Cosco leverages BPI

Von Sheila Lam

Business process integration built using Sybase tools helps Cosco Logistics use an XML-based data exchange system.

To support smooth and effective delivery of physical goods (in a word: logistics) an integrated digital system that handles data across different parties is essential. This is why Beijing-based Cosco Logistics developed a business process integration project for real-time data exchange.

As one of the largest shipping and logistics organizations in China, Cosco Logistics provides a range of services including an international shipping agency, a public freight agency, container terminal management, storage, and transport services via railway, road and barge. All these services are handled by the company?s logistics management information system (LMIS).

But the company is expanding its business scope to include industry-specific transportations, like automobiles, household appliances, and exhibition logistics within the country, said Zhang Xiao, CTO of Cosco Logistics.

"Take a customer in the home appliance industry as an example. It?s typical for a customer to place 2000 to 3000 orders every day on our systems," said Zhang. "The challenge is to process them quickly and transparently to the customer."

Integrate organically

The expanded businesses are bringing in new requests and requirements in the LMIS, which is reaching its limit for support of diverse business requirements. "This can only be solved when we can ?organically integrate? our system with our customers,?" said Zhang.

Aiming to allow its business partners and customers to place and manage orders, the company developed its business process integration (BPI) project. Using Integration Orchestrator software from Sybase, Cosco Logistics built an integrated messaging architecture which exchanges business data via XML formats, said Zhang Yu, IT manager. This exchange means the LMIS can automatically validate message formats and process messages according to business logic and business flows.

By deploying data exchange-over-XML, Cosco Logistics benefits in two ways. Internally, the LMIS is able to exchange data with the company?s ERP system as well as systems from various business units. Externally the LMIS is able to automatically exchange and process information sent from customers and business partners? ERP systems, said Yu.

"It can transfer messages based on business requirements, connecting the internal and external business systems so they work together as a whole," he said.

Creating industry standards

"We have been using XML, but the major challenge of this project is creating the standards for communications across heterogeneous (logistics) systems," Yu said. "We have customers on different types of supply chain management systems (and) they all have different formats and processes."

He said the company worked closely with customers and industry bodies to create common standards of the major business processes to allow new customers to set up integration in an easier manner. Currently, Cosco Logistics has already defined 30 processes to allow easy integration.

"In a sense, our system actually helps standardize the processes of China?s logistics industry as customers and partners seek to integrate with our platform," said Zhang.

As the data exchange enables process-automation, the time spent by all parties is greatly reduced. This shortens ordering cycles, reduces inventory costs, and removes uncertainty from the entire process, said Yu. It also allows customers to make rational and timely decisions, reducing the overall cost of their logistics.

"Using Sybase Unwired Orchestrator, we were able to build a strong business process integration system," he added, "allowing us to communicate better with our customers while supporting Cosco Logistics? business expansion."

Beyond Cosco logistics

The BPI project increased Cosco Logistics? sales and revenue, but more importantly, said Zhang, the system allows the company to expand its role from logistics service provider to business partner for its customers.

"Many of our customers are national if not global (players), and logistics is a major component in their cost structure. Our services help them dramatically lower their costs," he said. "On the other hand, a logistics supplier is more like their partner...a robust system is essential for us to obtain and retain such customers."

He added some customers even featured Cosco as their logistics partner in their marketing brochures.

"The logistics industry in China has become much more competitive, while we are going global as well. The IT system will also help us maintain our edge at home and overseas," concluded Zhang.