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Welcome to the Oracle Transportation Management Release 6.1
Transfer of Information Functional Overview for the Sourcing

This session will prepare you to:
Identify the new functionality included in this release
Learn how to configure the new functionality
Find additional release information and resources

This session covers the following new or changed features for Oracle
Transportation Management 6.1:
Sourcing overview
Forecasting demand
Inviting carriers to bid
Carrier bids
Bid analysis
Building rates
For each feature, we will review the following:
A description of the feature and the business value it provides.
Steps for setting up and using the feature.
At the end of the session, we provide a list of resources where you can
find additional information.

First well discuss a brief overview of the sourcing functionality.

This session summarizes the sourcing functionality in Oracle
Transportation Management 6.1. The new major enhancement is
support for ocean projects using arbitraries. OTM now provides
sourcing support for when you purchase your ocean and drayage
services from one carrier, be it a 3PL or a steamship line. As of OTM
6.1, sourcing now supports truckload, intermodal, and ocean arbitraries.
Sourcing helps you to:
Determine what lanes for which you need bids
Send the bids to the appropriate carriers
Receive the carriers responses
Analyze the carriers responses
Award the bids

The major steps of the sourcing process have not changed in OTM 6.1.
The major steps are:
Defining your lanes and forecasting demand on those lanes
Defining the carriers to invite to your project and the cost components you want to
consider in the project
Sending out the carrier response template to your invited carriers and waiting for
their bid responses
Analyzing your bids in multiple scenarios to consider more or less business
And finally, making a decision of which bids to accept and building OTM rates
based on that decision

Comparing these steps to the main menu for sourcing, you will see that
they match up well.
You can start with some setup steps or only create them when needed.
You define your lanes and forecast demand through shipment history or directly as
a lane summary.
You define your project and bid round including the selection of carriers to invite.
The carriers bid and send their bids back to you.
You analyze the bids in different scenarios and pick a solution.
Finally, you turn your chosen solution into rates for your project.
Lets look at each of these steps in greater detail.

Lets get into the details of the first major step: forecasting demand.
Your first goal is to describe the lanes for which you want to receive
bids and the demand you have on those lanes. You do this in a lane
summary. How you get there depends on the data with which you start:
If you have shipments in OTM, you can import these and let sourcing summarize
the data for you.
If you have shipments in another TMS, you can upload a CSV file with the
shipment data and let sourcing summarize the data for you.
If you prefer to summarize the demand yourself, you can upload the data in four
CSV files (i.e. x_lane, lane_summary, lane_summary_stat, and

You can also define any lane attributes.
You can then refer to these attributes in your cost model; publish them
as part of the carrier response template; and, as a buyer, view them in
the lane summary. For example, you can define accessorials that occur
on this lane and if relevant, their average duration. This duration then
feeds the calculation of the computed cost much like the distance of a
lane does.
To access the Sourcing Attributes tab on the Lane Definition page, click
Shipment Management > Power Data > Geography > Lane Definition.

If you forecast demand using shipments in OTM, you define the
shipments to import into your shipment set criteria and then run the
Build Shipment Set action. This creates a sourcing version of each
shipment and associates those shipments with your shipment set
If you forecast demand by uploading shipment data from another TMS,
you define the shipments you want to work with in your shipment set
criteria and then run the Assign Shipment Set action. This associates
those shipments with your shipment set criteria.
The Build Shipment Set and Assign Shipment Set actions are available
through Sourcing > Historical Shipments > Shipment Set Criteria.
For ocean shipments, you want to setup the following data on your
shipment set criteria:
Specify a Mode Profile ID which includes an ocean-based transport mode such as
Select a Shipment Type of OCEAN.
Decide whether to include the drayage legs or not under the Arbitrary section.
Selecting Arbitrary Shipments includes the drayage legs while selecting Port
to Port Shipments would exclude the drayage legs. The thing to note here is
that sourcing only handles drayage legs that are defined as arbitraries. In
other words, multi-leg itineraries potentially allowing for different carriers to
service the drayage legs and the ocean legs is not supported by sourcing.

