Best Practices & Learning from Implementing OTM in LATAM

© Mahindra Satyam 2012 2009 

Best Practices & Learning 

from Implementing 

OTM in LATAM 

Presented by 

Sudheer Pamighantam 

On behalf of Amlendu Sekhar and Kamal Gupta

Context 

This paper is not intended to be comprehensive coverage of all things in LATAM, 

but to share experience from OTM engagements 

Basis of Experience 

Country Customer / Prospect Nature of Engagement 

Brazil LSP OTM Implementation 

Brazil Retailer OTM Enhancements 

Brazil Online Retailer OTM Support 

Brazil Aircraft Manufacturing GTM Implementation 

Argentina CPG OTM Implementation 

Mexico LSP (NA) OTM Implementation 

Mexico LSP (NA) OTM Enhancements 

Several Several (LSP, Retail, Mfg, Energy) Presales consulting 

© Mahindra Satyam 2012 

2

Section 

Section 

Section 

Section 


1 

2 

3 

4 

Section 5 

Contents 

Opportunities in LATAM & Impact on Logistics 

Challenges in LATAM Region 

OTM for LATAM 

Implementation Approach 

Q & A 

3

LATAM is Growing 

Domestic Consumption & International Trade 

Latin America on a Growth path 

�Rapid Recovery from 2009 

downturn 

�Continued Capital Inflows 

�Strong Domestic Demand 

�Continued political stability 

�Free trade agreements 


Source: The Institute of International Finance, Inc. 

Challenges include tax laws, political and regulatory obstacles and logistics infrastructure 

4

Impact of Growth on Logistics 

Shipper Perspective 

Growth in Manufacturing and Consumer Goods 

� Consumer, Food, Beverage and Retail industries 

� Manufacturing -Near-shoring at Mexico: 

- Competitive labor rates 

- Logistics Advantages 

- Lead time & Risk management 

� Petrochemical / Chemical and Cosmetics 

� Infrastructure 

Why OTM? 

- Visibility across supply chain and related event management 

- Transportation cost optimization 

- Performance Improvement & monitoring 

- Process Automation 

- Compliance to Government Regulations 


Leading to need for new process / technology 

� Re-design process and deploy technology to 

support growth: 

- Products / Channels 

- Volumes 

� Leverage opportunity to integrate LATAM 

with global process and systems 

5

Significant Opportunities for LSPs 

How can OTM Help? 

Why 

OTM? 


LATAM Logistics Market Size Market Opportunities 

Capture opportunities in 

emerging markets 

Drive growth from new / 

integrated services 

• Logistics market growth 

from 272 B in 2008 to 

333 B by 2013 

• 3PL Market size: $33 B 

• Road segment as% of 

the LATAM logistics 

market: 88.4% (2008) 

• In addition to 

International Logistics, 

domestic logistics 

services is growing 

Create LSP IT Platform to 

drive this growth 

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Section 

Section 

Section 

Section 


1 

2 

3 

4 

Section 5 

Contents 





Q & A 

7

Challenges in LATAM 


Operational Differences 

• How logistics business is 

conducted 

• Impact of Fiscal and 

Financial processes 

Fiscal & Related Changes 

• Complex Fiscal Rules 

• Constant Changes in 

regulations that need to be met 

Financial processes 

• Local financial processes 

related to logistics 

transactions 

• Meeting Regulatory 

Requirements 

8


Key challenges 

specific to LATAM: 

1) Fiscal & 

Regulatory 

Requirements 

2) Financial 

Processes 

3) Operational 

Differences 


Municipal B 

Municipal A 

1. Fiscal & Regulatory Requirements (Brazil) 

CTe 

NFS 

Federal Federal Taxes: PIS – COFINS 

State State Specific Rules for ICMS 

Municipality 

(Local City Administration) 

Mexico: IVA and Retention 

Municipal Specific Rules for ISS 

Municipal A 

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Brazil Fiscal – Sample Scenarios 

1. Normal CT-e can be cancelled, voided and substituted. 

2. Multiple Complementary CTes can be created. Complementary CT-e must refer to a Original CT-e 

3. Every CT-e should have CT-e number /series 

4. User cannot generate a complementary for a complementary CTe 

5. Cancellation of CT-e is allowed only if the shipment is not in transit 

6. CT-e cannot be cancelled if the CT-e is already sent for Authorization and Authorization Response is 

not received back 


CTe NFS 

Inter-Municipal scenario Intra-Municipal scenario 

Generated before transportation execution Generated after transportation execution 

Requires govt. sanction Doesn’t require govt. sanctions 

ICMS Tax applicable ICMS not applicable 

ISS Tax not applicable ISS Tax applicable 

Each CTE corresponds to unique sell shipment Multiple sell shipments can be grouped in 1 NFS 

7. Complementary CT-e can be generated only when the CT-e of origin is approved by SEFAZ 

8. Cancelled CT-e numbers should not be reused further 

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1) Fiscal & 

Regulatory 

Requirements 


Processes 


Differences 


2. Financial Processing 

Payment Matching Process based in Fiscal Document (CTe/CTRC/NFS/NFS-e) 

Events need to be considered in Billing and Payment Process. 

