© 2010 Supply Chain Council. ALL RIGHTS RESERVED. | < filename > | Slide 1 | 1 October 2012

Supply Chain World Europe

Madrid, Spain21-23 October 2012

How Operations Research has become Part of

TNT Express’ DNA

Marco Hendriks

Director Strategic Operations

© 2010 Supply Chain Council. ALL RIGHTS RESERVED. | < filename > | Slide 2 | 1 October 2012

Director Strategic Operations

TNT Express

John Poppelaars

Director Consulting

Ortec Consulting Group

Supply chain wide optimization at TNT ExpressSupply chain wide optimization at TNT Express

Organization & problem

Marco Hendriks

Organization & problem

Marco Hendriks

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Marco HendriksDirector Strategic Operations TNT ExpressMarco HendriksDirector Strategic Operations TNT Express

© 2012 by TNT Express ALL RIGHTS RESERVED

TNT Express wins the Franz Edelman Award 2012!TNT Express wins the Franz Edelman Award 2012!

Intro

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DavideDavide ChiottiChiottiTNT ExpressTNT Express

Marco Marco HendriksHendriksTNT ExpressTNT Express

Chris Chris GoossensGoossensTNT ExpressTNT Express

Lambert van Lambert van derder BruggenBruggenORTEC ORTEC

John John PoppelaarsPoppelaarsORTECORTEC

Yoshiro Yoshiro IkuraIkuraINFORMSINFORMS

Hein Hein FleurenFleurenTilburg UniversityTilburg University

The express business:A very complex oneThe express business:A very complex one

Network reconfigurations

Regulations

Highly volatile Tight service

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Highly volatile demand

Tight service requirements

GO ambitionsGO ambitionsBetter service

Unit cost reduction

Reduce

Better & faster fact-based decision-making

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ReduceCO2 emissions

GO-ProgramGO-Program

Communities of Practice

GO-Academy

Optimizationsolutions

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Cumulative savings from 2008-2011:

€ 207 mln

Supply chain wide optimization at TNT ExpressSupply chain wide optimization at TNT Express

Approach & Methodology:DELTA supply chainApproach & Methodology:DELTA supply chain

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John PoppelaarsDirector Consulting OrtecJohn PoppelaarsDirector Consulting Ortec

European Air NetworkEuropean Air Network

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Scenario examples (on randomized data)Scenario examples (on randomized data)

Service impact

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1. LowCost 95%

2. MediumCost 79%

3. HighCost 72%

4. ExtremeCost 62%

Final result after management decisionFinal result after management decision

TLL

TKUHEL

ARNORB VST

SVG

OSL

GOT

BLL

MMX

BFS

DUB

ORK

SNN

EMA

MME

EDI

LPL

GDN

Airport closure

New airport

X

X

XX

XX

XX

X

X

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STN

CWL

BCN

VIT

MAD

VGO

OPO

LIS

SVQ

VLC

ZAZ

LIN

CIA

BLQ

CTA

LYS

TLS

BSL

GVA

RNS

MRS

WAW

KTWNUE

MUC

ERF

TXL

PRG

BRQ

VIE

BUD

LJU

IST

ATH

OTP

SOFPSR

TSF

HAJ

BOD

CDG

Unchanged airport

X

X

X

X

X

A little storyA little story

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Development of tools: In COP

Development of tools: In COP

Meet 3 times Meet 3 times Meet 3 times Meet 3 times O.R.

Country A representative

COPlead

Country D representative

WFP

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Meet 3 times Meet 3 times per year per year

Meet 3 times Meet 3 times per year per year

Country B representative

O.R.Consultant

WFPrepresentative

Country C representative

University

Early TRANS in ItalyEarly TRANS in Italy

Volume information Italian network

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Screenshot Service Capability AnalyzerScreenshot Service Capability Analyzer

Old situation from Barcelona New situation from Barcelona

Fastest route takes 1 day

Fastest route takes 2 days

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TRANS: Resolvingunder-utilizedlinehauls

TRANS: Resolvingunder-utilizedlinehauls

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linehaulslinehauls

Supply chain wide optimization at TNT ExpressSupply chain wide optimization at TNT Express

GO-AcademyMarco HendriksGO-AcademyMarco Hendriks

GO Academy

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Marco HendriksDirector Strategic Operations TNT ExpressMarco HendriksDirector Strategic Operations TNT Express

GO-AcademyGO-Academy

Effect and impact

• Optimization principles• Overcome resistance to change

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• Overcome resistance to change• Network of talented staff

GO-game

• Understanding fact-based analysis• Managing expectations

Outline of GO-AcademyOutline of GO-Academy

Module Name Topics

1 Introduction module Customers and their supply chains

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2 Strategic optimization Infrastructure design (DELTA)

3 Networks & PUD Planning in Networks and PUD (TRANS & SHORTREC)

4 Hubs & depots Bottleneck theory, mechanization principles

5 Implementation Change management techniques

6 Graduation Presenting for impact, elevator pitches

Benefits of GO-AcademyBenefits of GO-Academy

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Supply chain wide optimization at TNT ExpressSupply chain wide optimization at TNT Express

Results & conclusionsMarco HendriksResults & conclusionsMarco Hendriks

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Marco HendriksDirector Strategic Operations TNT ExpressMarco HendriksDirector Strategic Operations TNT Express

“A successful tool is one that was used to do something undreamt of by its author” Stephen C. Johnson

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CO2 emission reduction of 283 Million kg (1,000 trucks 7 times around the earth)

Super sector leader transportation category of Dow Jones Sustainability index

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TransportabilityEven to other organizationsWorld Food Programme

Challenges

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ChallengesConvince people to trust & implementFact-based analysis might differ from people expectationsBenefit tracking & changing business environment

Lessons learnedAct as a team & we will overcome them

Impact & value (2008 – 2011)

GO Subprogram Accumulated Savings

Networks 48 M€

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Networks 48 M€

PUD / Warehouse 27 M€

Supply Chain 132 M€

Total 207 M€

Thank youThank you

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