Procter & Gamble Eurocor
Sergio Barbarino
My career at Procter & Gamble
Personal
2011 Research Fellow, SNIC
- Age, 46
2007- 2011 – Principal Engineer Process Breakthrough
- Living in Bruxelles - Rower - Sommellier
- Started the First Global Supply Network Innovation Center 1991-2007 – Various Positions as Process Development Engineer - Brands: Mr. Clean, Viakal, Tide, Lenor, Fairy
@ University
- MBA Solvay 2004 - Master Chem Eng. 1991 - UNINAPOLI
- Plants: Europe, China, India, Egypt, Morocco, Mexico, Guatemala, Russia etc. - Locations: Brussels, Rome, Cincinnati
Quote Vague, but exciting! (M. Sendall)
P&G at a Glance Net Sales Number of Employees Countries of Operations Countries Where Our Brands Are Sold Consumers Served by Our Brands R&D organization R&D spending
$84 (billion) 127,000 80 180 4.4 billion 9,000 $2.2 (billion) (Approximate)
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P&G network in Western-Europe
P&G Logistics operations in WE • 30 plants • 15 regional DC’s • 50 storages for finished products • 60 customization centers
Copyright © 2011, P&G. L Deketele. All rights reserved.
P&G Finished Product Flow
“Normal flow”
PLANT
PLANT DC
REGIONAL DC
Copyright © 2011, P&G. L Deketele. All rights reserved.
RETAIL DC
RETAIL SHOP
SHOPP ER
Thesis 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
Inefficiency – Where the real money is
[Optional slide for additional info/data] ncy ficie f e n i t of
Cos
%Load Factor %Road efficiency %empty truck (km)
EUROPE GAINS to 70% : Eur160 Billions
This is bad for both profitability and environment
1.3% CO2 footprint
FACT Slow steaming
“ We just start production a week before”
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FACT Just in Time….
How to apply it correctly?
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FACT Goods average travelling speed is slow… no matter how fast the mean of transport
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Supply chains inefficiency Transport inefficiency is a €160 Billions loss and 1.3% of EU27 CO2 footprint!!!
th This is bad for bo profitability and environment
Full, but only 25% of weight limit
60% empty, but at weight limit
P&G TINA CUBE Mixing light & Heavy Products 3. EFFICIENCY
Light goods: Only 25% of weight limit
Heavy goods: Only 40% of volume limit
Why stay within one company?
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External opportunities & challenges
Heavy Light Horizontal Collaboration - Fill
Only one Ideal combination :
Combine Heavy Light – Create optimal density for a vehicle drive same weight fill % and vehicle fill % - UP!
What is the Physical Internet Vision ? – create a more efficient, sustainable supply chain by using new modular load units & smoother supply chain interfaces
Smoother interfaces along the supply chain
Vision
New modular load unit concept
Modular dimensions from
Modular box
cargo container size to tiny
system
Key attributes
Easy to handle, transport, store, interlock, load,
Optimised space
Open networks &
Less network
pooled resources
complexity
Standard sizes & dimensions
Interconnected comms
Potential PI
Unit loads along entire supply chain
Modular logistics units
savings: 22% freight km 50% CO2 15% efficiency 20% loading
construct, dismantle
New handling & storage
& decompose
technologies Co-operative logistics networks
Smart tag enabled + sensors
Common communication, planning & monitoring
Smooth interfaces along the supply chain
•
•
Within inter plant operations During trans-shipment
Save CO2
π-Concept | Positioning the Physical Internet.
Source: Montreuil (2012).
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Cooperation experiment Going to the beach
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Going to the beach
3 persons
1 person
4 persons
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Rules of cost/benefits sharing
Shapley 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)
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
Another asset underutilization of transport in Europe…
People Mobility insights
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)
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?
Direct to Consumer Delivery: a big sustainable business opportunity • Value Creation for Consumers: Less car trips=Less cars! • Return logistics possibilities (e.g. higher package recycle) • Produce AFTER Demand ( -> Cash Flow relief!) • Brand loyal consumers can get subscriptions (E.g. Pampers, Toothbrush, Razors, etc. etc.)…and the best prices. • New Service Jobs Creation Issue is: Scale is essential for the last mile to be efficient. Around the World Heritage Postal companies own the most capillary network. A few of them (DHL, B-Post) have declared strategic to develop it for goods delivery as traditional mail services decline.
Opportunity: ALICE! ALICE THE ETP on Logistics
The connection between Modes and Industrial ETPs for Optimized Logistics and Supply Chain Management Logistics + Supply Chain What to Transport
How to Transport
Steel
Food for Life
Forest-based
Manufacturi ng
Manufacturi ng
Manufacturi ng
Clothing
Manufacturi ng
Chemistry
Waterborne Freight
Sustainable
Road Freight
Manufacturi ng
Rail
Air Freight
Freight
Foundation Science & Technology
Textiles &
Industrial sectors- Manufacturing
Freight Transport Modes - Intermodality
Foundation Science & Technology
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