cargo pooling with cinatis way
Post on 24-Jul-2015
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Web-based solutions editor, for supply chain communities
SAS : Company with a capital of € 94,000 supported by Logoden, OSEO, Brittany Regional Council and the French ‘Technopole’ network.
Background : Editor of web-solutions for logistical activities (SaaS-based)
Project : to become the first collaborative transportation network in Europe
Board : 3 founder-partners from supply chain universe.
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FILLING RATE FOR THE TRUCKS OPERATED ON FRENCH ROADS
Or why will the cargo pooling be increased in Europe ?
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67%
How to reduce transportation costs?
Cargo pooling with Cinatis Way
EVOLUTION OF TRANSPORTATION CONSTRAINTS
What are the actual and future constraints for the transportation?
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In the 20th century, transportation was dedicated!
A transport multiplication, with common starting and finish points
Obviously every shipper optimize … within the limits of its possibilities (volume/appointments)
This competitive system creates additional costs and issues with challenging customers
Routes are operated even if trucks aren’t complete (respect of commitment)
Operative times and run distances are high (carriers)
As a result a filling rate of 2/3*
5 * Source ADEME
Evolution Benchmark
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We can admit that there is no true praise!
Increase of run kilometers
Increase of fuel consumption
Increase of greenhouse gas
Infrastructures saturation
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And it won't be better…
The forthcoming environmental tax in Europe will emphasize the
transportation cost in the product price. It would be between 0,025€ and 0,14 € per kilometer (between + 3% and +10%).
An alternative supply for road transport is almost inadequate in Europe and doesn't offer any economically satisfactory solution (1,5% on avg.)
The final consumer becomes aware of the environmental weight of logistics during the product fabrication.
The demands of industrial customers or retailers are often antonymic with the transportation cost optimization. For example : requirement for being delivered oftener and for cheaper
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In summary, transport faces a structural pressure without precedent
• Increased energy cost with an important varation of fuel indexation
• A new taxation weighing by 2013 to 10% on transportation cost
• Permanent strain on prices
• 54% of logistics costs affects transport
Costs
• A weak filling rate of vehicles
• Increased greenhouse gases
• Modal transfer from road to rail or river is hard
• Crowed infrastructures
Environment
• Constant flow imbalance
• Hazards on transport means availability
• Deliveries smaller and smaller
• High deliveries frequencies
• Business rules are changing constantly
• Many transportation partners
Organization
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The actual context leads us to reconsider land organization, and especially transfers in order to obtain …
… more economical transports :
Growing a regional dynamic, with industrials and carriers who know how to exceed
non-disclosure rules of their business
Promoting occupancy rate of trucks and avoiding empty returns
Reducing road mending costs
Preserving trunk roads doomed to saturation
… more ecological transports :
Furthering NGV or electric vehicles
Training drivers to eco-driving
Taking on multimodal transport in order to reduce greenhouse gases and carbon footprint for every transported product
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ECO
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In summary, 4 interacting issues to be resolved
Relationships with carriers can’t only be restricted to freight costs but must allow to generate productivity gains for the carriers.
Manufacturers and retailers transport organizations must overpass their limits and make sure to reach the optimum in the network they belong
Optimal solutions will be met by transportation scheduling just like the best practices used for industrial activities.
The organizations and deployed means have to be chosen due to their environmental efficiency.
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Create a new relationship model
with carriers
Innovate with new transport outlines
Anticipate the transport activity
at middle and long term
Reduce the environmental
impact
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Cargo pooling consists in bringing stakeholders together by compatibility and organizing their collaboration
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Cargo pooling with Cinatis Way
The solution is: a pooled supply chain !
Cargo pooling consists in rolling out a business-to-business collaboration in order to aggregate cargos within the same vehicles.
Pooling acts simultaneously on 3 issues:
Reduce the transport costs
Reduce the greenhouse gases emissions
Increase delivery frequencies
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The results obtained for the first 35 cargo pooling initiatives encourage an exponential development for its approach
Cargo pooling initiatives have been promoted by retailers, manufacturers, SMB and global companies.
For whatever players size, they obtain gains according to the flow they aggregate.
Higher the share of pooled flow is, bigger the gains are for every player.