Billing process is based on Financial and Fiscal Documents 

(CTRC/CT-e/NFS/NFS-e/Pre-Invoice/Invoice) 

Workflow to approval differences (Adjustments) and 

Payments (release Invoice to ERP) 

Break Billing Invoice based on Customer Rules (Eg : Amount 

Limit , Quantity CT-e per Invoice, Region, Modal, Type of 

Products, etc) 

Cost Allocation Rules: Multiple Allocation rules with specific 

sub rules 

Argentina: Carrier updates the taxes applicable based on 

which tax calculation for Invoicing was done 

11

Financial Processing – Carrier Payment - High Level Flow 

Multi transaction 

Payment process 

Transportation 

requires specific 

documentation, 

triggered by predefined 

events 


LSP/ 

Shipper 

NOTFIS 

OCOREN (Events) 

CONEMB (CT-/NFS) 

PREFAT (Pre-Invoice) 

DOCCOB (Invoice) 

C 

A 

R 

R 

I 

E 

R 

S 

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Financial Processing– Customer Billing - High Level Flow 

Multi transaction 

Invoicing process 


requires specific 

documentation, 

triggered by predefined 

events 


LSP/ 

Shipper 

NOTFIS (Order Release) 

OCOREN (Events) 

CONEMB (CT-e/NFS) 

PREFAT (Pre-Invoice) 

DOCCOB (Invoice) 

C 

U 

S 

T 

O 

M 

E 

R 

S 

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1) Fiscal & 

Regulatory 

Requirements 


Processes 


Differences 


3. Operational Difference 

• Cte/Sell shipment Grouping Rule 

• Integration with Last Mile Routing Application 

• OTD/FIDEP Concept 

• Dedicated fleet 

• RMP 

• OCCOREN file upload to send events 

• Redelivery/Return shipments 

• Proximity scenario 

• Refuse scenario 

• Beeper Interface Design 

• Reserve Dock/Appointment Scheduling by Carriers 

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Operational Difference 

CTe /Sell Shipment 

Grouping 

Integration with Last 

Mile Routing 

Application 

Dedicated Fleet 

OTD/FIDEP 

Calculations 


The grouping of CTes is governed by parameters like Plan from / Plan to 

location, Customer Name / Division and other Grouping rules 

Based on the grouping rules associated with CTe, a fixed number of sell 

shipments are created and a corresponding CTE fee has to added on the buy 

shipment. 

� For logistics within the Metro, local last mile routing applications are used. 

Based on the need for stop by stop plan, OTM is integrated. 

� OTM sends orders (optional) and receives actual shipment back from Last 

mile routing application. Then OTM rates, executes, monitors and settles. 

Dedicated fleet: Contract created for each equipment. A budgetary / estimated 

value is assigned to each shipment on that equipment. 

Reconciliation: Cost for respective Shipments have to be updated (as 

accessorial) with additional costs to meet the original CTe amount. 

� OTD – On time Delivery 

� FIDEP - Frequency of Deliveries Informed on time 

� Delivery lead time KPIs are a function of Actual Lead time, Cut-off time for 

the day, Saturday / Sunday working and holidays during transit. 

15


OCCOREN file 

upload to send 

events 

Beeper Interface 

Reserve 

Dock/Appointment 

Scheduling by 

Carriers 

Risk Management 

Plan 


� In emerging economies, Service Provider may not have capability to 

automate the events update. 

� Carrier sends flat files that system accepts to create the XML and upload into 

the system. 

Interface with a Beeper system to interact with Drivers waiting at Yard for 

loads ready for dispatch at Warehouse. 

Requirement was to reserve some dock doors by Carriers for specific 

shipments. Handled in OTM by constraining appointment with contact profiles. 

Each shipment’s total declared value is monitored under Risk Management 

Plan and evaluated for escort/GPS requirement. 

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Redelivery/Return 

shipments 

Refuse scenario 

POD at Order Level 


� New shipment needs to be created as original shipment is already approved 

by Govt. authorities (SEFAZ). 

� Costing is done for only those ship units that are needed for return / Redelivery. 

� Multiple shipments can be created for the same scenario, which need to be 

linked to the order release automatically 

� Requirement was to have under one shipment number for both forward and 

refuse order. Accordingly, proper rating can be done by OTM. 

