Sergio Barbarino Research Fellow P&G Supply Network Innovation Center. And what happens inside the Containers? Port Logistics in the Physical Internet Era Sergio Barbarino Research Fellow P&G Supply Network Innovation Center.

Physical Internet

Sustainable Supply Chains What do the stakeholders want in Transport and Logistics? PEOPLE / Consumers Get and use the products they want, when they want them. E-commerce, Store and shelf availability, full visibility, sustainability Increase satisfaction PLANET / Society Increase economic growth with reduction of environmental impact Reduction of energy utilization Increased sustainability PROFIT / SHIPPERS ( Manufacturers/ retailers/ trade) and Logistic Service Providers Increase customer satisfaction (B-to-B and B-to-C) Increase service level Reduce cost Reduce environmental impacts in the supply chain Full asset utilization

Systemic Approach: Systems of Systems Further develop implementation plans for the roadmaps and monitoring Follow up past & current projects and best practices: what has been accomplished, which services and products introduced in the market and how this relates to the roadmaps. Deeper analysis in the sense of what changes the roadmaps will imply, which are the barriers and what can trigger the change industry take up (including economic aspects).

TRANSPORT COLLABORATION But just Data crunching is not enough….You also need to agree how to share the costs and the benefits of the collaboration. End 2012 the Economy Nobel Prize went to Mr . Shapley that has solved the issue of cost/benefit allocation using collaborative game theory We have developed the concept to a ready applicable framework in the project CO3. and we are now working on a vision for a totally open and efficient Logistic network: the Physical Internet

Load efficiency is tough if you stay alone This is bad for both profitability and environment Full, but only 25% of weight limit 60% empty, but at weight limit

Laundry and/or Shampoo “Cube-Fill” Concept Potato Chips Volume 90% Weight 20% Diapers Volume 90% Weight 20% Laundry and/or Shampoo Volume 57% Weight 100% Container Limit = 87m3 & 24 tonnes Overall efficiency = 80% weight & 80% volume

CargoStream: making collaboration easy DATA SHARING PLATFORM That’s where CargoStream comes in. CargoStream acts as a data sharing platform where all actors can share their data with the community in the way they want. Shippers will share transport needs via a copy of their transport instructions. Logistic Service providers will be able to offer their services via Apps on the platform Terminals and operators will share their schedules, their lanes, their timetables Value Added Service Providers or Optimizers will give insights on possible matches between overlapping volume of different shippers SHIPPERS LOGISTICS SERVICE PROVIDERS INTERMODAL OPERATORS VALUE ADDED SERVICE PROVIDERS TERMINALS AND RAIL, BARGE OR SHORTSEA OPERATORS OPTIMIZERS, 4PL

SYNCHROMODALITY FROM A ONE LEAD TIME MODEL WITH PLANT STOCK TO A MULTIPLE LEADTIME MODEL WITH PIPELINE STOCK

Current best industry practice Ship the stable demand via reliable slow mode About 20-30% of freight volume *Dong, C., Boute, R., McKinnon, A., and Verelst, M., 2017. Investigating synchromodality from a supply chain perspective. Unpublished working paper. + Gijsbrechts, J., Boute, R., 2017. Synchronization of intermodal freight shipments in the sharing economy. Unpublished working paper.

With synchromodality a breakthrough modal shift Total logistics costs (transportation and inventory) optimization allows to increase slow mode shift from 20-30% to 60-70%

OBOR opportunity Historically P&G has been focused on Product Innovation (i.e. Synthetic Detergent, Diapers, Toothpaste with Fluoride, etc). We also pioneered commercial innovation (i.e. Soap Operas, Marketing, Joint Business Planning). Now we are adding a third plank to ensure holistic approach. We call this Supply Innovation. It is how we are innovation our Supply Network capabilities. The following slides show the Supply Innovation strategy, strategic themes, and examples of innovations within this area. In P&G R&D terms this is equivalent to a Supply Chain Transformative Platform Team (TPT) Arrival first DB Schenker Rail freight train Zhengzhou to Hamburg-Billwerder, 2 August 2013. Left-right: Y. Konuspayev (Caspian embassy); A. Hedderich (chairman management DB Schenker Rail); K. Fleckenstein (MEP); Dr. R. Grube (DB chairman); Yi Ma (major of Zhengzhou); F. Horch (Senator transport Hamburg).

Eurasian Freight Corridors – A Synchromodal Opportunity Freight traffic China-Europe ~ 90% Sea/40 days < 10% Air/1 day ~ 1% Railway/ ~15 days ~ 30 freight trains per week

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Use your capacity, share your assets MAY THE LOAD BE WITH YOU