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Om Logistics needed to upgrade its outdated IT infrastructure to meet growing customer demands and compete in a rapidly expanding market. It developed an integrated ERP system using Intel Xeon processor-based servers and Linux operating system. This provided a robust, scalable solution for online consignment tracking, increased functionality, and platform-neutral access for 400 customers. As a result, Om Logistics significantly increased market share while reducing costs through improved efficiency and reliability.
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- 1. Advanced Functionality Increases Om Logistics’ Ability to Meet Customer Demands with Reliability and Security Logistics Collaborative Value Chain Intel® Processors and Linux* Operating System Intel® Xeon® processor Case Study Challenge Solution Business Value In 1999, Om Logistics was a relatively new logistics company with plans for rapid expansion. However, its ability to keep pace with growth and respond to increasing competition was severely limited by an outdated IT infrastructure. The company needed to extend the infrastructure from two branches to all 65 branches of its business. In addition, customer demands for advanced functionality, such as the ability to track consignments online and the ability to receive e-mail alerts 24 hours a day, needed to be addressed. Data security was also critical for customers, many of whom were competitors with each other. A robust, stable infrastructure was essential to making these services available. An Om Logistics IT team developed an integrated enterprise resource planning (ERP) solution to handle its business end-to-end. For this effort, the company deployed two-way Intel® Xeon® processor-based servers and Intel® processor-based front-end clients, all running the Red Hat* Linux* operating system (OS), for secure, reliable performance. The system handles 700 concurrent users, including external access for up to 400 customers. Linux OS-based Java*-enabled mobile phones enable tracking of the Om Logistics truck fleet in near real-time. Integrating consignment tracking, billing, accounting and contract management has streamlined the entire business operation. The robust performance of a solution built on Intel processor-based servers and PCs running the Linux operating system has enabled Om Logistics to increase its service offerings and provide its customers with enhanced functionality. Now the company is better able to help customers manage their procurement process while reducing costs with just-in-time parts delivery. As a result, Om Logistics has been able to significantly increase its share of market. At the same time, the stability and reliability of the solution has reduced downtime and service costs, enabling Om Logistics to deliver value to its customers and enhancing its ability to compete in the market. Background: A Growing Business Opportunity Om Logistics is a leading supply chain management company in India, known for its efficient handling of surface, sea, express, train and air cargo. Among Om Logistics’ customers are many of India’s recognized corporations in the automobile, pharmaceutical, textile, electronics, white goods, food products and other industries. The company enjoys nearly 50 percent market share in inbound logistics for the automobile sector. It manages the parts inventory for its automobile sector customers out of its own warehouses and ships inventory to shop floors across India “just in time” for each day’s production. In 1999, the automobile sector in India was growing rapidly. Om Logistics saw a business opportunity in serving the daily production needs of automobile manufacturers across India. However, to take advantage of this opportunity, the company needed to rapidly upgrade its IT infrastructure to be able to handle an escalating number of transactions reliably, while meeting customer expectations for enhanced functionality and timely delivery.
- 2. 2 The Challenge: Measuring Up to Customer Expectations Om Logistics customers have several overriding expectations. They want their consignments to arrive on time and intact, and they want access to current status information about shipments in transit. The company’s IT infrastructure presented a significant bottleneck to meeting these customer expectations. In 1999, Om Logistics had only 20 computers, and only two of their 65 branches were computerized. Performance was slow, and system stability was becoming a critical issue. According to S.K. Goel, vice president of IT at Om Logistics, “We were losing our accounting and customer data frequently because of one virus or another, hard disk corruptions or simply the operating system getting hung and requiring a reboot. This meant our team was working late almost daily to manage data recoveries.” The software Om Logistics was using had been developed by an independent solution provider on a proprietary platform. It supported only two functions: consignment notes preparation and invoice preparation. Customers wanted more advanced functionality, such as the ability to track consignments and receive e-mail alerts. In addition, because Om Logistics works with a variety of companies, some of which are in competition with each other, data security and confidentiality were of prime importance. Many essential functions were performed manually, impeding the ability of Om Logistics to meet the rising expectations of customers. Change had become a business imperative. The Solution: An End-to-End ERP System on Intel® Processor- based Servers and PCs Running a Linux* Operating System A four-member development team, led by Goel, took on the task of designing an end-to-end enterprise resource planning (ERP) system capable of providing the enhanced functionality their customers were demanding. The development team determined that Intel® Xeon® processor-based servers running the Linux* operating system would provide the reliable and robust back-end infrastructure they needed to maintain 24x7 availability with minimal downtime, while allowing them to easily extend support to all 65 branches of the company. Intel® processor-based laptops and desktops running Linux operating systems would be deployed company-wide to provide access to the ERP system and to run open source productivity software applications. Goel says, “We found this combination fully met, and at times exceeded, our performance, security and uptime requirements.” To develop the ERP system, the development team used the open source COBOL programming language on the Red Hat* Linux operating system. They also deployed tracking, billing, accounting, contract management and human resource modules to streamline back office functions and integrated them with the front-end ERP system. Om Logistics has deployed more than a thousand Intel processor- based PC clients running the Linux operating system throughout the company. Client systems range from the mobile laptops used by managers for productivity applications and e-mail access to the desktop ERP clients used by back-office staff for data entry and shipment tracking. An online consignment tracking system completes the solution by enabling tight coordination with branch offices and allowing Om Logistics to inform customers about the current status of consignments. Linux-based Java*-enabled mobile phones are deployed throughout a fleet of 2,000 trucks. These phones automatically generate SMS messages indicating the exact location of each truck. Messages are sent every 15 minutes to the “Having decided on the Linux* OS and Open Source products, the Intel® Xeon® processor-based server was a natural choice. We found this combination fully met, and at times exceeded, our performance, security and uptime requirements.” S. K. Goel Vice President-IT, Om Logistics Ltd.