If you have shipment history that sourcing should summarize, you can
define a lane summary criteria. This allows you to:
Include as many shipment sets as you need
Filter out shipments in the shipment sets you include
Define if your lane summary should summarize your demand by year, week, day,
or anything in between
To access the Lane Summary Criteria page, click Sourcing > Lane
Aggregation > Lane Summary Criteria.
For ocean shipments, set the Shipment Type on the Lane Summary
Criteria page to OCEAN. Once you have defined your lane summary
criteria, the Build Lane Summary action summarizes the data for you.
To view the results, use the View Lane Summary action. The results are
shown on the next slide.

When you select the View Lane Summary action, OTM displays the
results as shown on this slide. If you uploaded your lane summary into
OTM, this is the point where you join the main sourcing process.
The lane summary shows you the lanes, their characteristics, and the
demand on each lane. If you want to make quick modifications to your
lane summary, you can edit the demand on an existing lane, add a new
lane, or even select multiple lanes and adjust the demand by a
There are differences between ocean-based lane summaries and land-
based lane summaries:
Ocean-based lane summaries have more columns to describe the drayage lanes.
Ocean-based lane summaries also distinguish between demand using different
equipment and moving on different drayage lanes. This results in the same ocean
lane appearing multiple times to describe the demand specific to different
equipment and drayage lanes.

Next, lets discuss how to invite carriers to bid.
You need to define your carriers before you define your project and bid
round, which is where you specify the carriers to bid. You can re-use
the same service provider records you already have in OTM and add a
sourcing-specific contact and corresponding email address. Currently,
sourcing only uses email to send bids to carriers.
To access the Service Provider Manager, click Contract and Rate
Management > Service Provider Management. On the Communication
and Remarks tab, you can specify your sourcing contact. You can also
access the Contact Manager from here to add additional details to the
sourcing contact such as email address.

When defining your service providers in the Service Provider Manager,
you can also define sourcing attributes on the Service Provider tab.
These attributes are:
Minority carrier
Incumbent carrier
Tier. For example tier 1, 2, and 3 carriers.
Scorecard Value. You can populate this based on how well you perceive this
carrier to perform. Scorecard values must be manually entered and do not
synchronize with FTI.
EPA SmartWay Shipper Index Factor. This is a United States government
evaluation of truckload carriers.
The purpose of these attributes is to allow you to add business
constraints that affect your solutions.

Your sourcing project is the overarching object that defines what you
want to happen. You can define the demand for which you will request
bids, the carriers to invite, the equipment to allow, and how you want to
calculate costs to compare between bidders.
To access the project, click Sourcing > Bid Creation > Project. This slide
displays the Project tab.

On the Project Details tab of your project, you define the accessorials
you want to include and who defines the costs, you or the carriers. For
ocean bids, you can define how the arbitrary lanes should be rated, flat
or per distance.

Going back to the Project tab on your project and thinking about an
ocean project, your constraint set and cost model will need to be
different than for other modes.
The constraint set needs to include an ocean transport mode such as
VESSEL-CO and your cost model needs to consider your ocean rate
structure. For example, you may want to include your arbitrary rates in
your cost model.
A default cost model is not provided for ocean so lets take a look at an
example on the next slide.

This slide displays a simple cost model that charges a flat charge for
the ocean leg and separate arbitrary charges for each drayage leg. In
OTM, these arbitraries are modeled as special services.
If you worked with cost models in OTM 6.0, you will notice that they
have become easier to define. The cost model now automatically picks
up the basis youve defined. For example, if you define an accessorial
as per distance, your cost model only needs to include the accessorial
code. You do not need to multiply it with the distance in the cost model.
You can also make individual components of your cost model
conditional on attribute values from bids, lanes, and carriers. For
example, only apply an accessorial charge if the lane is marked as
transporting hazardous material.