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Andros, Auchan, Bénédicta, Bongrain, Bel, Bridgestone, Cadburry, Carrefour, CAM 53, CAM 56, Casino, Castorama, CEPA LDC, CECAB, Coca Cola, Colgate, Conforama, Continental, Coopagri, Damart, Danone, Entremont, Eugène Perma, GSK, Heinz, Henkel, Ikea, Kronenbourg, Lactalis, Lustucru, Marie, Mars, Materne, Monoprix, Montblanc, Nestlé, Normand’vie, Nutrimaine, Ovomaltine, Picard, Reckitt, Sara Lee, Senoble, Sodiaal, Sunny Delight, Unilever, United Biscuits, Vegam, Verywear, Yoplait,
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Carrefour has already "pooled" 400 suppliers but some issues have to solved
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1 network with 10 consolidation DC
400 SMB suppliers with a same point of delivery
Optimized truck for inbound flows
Products shortages in stores reduced by 50%
Inbound transport costs decreased by 6%
Delivery frequencies multiplied by 3
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Initiative of 2 major companies
Cadbury and Sara Lee have launched a cargo polling project in 2004, based a platform (annual factory pool of 460000 pallets toward 7 retailers i.e. 40 delivery points). Every point is delivered from 2 to 4 times per week. The project goals are reached :
The solution meets the customers needs
Delivery frequencies are increased
Logistics costs are decreased
Order-fill ratio is raised
For the customers, the benefits are also significant. For example for Carrefour :
Stock level have been reduced by 38% and 15%
Order-fill ratio has risen by 0,6 point for 1 year
Deliveries have dropped by 36 %
93 tons of CO² have been cut annually
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Gains for Cadbury - Sara Lee Supply Chain
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Benefits Drawback
Global
Drop in transport costs : full-loaded trucks optimization, balances order elimination
Complex process to roll out
Fall of CO2 emission Rise in constraints
Process and organizations standardization (daily issues can be spotted and solved)
Improvement in forecast and reactivity : cargo pooling ensures spreading over time activity
Better customer service
Retailers
Raise in delivery frequencies Increased suppliers weight, even more so they are numerous
Increase in order-fill ratio
Drop in stock
Suppliers
Competitive benefit from logistics costs pooling, improved management for product launching, seasonal products and special offers
Long-term bond (on 2 to 4 years) at least with one or several partners Increase in picking costs (layer/parcel, vs pallet)
Source JC Festinger - Aslog Cargo pooling with Cinatis Way
An initiative from food-processing SMB enables to increase delivery frequencies fourfold without over cost
5 dry-goods shippers are pooling their cargos to deliver Carrefour platforms by multi-pick
Solution operated trough 2 platforms with 27 pallets per shipment => filling rate of 82%
Order-fill rate of 100% since the beginning
Drop in transportation costs of 25%
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An initiative from food-processing SMB enables to increase delivery frequencies fourfold without over cost
Faster
More productive
Less empty
Less km
Less CO2 emissions
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More reliable transport
Better mobility
Stronger reactivity
Costs control
Less receipts in platform
Less stock (-15d)
Less shortages in store
MANUFACTURER CARRIER RETAILER
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In summary, 3 main benefits arise from the 35 first benchmarks and explains the enthusiasm for this new action lever
1) More economical transports improving occupancy rate of trucks and optimizing transportation plan
2) More eco-friendly transport reducing the mileage and the fuel consumption
3) The opportunity to make the most of a higher delivery frequency owing to the volume per destination increase
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The 5 to 15% gain is depending on the volume
we can inject into the pooling network
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The cargo pooling benefits to all the logistics processes
Better schedule of supply and/or customers orders Synchronization of supply paces requires to improve its orders scheduling and to increase
its cadence.
Better anticipation and visibility for picking orders
More accurate scheduling of suppliers or customers orders allows to better anticipate the picking orders in the warehouse
Higher productivity for docks receipt
Drop in receipt vehicles number permits to cut off fix operations per vehicle (docked vehicle, vehicle control, receipt readying)
Drop in areas and resources dedicated to goods receipt and deliveries
Drop in vehicles number optimizes the use of warehouse resources for goods receipt and shipments.
Fall in products shortages Rise in delivery frequencies enables to minimize product shortage risks without
deteriorating transportation costs
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In overview, cargo pooling is the best solution for logistics optimization for the years to come
Structure all the logistical processes
Entities’ synchronization of every group member enables to improve all the processes (scheduling, supply, production, picking order,
administrative management)
Improve the service
Cargo pooling ensures to increase delivery frequencies without
deteriorating transport costs and lowering stock shortages
Conciliate results and sustainable development
The decrease in vehicles number makes it possible simultaneously to improve the
transport costs and to reduce the greenhouse gases emission for transportation activities
Work on every lever concurrently
Cargo pooling comply as a complement with so far antonymic goals: generate savings
improving the environmental impact and the service
Cargo pooling
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