1. TIME (in Supply Chain)
Sergio Barbarino
Research Fellow P&G
Supply Chain Innovation Center.
2. Procter & Gamble Eurocor
Sergio Barbarino
My career at Procter & Gamble
Quote
Vague, but exciting! (M. Sendall)
Personal
- Age, 46
- Living in Bruxelles
- Rower
- Sommellier
-MBA Solvay 2004
-Master Chem Eng. 1991
-UNINAPOLI
@ University
2011 Research Fellow, SNIC
2007- 2011 – Principal Engineer Process Breakthrough
-Started the First Global Supply Network Innovation Center
1991-2007 – Various Positions as Process Development Engineer
- Brands: Mr. Clean, Viakal, Tide, Lenor, Fairy
- Plants: Europe, China, India, Egypt, Morocco, Mexico, Guatemala,
Russia etc.
- Locations: Brussels, Rome, Cincinnati
3. 3
P&G at a Glance
Net Sales $84 (billion)
Number of Employees 127,000
Countries of Operations 80
Countries Where Our Brands Are Sold 180
Consumers Served by Our Brands 4.4 billion
R&D organization 9,000
R&D spending $2.2 (billion)
(Approximate)
6. Inventory = Money
Most of the talk is not about the actual physical
cases…
Please ask the Biblical Pharaoh of EGYPT if Inventory
is a good or a bad thing….
Please ask yourself when sitting on a Toilet if that extra
roll you keep there just in case is a good or a bad thing
6
Thesis
7. [Optional slide for additional info/data]
0
20
40
60
80
100
120
140
160
180
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
billioneuro
EUROPE GAINS to 70% : Eur160
Billions
1.3% CO2 footprint
Inefficiency – Where the real money is
%Load Factor
%empty truck (km)
%Road efficiency
11. Supply chains inefficiency
Transport inefficiency is a €160 Billions loss
and 1.3% of EU27 CO2 footprint!!!
Full, but only 25% of weight
limit
60% empty, but at weight
limit
12. P&G TINA CUBE
Mixing light & Heavy Products
3. EFFICIENCY
Light goods: Only
25% of weight limit
Heavy goods: Only
40% of volume limit
14. Heavy Light
Only one Ideal combination :
Combine Heavy Light – Create optimal density for a vehicle
drive same weight fill % and vehicle fill % - UP!
Horizontal Collaboration - Fill
External opportunities & challenges
15. Easy to handle, transport,
store, interlock, load,
construct, dismantle
& decompose
Smart tag enabled
+ sensors
Standard sizes & dimensions
Unit loads along entire supply chain
Common communication,
planning & monitoring
Optimised space Open networks &
pooled resources
Less network
complexity
Modular box
system
Interconnected comms
Modular logistics units
New handling & storage
technologies
Co-operative logistics networks
Modular dimensions from
cargo container size to tiny
Keyattributes
Potential PI
savings:
22% freight km
50% CO2
15% efficiency
20% loading
Save CO2
New modular load unit concept Smoother interfaces along the supply chain
– create a more efficient, sustainable supply chain by using new modular load units & smoother supply chain interfaces
Vision
Smooth interfaces along the supply chain
• Within inter plant operations
• During trans-shipment
What is the Physical Internet Vision ?
19. Going to the beach
1 person3 persons
4 persons
19
20.
21. Rules of cost/benefits sharingShapley value is easy to calculate…;-)
•It is based on a company’s marginal contribution to groups
of other companies:
•Shapley value is the only gain sharing concept that satisfies all
the following fairness properties:
Efficiency: The complete savings of collaboration are
distributed
Monotonicity: If player A adds more value to every
coalition than player B, player A will get a higher payoff
Dummy: A player that adds no value to any coalition,
will receive no payoff
Symmetry: If two players add exactly the same value to
every other coalition, they will get the same payoff
Individual fairness: No player will suffer from
collaboration (cost level after collaboration is not higher
then individually, i.e. without collaboration)
22. A competitive advantage!
Shapley solution? The new Passenger should pay 50% of the costs
1)The single passenger is now paying as if he is sharing with another passenger
2)The group of 3 are now paying as if they were 6 passengers sharing the costs ! ☺☺☺☺
Note that: a scale of 6 is physically IMPOSSIBLE if you do not COLLABORATE
25. Footprint of Traditional Shopping
CO2 emitted by supermarket shopping
Consumer trip (transport
between home & store)
Packaging (store - shopping
bag)
Retailer operations (store/ DC
/transport)
Manufacturer operations (DC/
transport)
Source: LCA study, P. van Loon, J. Dewaele, L. Deketele - Heriot-Watt University / P&G
30 items/shopping basket - UK B&M supermarket - typical (average) travel behavior (distance, transport mode)
26. Estimating the hidden costs of a
shopping trip
Travel cost >400 eur/annum (car tco)
Time >50 hours(ex trip)
Finding/Picking >100 eur/annum
-> An hidden budget to fund Home Delivery?
27. Direct to Consumer Delivery: a big sustainable businessDirect to Consumer Delivery: a big sustainable businessDirect to Consumer Delivery: a big sustainable businessDirect to Consumer Delivery: a big sustainable business
opportunityopportunityopportunityopportunity
•Value Creation for Consumers: Less car trips=Less cars!Value Creation for Consumers: Less car trips=Less cars!Value Creation for Consumers: Less car trips=Less cars!Value Creation for Consumers: Less car trips=Less cars!
•Return logistics possibilities (e.g. higher package recycle)Return logistics possibilities (e.g. higher package recycle)Return logistics possibilities (e.g. higher package recycle)Return logistics possibilities (e.g. higher package recycle)
•Produce AFTER Demand (Produce AFTER Demand (Produce AFTER Demand (Produce AFTER Demand ( ----> Cash Flow relief!)> Cash Flow relief!)> Cash Flow relief!)> Cash Flow relief!)
•Brand loyal consumers can get subscriptions (E.g. Pampers, Toothbrush, Razors, etc. etc.)…and theBrand loyal consumers can get subscriptions (E.g. Pampers, Toothbrush, Razors, etc. etc.)…and theBrand loyal consumers can get subscriptions (E.g. Pampers, Toothbrush, Razors, etc. etc.)…and theBrand loyal consumers can get subscriptions (E.g. Pampers, Toothbrush, Razors, etc. etc.)…and the
best prices.best prices.best prices.best prices.
•New Service Jobs CreationNew Service Jobs CreationNew Service Jobs CreationNew Service Jobs Creation
Issue is: Scale is essential for the last mile to be efficient.Issue is: Scale is essential for the last mile to be efficient.Issue is: Scale is essential for the last mile to be efficient.Issue is: Scale is essential for the last mile to be efficient.
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28. Opportunity: ALICE!
Freight Transport Modes - Intermodality
Air
Rail
Road
Waterborne
Freight
Freight
Freight
Freight
Sustainable
Chemistry
Manufacturi
ng
Forest-based
Manufacturi
ng
ALICE THE ETP on Logistics
Industrial sectors- Manufacturing
Foundation Science & TechnologyTextiles&
Clothing
Manufacturi
ng
Steel
Manufacturi
ng
FoodforLife
Manufacturi
ng
Foundation Science & Technology
Logistics + Supply Chain
How to Transport What to Transport
The connection between Modes and Industrial ETPs for
Optimized Logistics and Supply Chain Management