Leaving the project and moving on to your first bid round, you will notice
that your first bid round has been automatically created for you based
on the information you provided in the project. For example, OTM
defaults the bid round close date to 30 days after the bid round start
date. If you prefer, you can override any information before continuing.
To access the bid round page, click Sourcing > Bid Creation > Bid
At this point you want to perform two actions:
First, create the carrier response template where the carriers will enter their bids
Second, send out the invitation to bid to the carriers you have included in your bid
rounds constraint set
Lets discuss each of these actions in greater detail.

When you trigger the Create Carrier Response Template action from
the bid round page, you can create a new template or re-use an
existing one. On this slide, you are creating a new template.
If you want to re-use a template in the future, make sure you create a
new CRT Configuration ID and then click Save CRT Configuration.
To generate a template, click Generate Carrier Response Template.

When creating a carrier response template (CRT), you can:
Change the sequence in which the CRT displays the columns using the Seq No
Select enables you to select a column to include its data in the CRT. Note the
asterisk next to certain columns. These columns are required and cannot be
Hidden enables you to hide a column but still include the data in the CRT. You can
do this for any data that our sourcing software requires but the carriers do not
need to see. Examples are domain name, lane ID, and maybe even the
transaction code. The transaction code is the same as everywhere else in OTM so
I is for insert, IU is for insert or update, and so on.
Locked enables you to lock a column to prevent carriers from accidentally
changing its data. This only works as long as the spreadsheet is protected. There
are cases where the carrier must unprotect the spreadsheet to enter perfectly valid
data. If the carrier must unprotect the spreadsheet, the default password is <no
password>. You can change this in Microsoft Excel before sending out the
spreadsheet if you do not need to have your carriers enter bid packages or change
equipment for example.
Finally, you can assign each column a background color, text font, and style. You
can use this to make it obvious which columns the carriers should add data to
versus the columns that are informational only.

Aside from highlighting the most important columns, you can make sure
to display those columns close to each other. After generating the CRT,
you can also change the width of columns to match your data. Note that
there are tooltips for each column that you can edit to describe each
column in detail.

When you have created all required documentation including the carrier
response template, instructions, and contact information, you are ready
to invite your carriers to bid. The Send Bid Invitation action on the bid
round page sends an email to the sourcing contact on each service
provider in your bid round. Make sure to upload all documents you want
to pass on to your carriers using the Attach Documents field.

In case you have additional instructions or reminders to pass on to all or
some of your invited carriers, there is also a Send Notification action on
the bid round page that allows you to send emails with additional text
and attachments.

Next, lets talk about the data that carriers see in the bids and how they
can respond to a bid invitation.
When the carriers are ready to bid, they can open the carrier response
template in Microsoft Excel. There are three tabs to look for:
The first and most important is the tab where the lanes and their demand are
shown. This is also where the carriers enter the components of their bids. In this
example, the template shows the most important columns in green.
The second tab is only for ocean projects. Here the carriers can see the locations
that make up a drayage lane.
The last tab contains valid values for columns the carriers might need to change.
For example, if you allow carriers to bid on different equipment, this will list the
equipment that you have allowed in this bid round.

When a carrier uploads their carrier response template, the most
important task for sourcing is to compute the cost of each bid. For
example, sourcing needs to calculate the cost of transporting one
shipment using a bid of $0.93 per mile and a $20/hour accessorial. To
be able to do this successfully, each bid is first validated for common
mistakes. Specifically, sourcing checks that the:
Transaction code is I, U, IU, or D.
Transport mode, equipment group, and service provider are part of the constraint
Transit days, transit hours, and transit minutes are whole numbers.
Flat cost and variable cost are numbers.
Currency is a currency defined in OTM.
Minimum shipments requested is less than maximum shipments requested. If the
project is percentage based, both numbers are less than 100%.
Bid sequence number is a whole number.