� Some Shippers pay based on POD at Order level 

� Hence capturing POD at Order level becomes key 

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Section 

Section 

Section 

Section 


1 

2 

3 

4 

Section 5 

Contents 





Q & A 

18


Quote Order Plan Execute Monitor Financial 

Automate and Integrate 

Quoting and Order 

Management 

ERP/OMS/ 

CRM Tool 


Optimize Planning & Execution 

OTM 

Shipper Perspective 

� Tax Calculation 

� Carrier Payment 

� Cost Allocation 

� Control of Documents 

� Integration with external systems/ERPs 

Automate 

Monitoring 

Fiscal, Finance 

Process & 

Regulatory 

Custom Built 

FORCE 

Solution 

LSP Perspective 


� Cost Allocation 

� Control of Documents 


� Customer Billing 

� Carrier Payment 

� Operational differences as Extensions 

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Leverage OTM Extensions- FORCE 

Financial, Operational & Regulatory Compliance in Emerging Economies 

Solution 

Objective 

• Enables expanding 


Platform for doing 

business in an 

emerging 

economies 

• Robust Framework 

which can be used 

for building 

extensions for 

whitespace / gaps 

in OTM 


Solution Overview 

� FORCE compliments TMS/WMS/ERP for fiscal, operational and 

regulatory compliance in emerging economies 

� Can be Integrated with TMS/WMS/ERP using the standard interfaces / 

APIs 

� The current solution is built and integrated as part of Oracle Transport 

Management (OTM) – Tax calculations, carrier payment, customer 

billing and others 

� Solution also integrates with Financial system and with systems that 

feed the regulatory agencies. Ex: External agencies like MasterSAF for 

Brazil, SEFAZ, SUFRAMA. 

FORCE Modules 


� Freight and Tax Components Allocation 

� Control of Fiscal and Operational Documents of Transport Operation 

� Freight Payments Management. 

� Freight Billing Management 


� User Management 

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Section 

Section 

Section 

Section 


1 

2 

3 

4 

Section 5 

Contents 





Q & A 

21

Learning on Project and Implementation 

Approach 

Global Template Approach 

� Consider Template approach for countries with less regulations 

� Brazil will typically not fall into global template or even LATAM template, depending on 

type of operations 

� Knowledge of OTM in other countries is useful, could offer limited re-usability of 


configuration for Brazil 

Resourcing Strategy 

� Important to include Local resources for Understanding of Local knowledge, including 

fiscal and regulatory experience 

� Bring in consultants with Global OTM Experience. There is limited local OTM talent 

� Look for Bilingual Resources / Translators 

� Plan for visa timeframes & associated challenges. 

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Learning on Project and 


Project Planning 

� Be realistic in Brazil timeframes – implementation or rollout 

� Create time for proof of concept and interim validation during development phase 

� Learn from previous OTM experience in that geography 

� Engage with partner and Oracle 

Project Approach 

� Scenario based approach. Complexity is in the exceptions. 

� Need to create flexibility to change fiscal rules / operation processes based on the 

regulations 

� Don’t underestimate operational processes. Fiscal rules have huge impact on 


operational workflow and exceptions 

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Section 

Section 

Section 

Section 


1 

2 

3 

4 

Section 5 

Contents 





Q & A 

24


Q&A


mahindrasatyam.com 

Safe Harbor 

Thank You 

This document contains forward-looking statements within the meaning of section 27A of Securities Act of 1933, as amended, and section 21E of the 

Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein are subject to certain risks and uncertainties that 

could cause actual results to differ materially from those reflected in the forward-looking statements. Satyam undertakes no duty to update any 

forward-looking statements. For a discussion of the risks associated with our business, please see the discussions under the heading “Risk Factors” in 

our report on Form 6-K concerning the quarter ended September 30, 2008, furnished to the Securities and Exchange Commission on 07 November, 

2008, and the other reports filed with the Securities and Exchange Commission from time to time. These filings are available at http://www.sec.gov 

26


Q&A


mahindrasatyam.com 

Safe Harbor 

Thank You 

This document contains forward-looking statements within the meaning of section 27A of Securities Act of 1933, as amended, and section 21E of the 

Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein are subject to certain risks and uncertainties that 

could cause actual results to differ materially from those reflected in the forward-looking statements. Satyam undertakes no duty to update any 

forward-looking statements. For a discussion of the risks associated with our business, please see the discussions under the heading “Risk Factors” in 

our report on Form 6-K concerning the quarter ended September 30, 2008, furnished to the Securities and Exchange Commission on 07 November, 

2008, and the other reports filed with the Securities and Exchange Commission from time to time. These filings are available at http://www.sec.gov 

28

Best Practices & Learning from Implementing OTM in LATAM

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