OIA Global: from source to store
OIA Global was founded in 1988 as Oregon International Air Freight. Today the company is a reflection of its success over the last 30 years in meeting the demands of industry for sophisticated logistical services. With over 1,200 professionals in 64 offices in 28 countries, OIA designs innovative solutions that optimize supply chains around the world. Household names in the global footwear, agri-industrial, healthcare, automotive, fashion, retail and athletic sectors outsource their supply chain functions, in whole or in part, to OIA.
OIA's three main lines of business are freight forwarding, third-party logistics (3PL), and distribution. The first of these consists in arranging the collection and delivery of containers using air cargo or ocean cargo and extends to the paperwork and processing requirements for customs, all non-core functions for manufacturers and retailers alike. The distribution division, a vital part of the supply chain, comprises warehousing, cross-docking, and ecommerce fulfillment.
Increasingly though, companies that develop IP, design and manufacture goods in different parts of the world – like car makers or footwear brands – look for partners that can take all of the supply chain burdens off their shoulders, from raw materials right through to the customer's door. A 3PL company like OIA may procure the raw materials for their factories, ship them to the factory, design the packaging the final product is sold in, and deliver the packaging to the factories. The client puts packaged goods into an outer carton that goes onto a pallet, and these are assembled into a cargo container, shipped to the destination country, 'de-consolidated' and sent to local warehouses for distribution. All of this is handled by OIA on its customer's behalf.
This saves the manufacturer from finding carriers for the goods it produces: and in any case the carriers, whether shipping lines or airlines, don't want to do the consolidation and de-consolidation work once they have landed the container at its port of destination. For manufacturer, carrier and 3PL provider alike this is a virtuous circle – because of the volumes it handles, OIA can obtain bulk rates that give the client a much lower cost to market.
Managing the data and the volume of units involved is the work of IT. Three years ago, OIA appointed Jay Hemmady as its CIO, giving him the brief of optimizing its digital platforms to meet the realities of the present and future supply chain. “We have to find ways to stay ahead of the industry and these changes,” he says. “As CIO my fundamental responsibility is to keep the IT systems up – to 'keep the lights on and the trains running'. But at the strategic level we are moving fast into the realm of information and data, and using it to give a reliable service to our clients. In all three of our main business segments I am responsible for maintaining the information systems that ensure there will be no disruption in their supply chain.”
The business OIA does with footwear clients is now 100% electronically executed. Footwear factories place orders on OIA's self-service portal and all further transactions involving transportation of raw materials into that factory, and of finished goods out from it, are handled in the same way. Three years ago, Hemmady came into a company that was anxious about IT, not understanding the important job it was doing in keeping the systems up and running, let alone trusting it to lead the way into new territory. “There is a movement away from the old ways to a new way of doing business, and as CIO I have to be on top of that. For example, when I came on board there was a certain fear of developing custom software applications.” The company had had a belief that the way forward lay in commercial off the shelf packages (COTS). But being available generally, these give no competitive advantage, Hemmady says.
He had to encourage the leadership that developing business critical platforms in-house would be a good idea but before that, he needed to show the business at large that IT was already doing a good job for it. “For any CIOs the key is to keep the lights on and the trains running. If they don't get that right, they don't get the chance to do anything strategic.” In the first year, Hemmady set out to improve visibility into projects and the performance of his department. “We began to communicate and provide status updates more frequently and candidly. That took up a lot of time. Instead of updating the executives quarterly we started doing it with all stakeholders weekly. There was so much to communicate, and more frequently, that it required the IT staff to shift gears and speed up considerably, but the benefits were enormous.”
The result? The mindset in the user community quickly changed. The relationship improved, and an appreciation for IT materialized. More importantly, there was much more collaboration between IT and the business units. “For example, the notion of going to the cloud became a much simpler discussion because they felt comfortable and they had confidence that we can deliver what we promised and that it would work,” Hemmady says. “The exercise also gave us the confidence to expand the use of agile scrum methodology across the board and increase the degree of software development initiatives.” Nevertheless, until the first product was launched, even the board remained anxious. After a year of phased development and release OptiLink, the self-service supply chain portal on which OIA customers now place their orders, was launched without a glitch. It has since replaced two of five difficult to upgrade and costly to maintain legacy systems and on a roadmap to retire the rest. “We can now easily deploy OptiLink for new customers, giving them the supply chain and inventory visibility they require,” Hemmady adds.
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Over the development period, the spadework of development was gradually distributed between the USA, UK, Ukraine and India. “In addition to delivering software development, I was able to encourage us to look offshore with a twofold purpose. One is to decrease the time to market by using the timezones effectively, and the other one, of course, is the lower cost of ownership.” For freight forwarding, his teams are now developing OIA Connect, another self-service portal that allows OIA to present its own and its clients' data on a single web portal. “Freight forwarding, for example, represents a significant portion of our revenue and profit is operational on a package called CargoWise One from the Australian application software specialist Wisetech Global.”
Another thing that made the business leaders nervous was the idea of moving data and systems from data centers controlled by OIA into the cloud. But Hemmady was able to convince the CEO that this would not jeopardize the company's IP and information. “We moved into the cloud in a big way. We have not finished the journey,” he elaborates. “We still have equipment that has not fully depreciated that is still in our data center. We are not reluctant to move everything to the cloud, but it makes economic sense to use both modes for now. We will think twice about buying new servers from here on in.” Going into the cloud is straightforward, he continues: “We signed up with the Microsoft Azure cloud, which provides all the tools and training you require. Though OptiLink is currently running in our data center, it was migrated to the Azure cloud and proven out so we know it will works there. We haven't decided yet whether or when we will make that the primary computing platform.” For now, the company continues to store its data at Atmosera, a co-location datacenter at Beaverton, Oregon. “We have racks and equipment in there that we manage. Before the advent of the cloud, companies like Atmosera were the best way to make use of third party colocation centers.”
On the distribution end of the supply chain, OIA has been using the Softeon warehouse management system (WMS). “It's a sophisticated and advanced application package that allows us to run our ecommerce warehouses,” says Hemmady. The software is robust enough to span over a variety of industries. Modules built into the WMS such as its slotting and loading functionality help add value for many clients. Even more importantly, it provides visibility in a high-churn environment. Companies need to know what is in the warehouses so they can control their manufacturing timing and demand forecasting. In a fast-moving warehouse, knowing how many things you have available is not a simple task. “We are now in a position to give our clients on-hand inventory details from moment to moment,” Hemmady adds. “Companies are trying to minimize their cost of manufacturing and inventory is a cost to business.”
BI Analytics is one of the bigger initiatives for Hemmady and his teams in 2018. “We give our clients a spectrum of business intelligence (BI) graphics but we have not looked at the evolution of BI analytics in a strategic way, so this year we set funds aside to take analytics to the next level. We are looking holistically at the whole data model of freight forwarding, warehousing and the supply chain sector. We want to start looking at the data and the patterns to predict what is coming in the future. Trend analysis and other things is what the customer is looking for these days. We understand that and will be giving them that in the very near future.”