The process of bidding is designed to be a self-service tool for carriers.
As a buyer, you provide each carrier with a user account in the
SERVPROV domain. This can be the same account used for tender
responses in OTM. Since each carrier logs in as a separate user in the
SERVPROV domain, the system automatically knows the carrier that is
bidding and can populate this for each uploaded bid.
To upload the CRT as a carrier logged into the SERVPROV domain,
click Sourcing > Bid Creation > Upload Bid Response Bid. Select the
file you want to upload and click Upload. OTM then displays the Bid
Round ID and the status of your bids.

When a carrier has successfully uploaded his bids and made sure they
are correct, the carrier must commit the bids. By committing the bids, a
carrier is setting a status of COMMITMENT_COMMITTED on each bid.
To commit the bids as a carrier logged into the SERVPROV domain,
click Sourcing > Bid Creation > Bid. Enter your search criteria such as a
Bid Round ID and then select the Commit action.
OTM displays a confirmation page specifying the number of bids found
and asking if you want to proceed. When you click OK, the Bid Status
Change Results page is displayed.
Each service provider is expected to commit their own bids but the
buyer can do it for them in the bid round.
Note that there is an incorrect label on the Bid Status Change Results
page shown at the bottom of the slide. The column heading says Bid
Package ID but the data in this column is the Bid ID.)

While the carriers are entering their bids and you get closer to your
anticipated end date, it is good to see the bids that carriers have
entered and how many lanes have received bids. The Carrier Response
Analysis action helps you do this. You can track the carriers that have
not yet bid so you can give them a call. You can also look at additional
details for each bid that has been entered to see if they are in the range
you expect.
The Carrier Response Analysis action is available within the Sourcing >
Bid Creation > Bid Round menu option.

While it is not strictly needed, you can close a bid round and prevent
carriers from entering any more bids in this particular bid round. If a
carrier tries to upload bids into a closed bid round, they will see an error
message instead of being able to upload their bids.
The Close Bid Round action is available within the Sourcing > Bid
Creation > Bid Round menu option.

Next, lets discuss how to analyze your bid.
You are almost ready to start creating scenarios and finding solutions.
But, just like carriers commit their bids, you, as a buyer, explicitly need
to include the bids that the solver can consider. You can always include
all bids.
To include the bids, click Sourcing > Bid Creation > Bid. Enter your
search criteria. In this example, you have entered a specific Bid Round
ID. Then, click Actions > Bid Include.
OTM looks for a status of BID_IN_INCLUDED to determine if a bid
should be included. The solver will only consider bids that are both
committed and included.

A scenario defines rules for finding the best combination of bids. If you
do not define rules, OTM finds you the cheapest possible solution which
is a good place to start. It is a good idea to create multiple scenarios,
one for each set of rules, so you can compare the scenarios and find
the point where rules are costing you more than you are willing to pay.
To access the scenario page, click Sourcing > Bid Analysis > Scenario.
On this slide, you can see the Scenario edit page. As you can see, you
must specify a Bid Round ID on the scenario. Then, you add different
parameters and rules to each scenario. The parameters you include
control how long you want the solver to run before stopping and how
detailed the solver should be in finding the absolute cheapest solution.
To start the solver, click Actions > Solve Scenario.

There are multiple ways to look at a solution.
First, you can see the scenario against which you run the solver. After
running the solver, the system displays the Solution Summary shown at
the top of the slide. From there you can drill down to each Solution
Detail as shown at the bottom of the slide.
The output from the solver is the solution detail. There is one solution
detail for each bid that gets awarded business.

There are also multiple reports that allow you to see different aspects of
a solution. There are reports focusing on how awards are distributed
among lanes or among carriers. You can see where rules forced the
solver to use a higher bid. You can identify bids that are suspiciously
different than most other bids and might be incorrect and so on.
To access sourcing reports, click Sourcing > Reports.

