Supply Chain World Europe

Madrid, Spain 21-23 October 2012

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

How Operations Research has become Part of TNT Express DNA

Marco Hendriks Director Strategic Operations TNT Express John Poppelaars Director Consulting Ortec Consulting Group

2010 Supply Chain Council. ALL RIGHTS RESERVED. |

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Slide 2

1 October 2012

Supply chain wide optimization at TNT Express

Organization & problem
Marco Hendriks
Director Strategic Operations TNT Express

2012 by TNT Express ALL RIGHTS RESERVED

TNT Express wins the Franz Edelman Award 2012!

Intro

Davide Chiotti TNT Express

Marco Hendriks TNT Express

Chris Goossens TNT Express

Hein Fleuren Tilburg University

John Poppelaars Lambert van der Bruggen ORTEC ORTEC

Yoshiro Ikura 4 INFORMS

The express business: A very complex one

Network reconfigurations Regulations

Highly volatile demand

Tight service requirements

Better service

GO ambitions

Unit cost reduction

Better & faster fact-based decision-making Reduce CO2 emissions

GO-Program

Optimization solutions

Communities of Practice

GOAcademy Cumulative savings from 2008-2011:

207 mln

Supply chain wide optimization at TNT Express

Approach & Methodology: DELTA supply chain
John Poppelaars Director Consulting Ortec

European Air Network

Scenario examples (on randomized data)

Service impact

1. Low Cost 95%

2. Medium Cost 79%

3. High Cost 72%

4. Extreme Cost 62%

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Final result after management decision

OSL TKU

X
HEL

X
SVG

ORB

X
VST ARN

TLL

Airport closure
X
SNN

EDI BFS

X
DUB

GOT BLL MMX

X
LPL

MME

New airport Unchanged airport

X
ORK

X
CWL

EMA

GDN

X
STN HAJ TXL ERF WAW

RNS CDG BSL

NUE

PRG

KTW BRQ

MUC

VIE

X
VGO OPO VIT TLS MAD ZAZ BCN VLC MRS BOD LYS

GVA LIN

X
TSF LJU

BUD

OTP BLQ

LIS

X
PSR CIA

SOF

IST SVQ

CTA

ATH

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A little story

12

COP lead Country D representative Country A representative

Development of tools: In COP

WFP representative

Meet 3 times per year

O.R. Consultant

Country C representative University

Country B representative

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Early TRANS in Italy

Volume information Italian network

14

Screenshot Service Capability Analyzer

Old situation from Barcelona New situation from Barcelona
Fastest route takes 1 day Fastest route takes 2 days

15

TRANS: Resolving under-utilized linehauls

16

Supply chain wide optimization at TNT Express

GO-Academy
Marco Hendriks Director Strategic Operations TNT Express

GO Academy

17

GO-Academy
Effect and impact Optimization principles Overcome resistance to change Network of talented staff GO-game Understanding fact-based analysis Managing expectations

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Outline of GO-Academy
Module 1 2 3 4 5 6 Name Introduction module Strategic optimization Networks & PUD Hubs & depots Implementation Graduation Topics Customers and their supply chains Infrastructure design (DELTA) Planning in Networks and PUD (TRANS & SHORTREC) Bottleneck theory, mechanization principles Change management techniques Presenting for impact, elevator pitches

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Benefits of GO-Academy

20

Supply chain wide optimization at TNT Express

Results & conclusions

Marco Hendriks
Director Strategic Operations TNT Express

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

22

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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Transportability
Even to other organizations World Food Programme

24

Challenges
Convince people to trust & implement Fact-based analysis might differ from people expectations Benefit tracking & changing business environment

Lessons learned
Act as a team & we will overcome them
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Impact & value (2008 2011)

GO Subprogram Networks PUD / Warehouse Supply Chain Total Accumulated Savings 48 27 132 207
M M M M

26

Thank you

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