© 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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