As stated previously, you can have different rules for each scenario. But
what are rules and what can you do with them? Rules are business
constraints that the solver must obey before picking the cheapest
available bid. For example, you may have a rule stating that you must
spend at least a million dollars with a service provider but also always
use at least two carriers on each lane.
Other rules enable the solver to interpret bids as cheaper or more
expensive. For example, you might favor incumbent carriers and you
would only consider a new carrier if they are at least 5% cheaper than
your incumbent carriers. Then you can create a rule that favors bids
from incumbent carriers by 5%. The solver will see bids from
incumbents as 5% cheaper than they really are and award accordingly.
When building the rates, sourcing will, of course, use the actual bid.
You define all your rules in a rule set. To define a rule set, click Sourcing
> Setup > Rule Set. Once you define a rule set, you can attach it to
your scenario.

If you attach your rule set to a scenario, sourcing applies your rules to
all lanes in your scenario. You can also make rules apply locally to a
lane or a group of lanes. You would attach the appropriate lane
definition or rate zone profile (that is, group of lanes) to your rule set.
You can access your lane definitions and rate zone profiles through
Shipment Management > Power Data > Geography.
You can apply different rules to all three levels at the same time. If there
is conflict between multiple rules, the most specific rule wins. That is, a
lane rule wins over a group-of-lanes rule and a group-of-lanes rule wins
over a scenario rule.
For example, you have a scenario rule with a maximum of three carriers
per lane but you also have a lane rule defining a maximum of four
carriers per lane. Sourcing will keep the solution to three carriers per
lane on all lanes except the one lane where you allow four carriers.

When you have a solution you are happy with, you can notify the
awarded carriers using the Notify Awarded Service Providers action.
This sends a form email to the awarded carriers with a summary of
what they have been awarded.

If your sourcing process leads to a final face-to-face negotiation where
you need to make manual updates to the awards, you can do so.
To view the solution and make manual updates, click Sourcing > Bid
Analysis > Solution Detail. You can adjust the calculated awards
accordingly and then mark those awards as fixed. You can then run the
solver again to find the best solution given the new, fixed awards.
This may be the end of your sourcing process. But if you are using
OTM as your TMS, you can also use your awards to create operational
rates. This is discussed in the next section.

Finally, lets discuss how you can build operational rates from your
To make sure you do not accidentally build rates for the wrong awards,
you need to set a status on the winning bids from which you are going
to build rates. You can do this in one of two ways:
Use the Set Bid Publish Status For All Bids action on the scenario as shown at the
top of the slide or
Use the Change Publish Status action on the bid as shown at the bottom of the
These actions set the BID_PUBLISH status on the bid to

Since you may have many scenarios and solutions for the same bid
round, you define which solution you want to use for this bid round.
The build rates process creates a rate record for each award but also
needs to create a rate offering for each carrier. To define what this rate
offering should look like, you create a rate offering to act as a template.
Even though the rate offering manager forces you to enter a service
provider ID, sourcing will replace this value with each of the winning
service providers.
When this is done, you are ready go to the project for the last steps.

On your project, make sure your parameter set has the desired values
for your type of rates. You need to ensure the rate record cost that
sourcing creates matches the rate basis you need. For example, a
typical distance-based rate uses a basis of SHIPMENT.DISTANCE and
MI for mile.

You are now ready to build rates from the project. The Build Rates
action uses the template rate offering you previously created and
inserts the rate offering type of your choice. For example, in an ocean
project you may choose VESSEL. The effective and expiration dates
define when your new rates can be used such as January 1, 2010 to
December 31, 2010.
You can access the Build Rates action from Sourcing > Bid Creation >
Once the action completes, you will have one rate offering per winning
carrier and matching rate records for the lanes. This includes the
accessorials and special services for arbitraries you have defined on
your project.

To summarize what you have accomplished, you have used
sourcing to:
Summarize your demand
Invite carriers to bid
Enable carriers to upload their own bids
Find the best combination of bids
Build OTM rates for the awarded bids

For more information about Oracle Applications, Education, Support,
My Oracle Support, or Product documentation, please refer to these
OTM specific resources including TOI, Education and My Oracle
Support information are listed on the next few slides.
For more information about Oracle Applications, Education, Support,
MetaLink or Product documentation, please refer to these links.