
Order Management -> Material management

Items are things that you manufacture and sell such as chemicals,
finished goods, raw materials, parts, and so on. You can create an
inventory of items that you typically ship from one destination to
another. Once items are defined, they can be used on orders based on
bulk data or any order base or order release. An item is the lowest
level of detail that you can describe on an order. It identifies the
specific goods or materials that you are shipping

You can create an item master by adding each item individually, or you
can import your entire item master from an external system via
integration
Packaged Item
Order Management -> Material management

Packaged Item is used to specify how an item is packaged and loaded

into ship units.

Packaged Items is where you define the relationships between the

Items, Packaged Items and Packaging units.
Commodity
Order Management -> Material management

Commodity is grouping of items having similar characteristics. Since

the system uses commodity definitions during equipment selection,
one of the things that it should have in common is the equipment type
that the items can be transported in. Using the Frozen Vegetables
example, not only are all the items frozen goods and vegetables, but
they also must always be transported in frozen containers or trucks.

Besides linking commodities with equipment types, you can also select
transportation modes for commodities, as well as specific temperature
controls. In addition to this, you can specify whether a commodity can
ship with another commodity.

Commodities can be included with a rate offering or rate record. By

doing this, the commodity profile (including all profile attributes
created in the Material Manager) is included in the shipment rating
process.
Order Base
Order Management -> Purchase Order

The Order Manager is a repository of orders that represent the

requirement to move freight from one point to another from one
shipping point to one consignee location.

Orders can be described as two distinct business objects: order base

and order release. An order base represents the detailed information
about the order; for example, an order ID, the involved party,
scheduling information, source and destination locations, accessorials,
special services, as well as the content of the order. Order content is
described in terms of packaging (called ship units) or individual line
items.

Once an order base is entered, one or more order releases are created
that signify that an order is ready for shipment. A release is a way of
taking an order and dividing it into one or more individual
transportation requirements that require planning and execution. A
release may be a partial line of an order or several lines or several
partial lines
Order Release
Order Management -> Order Release

Once an order base is entered, one or more order releases are created
that signify that an order is ready for shipment. A release is a way of
taking an order and dividing it into one or more individual
transportation requirements that require planning and execution. A
release may be a partial line of an order or several lines or several
partial lines

An order release always contains at least one ship unit and one line
item. Some details are copied from the order base. Other field values
can be entered to control shipment planning and while some values
are calculated during the order release process.

An order release can inherit most of its data from the order base from
which it was created such as the Order Base ID, Source/Destination
locations, Pickup/Delivery dates and some of the Ship Unit or Line
Item data.
Simple Order
Order Management -> Order Release

A simple order provides a quick way to enter an order without

providing all the details of an Order Base or an Order Release. The
data that you can enter on a simple order is a subset of what you can
record for an order base/release. For example, a simple order allows
one source and destination location as opposed to an order
base/release which can accommodate as many source/destination
locations for each packaged item or ship unit as you need.

When you finished a simple order (base), one order release is

automatically created for all order content (all ship units/line items).
An order release indicates that an order is complete and ready for
shipment planning.
Service Provider
Contract and Rate Management -> Service Provider Mgt.

Service Providers are the companies that move freight from the source
to the destination.

Service Providers are associated with Rate Offerings and, once a rate
has been selected, with Shipments. They are also attached to
Corporations and Locations. Each Service Provider can only be
associated with one Location and one Corporation. Several Service
Providers locations can be attached to a Corporation. To establish
multiple locations for a Service Provider, it is easiest to identify the
Service Provider as Corporation instead of a Service Provider location
associated with a Corporation.
Rate Service
Contract and Rate Management -> Contract Management

Rate service is used to determine the time required to transport goods

from one point to another. Rate service depends on the service type
you choose.

Rate Offering
Contract and Rate Management -> Contract Management

A rate offering is a general contract with a service provider. It may

include multiple charges that provide for a variety of possible
requirements. A single service provider may have several different rate
offerings
Rate Record
Contract and Rate Management -> Contract Management

Rate Records can only be created based on a rate offering. While the
rate offering provides general contract details from a service provider,
a rate record provides specific costing or rating data from one place to
another. The record inherits much of its data from the offering but the
options selected in the offering can be overridden at the record level.

One or more rate records can be associated with a single rate offering.
While the offering provides general contractual details, the record
defines a cost for service between one location and another. A record
relies on an associated rate offering for much of its information but can
override some of the data in the offering, if necessary.
Equipment
Asset Management -> Assets

Equipment represents any mode or method of storage or transport

used for the movement of a shipment from one location to another.
Accurate equipment information is critical to the shipment planning
process, and equipment IDs are used to create equipment types that
are used in Capacity Management.

