IBM Travel Transportation Global Centre of Competence

IBM Travel & Transportation Global Centre of Competence (Co. C) “Top Industry Consulting Expertise without Borders” Mark Bedeman, Global SME, Freight Logistics & Cargo II International Transport and Logistics Business Forum "NEW SILK WAY“ Multimodal solutions in transport logistics: challenges and tendencies © 2012 IBM Corporation

IBM Global Business Services § IBM Global Business Services is a partner of unmatched breadth and depth – Consultants and professional staff in more than 160 countries globally – Deep experience and expertise in 17 industries Travel & Transport Industry Sectors Service Lines Public Supply Chain Management Industrial Distribution Communications Financial Services Strategy & Change Human Capital Management Customer Relationship Management Financial Management Application Services © 2012 IBM Corporation

IBM presence in Russian Federation Russia: * HQ: Moscow City office * RSTL, Moscow * St. Petersburg * Samara * Yekaterinburg * Kazan * Rostov-on-Don * Nizhniy Novgorod * Novosibirsk * Perm * Krasnoyarsk * Khabarovsk * Voronezh * Ufa 2013 CIS (Commonwealth of Independent States): * Kyiv, Ukraine * Tashkent, Uzbekistan * Almaty, Astana, Kazakhstan © 2012 IBM Corporation

IBM‘s Global Travel & Transportation Centre of Competence (Co. C) provides deep industry knowledge to IBM account teams and clients Orchestration of Eco-System of experience and knowledge Other Co. Cs Global Business Services GBS is one of the SBU’s Of IBM Solution Centres Mandated to create reusable assets leveraging the whole IBM eco-system Global Delivery Institute of Business Value Global delivery centre spread across the globe is essentially cost recovery business units and form part GBS/GTS The Institute for Business Value provides Thought Leadership on Key Industry Topics Software IBM Research and Labs Pioneer in providing path breaking technological solution & asset which involves complex algorithm , HW interfaces etc The software product arm of IBM that owns powerful brands like Sterling, Websphere, Rational, i. LOG, SPSS etc Markets/Countries Practices Local market practices spread across various market segments' of IBM 5 Software Providers Independent Software vendors are partner vendors of IBM. For instance, SAP, ORACLE, IBS etc © 2012 IBM Corporation

Research at IBM means: Finding the intersection between Invention and Insight Objectives: Expected Outcomes: § Accelerate ability to apply technologies and capabilities Ecosystem of innovation • Community Leaders • Employees • Business Partners • Regulatory Bodies • Independent Software • Policy makers vendors § Demonstrate the power of collaboration § Showcase what sets client apart • Competitors Insight From: Innovation § CEO and CIO studies From: § Market Research üInnovation Discovery § Client workshops and üInnovation Teams discussions üFirst of a Kind § Global Innovation Outlook üDevelopment/ Research § Institute for Business linkage Value • IT Analysts • Investors Compelling marketready solutions and client partnerships • Clients Invention From: § Research and Development teams § Partner value differentiators § Technical Advisors § Global Technology Outlook Deeper client understanding © 2012 IBM Corporation

We also work with our freight logistics clients in innovative ways to provide even greater value to all aspects of their business IBM Centers for Solution Innovation IBM Center for Business Optimization IBM Research Services IBM CEO, CFO, CIO, CMO Studies IBM Industry Solutions Labs (ISLs) IBM First-of-a-Kind (FOAK) Program IBM Global Technology Outlook IBM Global Innovation Outlook © 2012 IBM Corporation

Research and Services Centres for Clients and Business Partners Russian Systems and Technology Laboratory § Established 2006 by IBM CEO, Sam Palmisano § IBM's lab main mission is the development and support of systems software, firmware and middleware in the large systems area. § RSTL is working on the full life cycle of product components and technology. This includes IBM System z mainframe, which has high synergy with historical IT development in Russia, as well as mainframe-connected storage, and software middleware services including database, virtualization, service management and messaging. Main areas of development activity Ø Large systems operating system software development Ø Microcode development and hardware engineering Ø Middleware (messaging, database, systems management) Collaboration with IBM Research Labs Ø Analysis of end-to-end relationship between applications and data Ø Virtualization to enable multi-tenancy – i. e. hosting clients which run a software stack to solve problems such as underutilization of hardware © 2012 IBM Corporation

