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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
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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)
Copyright © 2011, P&G. L Deketele. All rights reserved.
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
RETAIL DC
RETAIL SHOP
SHOPPER
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
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Thesis
[Optional slide for additional info/data]
This is bad for both profitability and environment
EUROPE GAINS to 70% : Eur160 Billions
1.3% CO2 footprint
Inefficiency – Where the real money is
Cost of inefficiency
%Load Factor
%empty truck (km)
%Road efficiency
FACT Slow steaming
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“ We just start production a week before”
FACT Just in Time….
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How to apply it correctly?
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!!!
Full, but only 25% of weight limit
60% empty, but at weight limit
This is bad for both
profitability and environment
P&G TINA CUBE Mixing light & Heavy Products
3. EFFICIENCY
Light goods: Only 25% of weight limit
Heavy goods: Only 40% of volume limit
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Why stay within one company?
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
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
Key
attr
ibut
es 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
Visi
on
Smooth interfaces along the supply chain • Within inter plant operations
• During trans-shipment
What is the Physical Internet Vision ?
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
1 person 3 persons
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!
Freight Transport Modes - Intermodality
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ALICE THE ETP on Logistics
Industrial sectors- Manufacturing
Foundation Science & Technology Te
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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