Equipment Group
Asset Management -> Equipment Group Management

Equipment Groups identify the different kinds of equipment (such as

dry vans, flatbed trucks, container cars, hoppers, tankers, box cars,
and so on) that are used to transport shipments from one destination
to another. An Equipment Group is defined by an ID and description as
well as other attributes that describe the capacity of the equipment (for
example, a 28 foot Dry Van that can handle up to 30,000 lbs)
Equipment Group Profile
Asset Management -> Equipment Group Management

An Equipment Group Profile is used to categorize Equipment groups by

some common attribute or grouping scheme. For example, you can
create a Group Profile called Dry Vans that include the 28 FT Dry Van
and 24 FT Dry Van (and others if you like) Equipment Groups.

Equipment Group Profile Set

Asset Management -> Equipment Group Management

An Equipment Group Profile Set allows OTM to evaluate multiple

equipment options within an itinerary for both the multi-leg and multi
-stop algorithms. You can specify an equipment group profile set on
the leg of an itinerary that supports multi-stop planning. You can
specify a single equipment group profile or a set containing multiple
equipment group profiles and OTM will select the best fit equipment
group from within each profile and rate it. The least-cost feasible
option across all these equipment groups will be chosen.
Corporation
Transportation Planning & Execution -> Power Data -> Location

A Corporation is a record that groups the various locations for each

company.

Location
Transportation Planning & Execution -> Location Management

Locations represent physical places to which an order can be delivered

to or from which an order can be picked up. They include airports,
ports, rail ramps/yards, container pool locations, distributors, assembly
points, plants, vendors, and more. Locations are required when you:
• Plan for a shipment
• Establish rates for a shipment
• Define itineraries
• Create orders
Itinerary
Transportation Planning & Execution -> Itinerary Management

Itineraries determine what route a shipment takes by specifying the

requirements for destinations on shipping legs. For example, itineraries
can define the sequencing priority, rates, mode of transportation,
arrive time ranges, equipment, service provider, and commodity
requirements for a destination location. In addition, itineraries can
model cross-dock and pool activity.

When planning a shipment, OTM lists all the itineraries that are valid
for the shipment, based on the details of the order, and then chooses
the least expensive option. If a valid itinerary cannot be identified, the
shipment can not be created.

When creating an order base or an order release, a fixed itinerary can

be assigned that must always be used when building shipments from
that order.
Buy Shipments
Transportation Planning & Execution -> Shipment Management

Shipments represent the movement of sets of freight from one location

to another, activity at a cross-dock, and non-moving charges
associated with shipping activity. All the details associated with
transportation activity are included on the shipment. For example, the
pickup and delivery times, equipment, transport mode, payment
terms, item detail, rate record, rate offering, accessorial and special
service charges, ship unit, line item, and hazardous material identifiers
are all included in the information associated with a shipment.

In most cases, shipments are created from one or more order releases.
OTM can plan shipments from multiple order releases using the Bulk
Planner. A buy shipment can include one or more orders, customers,
and pickup and delivery locations to produce the optimal process for
shipping goods at the least cost meeting time and safety requirements
for the orders
Buy Shipments (Contd…)
Transportation Planning & Execution -> Shipment Management

When creating a buy shipment, OTM runs processing to associate one

or more order releases with a single itinerary, rate, equipment type,
and a service provider. OTM then determines the route and pickup and
delivery times for the shipment.

While most shipments are created from orders, you can create
shipments manually (Shipment as Work) that do not contain order
information. This type of shipment is not bundled, consolidated, or re
-sequenced.
Invoice
Financials -> Payment Invoice Management

Payment invoices are business objects that document payments owed

to service providers, carriers, and other parties. Bills are business
objects that document payments due from shippers and other
customers. Invoices are buy-side records, and bills are sell-side
records.

Voucher
Financials -> Payment Invoice Management

A voucher is an authorization to pay all or part of the amount due on a

payment invoice. Vouchers are typically created when an invoice is
approved for payment. The actual payment of a voucher is performed
by an Accounts Payable system once the voucher has been issued.
Match Rule
Financials -> Payment Rule Management

Match rules specify the criteria used to automatically match payment

invoices to buy shipments. For both exact and more broadly defined
matches, you can specify the service providers, reference number
qualifiers, and other criteria.

