SOURCE: GT Nexus

October 05, 2005 08:12 ET

GT Nexus Launches Global Cost Control System

New Technology Offering Combines On-Demand Software, Unified Data Service Into Next Generation Platform for Dynamic Global Supply Chain Cost Monitoring and Analysis

ALAMEDA, CA -- (MARKET WIRE) -- October 5, 2005 -- GT Nexus, the leading provider of on-demand software and services for international logistics and supply chain management, today announced general market availability of its new Global Cost Control management system.

Delivered as an on-demand, network-based service over the Web, the system introduces a next-generation technology solution for tracking, management and control of global sourcing and supply chain costs. It is designed for retailing and manufacturing companies that have extensive overseas supply and production bases and manage longer, more complex and more expensive international supply chain operations to get those goods to market.

Globalization and outsourcing continues to drive companies toward lower-cost suppliers and factories overseas. That brings more exposure to risk, longer lead times and a bevy of new global trade management challenges and supply chain costs that can add up quickly. Capturing and tracking actual global costs as they occur, allocating them accurately to shipments, orders and products, measuring them against targets, and understanding the impact on total "delivered" product cost is the key to successful -- and profitable -- global business.

"One of the most common traps that companies fall into is taking a traditional landed cost approach to analyzing low-cost country sourcing opportunities," explained Beth Enslow, vice president, enterprise research for The Aberdeen Group, a technology consulting firm. "Without a holistic system that provides intelligence into the more complex costs of global sourcing and logistics, companies don't see the whole picture, or they see it too late. That disconnect has a dramatic or even catastrophic impact on a company's margins and their ability to compete."

"As is" dynamic costing; new approach to an old problem

The GT Nexus system brings to market a comprehensive new service which provides "as is" capture, reporting and analysis of real-time sourcing and logistics costs as they are incurred, globally. This methodology is a major improvement over traditional landed cost practices, which typically present either:

--  A "before" scenario, consisting of inaccurate freight cost
    assumptions, estimates, averages, historical data and projections using
    expensive third-party trade compliance content; or
--  An "after" scenario, using a manually prepared roll-up of assembled
    charges, collected and analyzed after the fact, usually well after product
    delivery.
    
Neither case provides an efficient, timely or complete view into the true global supply chain cost picture, nor do they provide the ability to identify and correct problems before they become irreversible -- turning expected profits into unplanned losses.

How global cost control works: marrying "financial" and "physical" supply chain flows

For most companies, global sourcing and supply chain operations are independent functions, driven by different incentives and business goals. One group is measured on unit price. The other is graded on transportation expense or total logistics cost as a percentage of revenue. Both typically use different systems as well to perform their tasks.

In the GT Nexus system, a unified data hub is coupled with integration and business process management software to connect these silos and improve collaboration between them. Organizations gain an integrated view of two critical business functions:

1) The "physical" supply chain world of international transportation and logistics partners who work with bookings, orders, shipments, inventory in-transit events, milestones and exceptions. This is where global logistics lives.

2) The "financial" supply chain world of purchasing agents and suppliers who work with first cost purchase orders, supplier invoices, freight charges, insurance, duties, taxes and customs fees. This is where global sourcing and financial management lives.

With GT Nexus, the enterprise is thus equipped with comprehensive, time-specific visibility into both "physical" supply chain events, such as loading of a container on a ship, and the "financial" liability created by that event, such as freight charges from the ocean carrier's rated, electronic bill of lading. It is a dynamically generated, real-time view into global supply chain cost "actuals" as they occur and how those costs "build" in lockstep with physical supply chain flows.

Assigning costs to shipments, line items; measuring "actuals" against targets.

In this model, global cost information is collected directly from source providers through integration to a common data hub for standardized electronic data interchange messages. Using sophisticated mapping algorithms and programming logic, the system organizes various global cost components into specific categories, then calculates and assigns those cost events in proportion to the appropriate shipment, order line item or SKU. This enables accurate per-unit cost and margin calculation. The system also provides tools to track "projected," or target global cost estimates for globally sourced products against cost "actuals," measure the difference, and then adjust targets dynamically to manage margin assumptions and total costs.

Deploying this globally integrated actual cost management system enables enterprises to:

--  Standardize and automate the process of computing total global product
    acquisition cost
--  Obtain more timely, complete and accurate global cost data
--  Isolate and rectify landed cost or target cost variances, then use
    that intelligence to recover faster from operational problems
--  Price products more accurately by knowing "as is" actual costs early
    in the cycle
--  Improve margins through understanding and measuring total delivered
    profit.
    
By emphasizing electronic capture and management of global cost information, many traditionally labor-intensive and mistake-prone practices for collecting and summarizing costs from paper invoices and other trade and logistics documents are replaced with more automated processes and controls.

Finally, since it is delivered as on-demand, Web-hosted technology, GT Nexus implements and manages the business process platform for the customer and their trade partners. No hardware or software is installed on-premise at the customer. Software applications are provisioned to users through a simple web browser as an "on-demand" service. Secure access control and use permission is legislated by the enterprise.

"The reality is that while companies will generally do well to source as much of their product from low-cost countries as possible, many more will drive higher profits by taking a more calculated approach," said Aberdeen's Enslow. "Systems and web-based software tools are emerging that will let companies compete with a much better picture of total delivered profit, which is the key to successful global sourcing."

ABOUT GT NEXUS -- GT Nexus is the leading provider of hosted, on-demand software and services for global transportation, logistics and supply chain management. Founded in 1998, the company provides integrated software products and IT services, provisioned through a single Web platform, used by enterprises and their partners to control, optimize and manage the flow of goods and information from order to delivery, worldwide. The GT Nexus platform is backed by an industry consortium of leading ocean carriers who transact over the system with some 70 3PLs, hundreds of freight forwarders and over 6,000 importers and exporters to manage and execute international shipping. For more about GT Nexus, visit www.gtnexus.com

Contact Information

  • Media Contact:
    Gary Frantz
    GT Nexus, Inc.
    510.747.3214
    Email Contact