1. “Georkestreerde horizontale
samenwerking”
Duurzame logistiek door co-modaliteit en
goederenstroombundeling
Logistieke Barcamp
Innovatiecentrum Limburg - PHL
Bart Vannieuwenhuyse
09-06-11
© 2011

2. World Economic Forum
Supply Chain Study 2009
≡ 24% of good vehicles in the EU are running empty
≡ Average loading of the rest is 57%
≡ Overall efficiency: 43%
≡ Flow imbalance could only explain half of this loss
≡ Knowing that transport and logistics are
responsible for 14-20% of global carbon footprint
≡ Given the network capacity limitations and the
freight flow demand growth forecasts
How much longer can this be justified?
© 2011

3. How to react?
≡ Regulation
≡ e.g. smart road pricing, the Eurovignette directive,…
≡ Innovation
≡ traffic avoidance through product development (e.g. iPad)
≡ design for logistics
≡ transport technology innovation
≡ Horizontal collaboration – bundling of freight flows
≡ “logical, but not easy”
≡ requires
≡ a new type of co-operation (‘co-opetition’)
≡ new logistics actors: impartial orchestrators,…
≡ new types multilateral agreements
≡ trust
≡ expertise
© 2011

4. Vision on logistics
Sustainability
≡ Since 2006 : Trade off
between 3 supply chain
forces further decreases
optimisation and
improvement potential
Supply
Chain
Optimisation
Efficiency Effectiveness
© 2011

5. Sustainability?
≡ Focus on climate – Carbon Footprint
≡ CO2 eq
≡ Long term – global
≡ But also pollution – the environment -
health
≡ NOx, SO2, PM10,…
≡ Short term - local
© 2011

6. Climate Effect
Carbon footprint Multimodal Transport
TRI-VIZOR, 2010.
Rule of thumb
Truck – 1 km – 1 kg CO2eq
Train – 1 km – 12 kg CO2eq
© 2011

7. Vision on logistics
≡ Only cross-company collaboration, consolidation and
bundling of flows can further improve efficiency,
effectiveness and sustainability simultaneously
Effectiveness
Supply
Cross
Chain
Supply
Sustainability Supply Chain
Supply
Chain
Chain
Optimisation
Supply
Chain
Efficiency
© 2011

8. Bundling and consolidation
Point-to-Point: simple
Low effectiveness
Low efficiency
Low sustainability
Decoupling: challenging
High effectiveness
High efficiency through volume
High sustainability
© 2011

9. Horizontal collaboration
The global strategic objectives for the consumer goods
industry:
1. Make our business more sustainable
2. Optimize a shared supply chain
3. Engage with technology-enabled consumers
4. Serve the health and wellbeing of consumers
Future Value Chain 2020: building strategies for the new decade, The Consumer Goods
Forum, Capgemini and HP 2010
© 2011

10. The making of The World's First
Orchestrated Horizontal Collaboration
© 2011

11. What is Orchestration?
≡ Synchronizing supply chains of multiple shippers and generate
substantial gains
≡ Consolidation in geography and time - smart bundling
≡ Managing the consolidation from a shipper’s perspective
© 2011

12. Orchestration guarantees
≡ Impartial moderation (trustee and referee) of the community of
shippers
≡ Anti-trust compliance: full transparency of the community
information while keeping confidential the company-specific
information
≡ Correct gain sharing
≡ Maximum stability of community based on contracts with clear exit
and volume strategies for each member
≡ A pro-active expansion of the community with new flows
≡ Comfort…
© 2011

13. Cross Supply Chain®
Consolidation Methodology
© 2011

14. Cross Supply Chain®
Database
Looking for collaboration partners among:
≡ Almost 80 companies (mostly blue chip)
≡ Almost 50 000 transport lanes
LSP Pharma &
Other Healthcare
High Tech
Automotive
Chemistry
FMCG &
Food
© 2011

15. Multilateral contract
Tri-partite multilateral contract
Extended Carrier Contract Contract of means
Order status, POD • Invoicing services
Clauses with
Shipper 1 Invoice, Reporting • Planning
mechanisms for • Gain sharing calculations
• Gain sharing Shipper 2 • Community management
• Volume variations Individual orders • Expansion, entries & exits
• Entry/Exit Shipper n • Reporting Services
• Continuous improvement
• Advisory
Mandate Orchestration Services
POD, Invoice
Carrier
Combined orders, Reporting
© 2011