- 3. 3 ERP servers, where the status of each shipment is immediately updated for web-based access. “Most other inbound logistics companies are able to do so only once in six hours, giving us a competitive advantage,” says Goel. The servers handle 192,000 such updates a day. Om Logistics is planning to deploy 3,000 more Java-enabled mobile phones to extend coverage to its field staff as they make deliveries. “There have been no problems in terms of handling the load of these SMS messages on the server. We feel that our Red Hat* Linux* OS and Intel® Xeon® processor-based servers are well equipped to handle substantial growth,” Goel adds. Today the ERP system handles 700 concurrent users spread over 220 locations. Every day as many as 400 customers track their consignments on the system and give instructions for delivery of production parts. The ERP system offers a platform-neutral interface to these customers, who can access the system from any environment. An end-to-end solution built on Intel processor-based systems running the Linux operating system has enabled Om Logistics to successfully implement a customer-facing business model with an open collaborative environment. Business Benefits: Robust, Scalable, Platform-neutral Interoperability, at a Low Cost of Ownership Om Logistics now has an online system that enables it to constantly stay in touch with customers. Customers can check the availability of their parts and enter delivery instructions, allowing Om Logistics to handle just-in-time delivery of parts needed to meet production schedules. Customers can track the movement of parts from the location of origin to their shop floors. Some customers have even implemented a gateway into their own production system to incorporate the flow of information from Om Logistics into their production planning process. At the backend, Om Logistics maintains bills of material for its customers’ products. The company ensures that inventory will be available when needed by working with suppliers throughout India to keep stocks replenished. It then tracks customer requirements and delivers parts as they are needed. For example, a customer may plan to manufacture a certain number of cars of a particular model during a particular factory shift. The end-to-end delivery chain keeps the production line moving smoothly, while helping the customer save inventory costs and better manage requirements. As a result, Om Logistics has seen its customer base and market share increase substantially. When Om Logistics made the decision to migrate to Intel processor-based servers and PCs running Linux OS, the primary decision criteria was to build a robust, scalable and highly functional solution. Cost was not a major consideration as the company felt that it was in its best interest not to compromise the quality and functionality of services. However, the company soon found that the cost advantages of its new IT infrastructure enabled it to deliver a competitive value to its customers in the face of rapidly increasing competition from local companies and global players setting up shops in India. In Goel’s words, “It was then that we realized how smart our choice was. We had not only achieved good functionality, robustness and scalability. We had managed to do so at lower cost due to our choice of technologies.” Automatically generated e-mail alerts and an online consignment tracking facility for customers have brought call center traffic down dramatically. In addition, the computing infrastructure built on Intel processor-based servers and PCs running the Linux OS has proven to be quite robust. With downtime minimized, service costs “Our customers are absolutely delighted with the enhanced functionality and reliability of our systems and services. Today, we are recognized as the leading company not just in market share but in our efficient use of technology as well.” Ajay Singhal Chairman and Managing Director, Om Logistics Ltd.
- 4. Information regarding third party products is provided solely for educational purposes. Intel is not responsible for the performance or support of third party products and does not make any representations or warranties whatsoever regarding quality, reliability, functionality, or compatibility of these devices or products. Copyright © 2005 Intel Corporation. All rights reserved. Intel, the Intel logo, and Xeon are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others. 1205/CV/MESH/HOP/1K 310173-001US have been dramatically reduced. While the number of computers has grown from 20 to 1,150, and the number of online locations served to 220, the number of support staff has remained at four. Om Logistics’ original proprietary platform allowed only four customers to access a shared Internet dial-up connection. The system today handles 700 concurrent users, including up to 400 client systems at customer sites. The platform-neutral interface to the ERP supports interoperability with customer client hardware and proprietary operating systems. Om Logistics’ choice of Intel processor-based servers and client PCs running Linux OS and open source software led to significant overall cost savings. Goel estimates, “The one time cost savings for Om Logistics was $720K (USD) and the recurring cost savings has been around $580K (USD) per annum.” In 1999, Om Logistics was a new inbound logistics company with revenue of $4.5M (USD). In 2004, the revenue of the company was nearly $38M. In 2005, Om Logistics expects to close at $58M. Leveraging its business by implementing the right IT solution has led Om Logistics to achieve a vision of becoming one of the leading logistics companies in India. About Intel Corporation Intel works with the world’s largest community of technology leaders and solution providers—from software and hardware to systems integration and services companies—that all are working with Intel® products, technologies and services with a common goal of providing better, more agile, cost-effective business solutions for you. For more information Find out more about a business solution that is right for your company by contacting your Intel representative, or visit the Intel® Business Computing Web site at intel.com/business or its industry solutions specific sites at: intel.com/go/retail intel.com/go/manufacturing intel.com/go/digitalmedia intel.com/go/finance intel.com/go/telco intel.com/go/hpc intel.com/go/linux (for Intel Channel Members) For more information about Om Logistics Ltd., visit: www.omlogistics.co.in “Most other players are not able to deliver our level of functionality and service at anywhere near the price points that we manage to offer due to our efficient processes and systems.” Ajay Singhal CMD, Om Logistics Ltd.