Smarter Transportation Incorporating intelligent sensors in your assets to help drive operating decisions Getting real-time line of sight across the transportation supply chain Leveraging the information you already have – in new ways – to drive better decision making Instrumented: Intelligent: Putting sensors not just in “things, ” but across entire supply chain ecosystems. Track your freight. Track and monitor your ships. Know the condition of both. Predict and prevent service and equipment failures. 10 Interconnected: Enable an entire shipment to be completed electronically – initiated, managed, executed and delivered - across multiple carriers without repeated manual intervention. Sense-analyze-act. Have the ability to see and model the future, for better decision-making. Develop optimal resource allocation and asset utilization across your entire ecosystem. © 2012 IBM Corporation

Business Dynamic Demands a Shift in Operational Management Focus Transaction Driven Insight Driven The new future development of the Transport Systems will be based on designing from the outset the management of the businesses from a transaction centric approach to an information / insight driven approach. Provide operators with real time insights and "what if" scenarios to support decision making © 2012 IBM Corporation

Innovation Idea 1 Multimodal Freight Route Optimisation First of a Kind (FOAK) “To create

Innovation idea 2 Empty Container Repositioning Problem Complexity – Typical Data Size § Number of: – Container types (~10 -20) – Weeks (~16), – Port calls (x 10 s of thousands), – Ports (x hundreds), – Vessels (x hundreds), – Foreign transport links (x 10 s of thousands), – Containers (x Millions), § Means of repositioning: – On board company vessels, – Foreign marine feeders, – Inland transportation, § Other means of empty containers control: – 50 -100 on-going leasing contracts with leasing companies, – 10. 000 -20. 000 New built containers annually, § Annual costs of empty containers logistics: – Several hundreds of millions of dollars, © 2012 IBM Corporation

Business Solution Realisation with ILOG (Demand Map) Surplus Deficit © 2012 IBM Corporation

Empty container distribution - The Railwagon Problem § Approx. 600 depots and ports around the world – Rail Terminals? § 17 types of containers – 100 Wagon models, Container carryng? § Transportation by own or other ships (schedule. on-demand) – Train (schedule and on-demand) § Constraints Demand forecast and ship capacity – train capacities § Depot capacity – track capacity § Transshipment capacities – shunting capacities, times For the given input and cost function: Optimal solution? Allows tactical planning: "What if I have more capacity to xyz ship / train? " Allows strategic planning: what happens if I have 10% more / less container / wagon? © 2012 IBM Corporation

Innovation idea 3 Logistics “Community” Role of Collaboration platform, based on single Instance of the event data, accessible by all stakeholders WMS/ Yard Mgt Rail Hub Collaboration Network Stores ERP Legacy BOB Systems Corp. Accts. Consumers Call Center MFT Mobile Web Interconnect Networks Order Mgt Shipper Customs Portal TMS Rail Companies 3 pl/Freight Forwarders Road Operators Powered by IBM Sterling Commerce, Warehouse Management Order Management, Collaboration Network, Integrator Supply Chain Visibility & Supplier Small Compliance Suppliers Small Carriers © 2012 IBM Corporation

Innovation idea 4 Forecasting and Capacity Planning F&CP Inputs from Marketing Execs/Product Lead • Marketing investments, projected growth in market share • Addition of new services Existing Volume Contracts Inputs from Sales Opinion on new business pipeline; changes in existing contracts, new contracts Inputs from Operations Previous Predictions Demand Estimation & Plan Creation Unstructured Data • External Po. V data, accounts • News feeds, tweets, facebook Historical Data <network plan> Route and asset plan <procurement plan> Capacity procurement © 2012 IBM Corporation