16. Orchestration
Process
© 2011

17. ORDER DATA CAPACITY DATA TARIFF DATA
Shippers Carriers / 3PLs Carriers / 3PLs
XML
e-mail
Booking platform (Transwide,…)
SUPPLY CHAIN
REPORTING INVOICING VISIBILITY
Overview combined shipments
WEEK 43
Delivery Capacity Additional Total Pallet Opportunity
POLAND Company Order no Pallets Savings
date Cost Costs cost price costs
Individual Shipments X 80173526 4 6/11/2010 580 580 145,0 35,6
Individual Shipments Y 20100612 28 7/11/2010 1470 1470 52,5 249,4
Total Individual Shipments 32 2050 2050 64,1
Combined Shipment X+Y 32 6/11/2010 1440 325 1765 55,2 285,0
Delivery Capacity Additional Total Pallet Opportunity
POLAND Company Order no Pallets Savings
date Cost Costs cost price costs
Individual Shipments X 80174989 10 8/11/2010 950 950 95,0 198,5
Individual Shipments Y 20100615 23 8/11/2010 1470 1470 63,9 456,5 200
Total Individual Shipments 33 2420 2420 73,3
Combined Shipment X+Y 33 8/11/2010 1440 325 1765 53,5 655,0 200
Delivery Capacity Additional Total Pallet Opportunity
HUNGARY Company Order no Pallets Savings
date Cost Costs cost price costs
Individual Shipments X 80174989 10 8/11/2010 1290 1290 129,0 311,7
Individual Shipments Y 20100820 20 8/11/2010 1770 1770 88,5 623,3
Total Individual Shipments 30 3060 3060 102,0
Combined Shipment X+Y 30 8/11/2010 1800 325 2125 70,8 935,0 0
Delivery Capacity Additional Total Pallet Opportunity
CZECH REPUBLIC Company Order no Pallets Savings
date Cost Costs cost price costs
Individual Shipments X 80185555 5 8/11/2010 850 850 170,0 155,8
Individual Shipments Y 20101150 25 8/11/2010 1350 1350 54,0 187,5
Total Individual Shipments 30 2200 2200 73,3
Combined Shipment X+Y 30 8/11/2010 1650 325 1975 65,8 225,0 0
Community Management Meeting …
TOTAL WEEK 43 Company Pallets
Capacity Additional Total
Cost Costs cost
Pallet
price
Savings
Opportunity
costs
Individual Shipments X 127 17500 17500 137,8 1460,6
Individual Shipments Y 430 45800 45800 106,5 4945,4
Total Individual Shipments
Combined Shipment
WEEK 43
X+Y
TOTAL COST SAVINGS
557
557
63300
51369
63300
5525 56894
113,6
102,1 6406,0 0 Community Portal
Shipper X € 12.972,2 € 1.460,6
© 2011 Shipper Y
TOTAL COST
€ 43.921,8 € 4.945,4
€ 56.894,0 € 6.406,0

18. State of the art Cloud Computing
© 2011

19. Horizontal collaboration – the process
October 2010
≡ Scoping to 8 destinations
≡ Feasibility analysis
≡ Consolidation concept:
≡ multiple pick-up / multiple drop
≡ Combining FTL-LTL
≡ Temperature controlled
≡ Positive Business Case
© 2011

20. Horizontal collaboration – the process
December 2010
≡ Important 3PL selection criteria
≡ All time availability of capacity
≡ Pharma qualified
≡ Temperature controlled
≡ Multimodal
≡ Familiar with regional issues in Eastern Europe
© 2011

21. Horizontal collaboration –
the process Major Issues
≡ Gain sharing mechanisms, based on
≡ Baseline tariff: separate volumes
≡ Consolidated tariff: combined volumes
≡ CO2 calculations (ADEME protocol)
≡ Volume variation rules
≡ Entry/Exit strategy (according anti-trust)
≡ Fee structure for orchestrator: fixed + variable
≡ Orchestration services, incl. paymaster
© 2011

22. Horizontal collaboration – the process
March 2011
≡ Startup lane: Romania
≡ Key: combining FTL and LTL shipments to FTL shipments with double stack
≡ Practicalities
≡ How to realize an ideal combination scheme?
≡ How to obtain lead time expansion where ever possible?
320 Sibiu
450 Brasov
50 160 1600
Braine Lessines Genk Oradea
570 Chitila
Truck Train Truck 580 Bucharest
Departure Genk TUE WED FRI SAT
Arrival Oradea FRI SAT MON TUE
Delivery Romania MON MON TUE WED
Total lead time 5 4 3 4
© 2011

23. Horizontal collaboration – the process
April 2011
First results Romania
≡ Lead time expansions possible if pre-notified by orchestrator
≡ Net cost savings: double digit
≡ CO2 savings: > 50% (multimodal)
≡ Service level improvement
© 2011

24. Horizontal collaboration – the process
May - June 2011
≡ Systematically adding new destinations
≡ Continuous improvement of interfaces and processes
≡ First talks with new community members
© 2011

25. Create a (supply) chain breakthrough...
≡ Applying multimodality & co-modality through bundling of freight flows
The way to go
≡ Creating breakthroughs through an orchestrated horizontal collaboration
The challenge
© 2011

26. Bart Vannieuwenhuyse
TRI-VIZOR NV
Waterfront Research Park
Galileilaan 18
B-2845 Niel
T: +32 3 292 62 10
F: +32 3 292 62 11
www.trivizor.com
© 2011