Auto Approve Rule

Financials -> Payment Rule Management

Auto approve rules specify the limits, ranges, and other criteria used to
automatically approve invoices for payment. For both cost and weight
approval, auto approve rules compare payment invoices to their
matched buy shipments.
Match Validation Rule
Financials -> Payment Rule Management

As part of the Payment Rule Manager, Match Validation Rules and

Match Validation Rule Profiles are used after a shipment is matched to
an invoice. The match is then validated by comparing reference
numbers on the orders and shipments to reference numbers on the
invoice.
Automation Agents
Business Process Automation -> Agents and Milestones

Agents are key components of key configurable OTM Processing. An

agent listens for an OTM event, verifies a user-defined condition, and
executes one or more actions that you choose from an action library.
For each business object, you can select specific events,
conditions and actions. You can also specify the actions to take
if errors occur during processing.

An automation agent operates against a specific OTM business object

such as an order base, order release, shipment, etc., and includes a
list of events that can occur, optional conditions that are checked,
actions that perform an OTM process, and error controls to alert you
when problems are encountered with the agent.
Automation Agents (Contd….)
Business Process Automation -> Agents and Milestones

OTM provides several public agents for controlling how order

modifications are made via the integration system. These modifications
can include setting external statuses to determine the credit status of
a location or an order. You can also use public agents to process a
shipment entered manually without a related order. You can use these
agents as they are delivered or have your database administrator
modify them for a specific domain. You can also create your own
agents to configure OTM processes according to your needs.
Planning & Optimization Process
Inputs
Itineraries Order Releases Commitment / Allocation

Equipment Schedules OAG Rate Offerings Location

Capacity / Vessels etc / Rate Records Requirements

Planning / Optimization Engine

Order Mode Multi Leg Resource
Consolidation Selection Planning Allocation

Shipment Itinerary Container Scheduling

Consolidation Flags Optimization

Rating Service Provider

Selection

Output
Planned Shipments
Shipment Planning in OTM
 Buy Shipment can be planned in OTM in one of the following ways.

• Bulk Plan - Buy

• Direct

• Manual

• Multi-stop

There are few other ways in which Buy Shipments can be planned,
but these are the most commonly used methods of planning
Shipment.
Bulk Plan - Buy
 Bulk planning is the consolidation of two or more orders into one or
more shipments.

 When you create a shipment from an order release, OTM

determines the equipment group, costs, stop times, the stop
sequence, and itinerary for the new shipment according to the rules
of shipment planning logic.

 Bulk Planning determines the optimal shipment plan for multiple

order releases by building direct or multi-stop shipments with the
least cost.

 If the selected orders do not all fit on one shipment, additional

shipments are created.

 OTM does not automatically split orders to maximize equipment

capacity, but tries to put as many whole orders as possible on a
piece of equipment.
Bulk Plan – Buy (Contd….)

The following represents the standard routing of orders through the

bulk plan process

 Bundle Orders that have same Source and Destination

 Where feasible, OTM builds direct shipments

 Consolidate remaining orders into multi-stop shipments (If there

are valid itineraries and rates that support multi-stop planning)

 Remaining Orders will then be routed through a consolidation or

deconsolidation pool (if feasible)

 OTM then attempts to convert pool shipments to multi-stop

shipments if it would be more cost effective

 Any remaining orders will be routed through a cross-dock

Direct Planning
 Direct planning can be used to create shipments from one or more
order releases

 While creating s Shipment from Order Release, OTM determines the

equipment group, costs, stop times, stop sequence and itinerary for
the new shipment according to the rules of shipment planning logic

 While Direct planning, we can constrain a shipment to use specific

equipment by entering an equipment group or equipment group
profile. In this case, OTM does not determine the best equipment
but assigns the equipment that you supply.

 All order releases must pass the bundling rules during shipment
planning before a shipment is created using Direct planning. In case
bundling is not possible, a bundling error message is received
Manual Planning
 Using manual planning, a shipment can be created manually for an
order release by ignoring the standard shipment planning logic

 During manual planning, one can specify the Transportation Mode,

Rate Offering, Equipment Group, Service Provider, Estimated
Service time, Estimated Cost and perspective (Buy or Sell)

 If a Rate Offering is specified, any rate offering constraints such as

Min/Max weight are ignored

 If Estimated Service time and Cost are left blank, the system will
calculate these values on the new shipment.

 A Service provider must be entered if the estimated service time is

not entered
Multi Stop Planning
 This option is used to create Multi-Stop shipments from order
releases with different source and destination locations

 A multi stop shipment is a shipment that utilizes a single service

provider and equipment with one or more pickup and delivery
stops.

 A multi stop shipment is built from multiple order releases and

there must be an itinerary and rate offering that can support multi-
stop planning

 While doing this, OTM determines the equipment group, costs, stop
times, stop sequences and itinerary for the new shipment according
to the rules of shipment planning logic
References
 http://www.oracle.com/applications/scm/transportation-
management/index.html
 OTM Version 5.5 online help
Thank You