Trends Changing the Shape of Supply Chain Networks

Dr Andrew Palmer

Preston Solutions Ltd

IPIC 2019, London 10th July 2019

The Supply Chain Chronology

➢ 1970’s Oil crisis – proliferation of depots

➢ 1980’s Stock reduction

➢ 1990’s Customer service

➢ 2000’s Internet home shopping

➢ 2010’s Sustainability

Logistics Trends – 2000 onwards

Delivery Reliability and

Congestion

Vertical and Horizontal

Collaboration

Multi Modal

Multi Channel Retailing /

Home Delivery

Different Types of

Warehouses

Global Sourcing / Focused

Manufacturing

Product Line Proliferation

All Year Seasonal Produce

Rapid Replenishment

Reverse Logistics

Sustainability

City Logistics

Consumer needs – and the supply chain response

– produce fragmented and additional product flows

Source: Prof. Alan Waller, ELUPEG, 2012

What Causes Supply Chain Networks to Change

➢ Internal drivers such as:

• Cost reduction

• Customer demands

• Service level

• Increased differentiation

• Increased competition

• Increased regulation

• Reduce CO2

• Sustainability

What Causes Supply Chain Networks to Change

➢ External influences such as:

• Economic

• Environmental

• Social

• Political

• Technological

• Legislation

Sustainability

Zero emissions by 2050

7

Source: FT, 19th June 2019

Measures to achieve zero emissions

The SRF Roadmapping model

▪ CSRGT base data

▪ Predicted to 2050• Cost of fuel

• Carbon price (£/tCO2e)

• Annual kilometres

• New vehicle fleet improvement in fuel efficiency

• GDP/manufacturing output

▪ Vehicle and logistics measures with predicted fuel and kilometre savings and costs

▪ Predicted percentage take up of measures

▪ NPV and max CO2 scenarios

Measures needed to achieve zero emissions

Use trailer with sloping front roof (double deck/high cube vehicles) Reschedule deliveries to inter-peak periods and evening / night

Use tear-drop trailers Use of larger and heavier vehicles (long haul only)

Reduce engine idling Backhaul / Fronthaul

Switch from powered to fixed-deck trailers (for double-decks) Synchronised consolidation

Reduce vehicle tare weight Use of urban consolidation centres

Install cab roof fairing Restructuring of the supply chain network

Install body / trailer side panels Use of alternative transport modes

Install side skirts Extending delivery times/relaxation of JIT pressures

Install boat tails Platooning

Adopt automated manual vehicle transmission Circular economy

Set vehicle with slower speed Local manufacturing/on shoring

Reduce height of vehicle Freight exchanges/IFTS supporting the physical internet

More regular tyre inflation checks Slow logistics

Use low ‘rolling-resistance’ tyres

Fit super singles

Automatic tyre pressure adjustment

Use of fuel additives

Increase use of hybrid vehicles

Use of lubricants with lower viscosity

Give drivers training in fuel efficiency

Monitor and manage driver fuel performance (including use of telematics)

Autonomous vehicles

Use telematics to optimise vehicle routing

Increase use of electric vehicles

Increase use of biodiesel vehicles

Increase use of CNG vehicles

Increase use of dual-fuel vehicles (Diesel + CNG)

Increase use of LNG vehicles

Increase use of dual-fuel vehicles (Diesel + LNG)

Vehicle/Driver Measures Logistics measures

Take up percentage of electric vehicles

• Peak level of adoption: all rigids 74%, articulated 35%

• Year of peak: 2050

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Artic Large rigid Small rigid

Take up percentage of driver training & monitoring

• Peak level of adoption: 67%

• Year of peak: 2030

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2020 2025 2030 2035 2040 2045 2050

Give drivers training in fuel efficiency Monitor and manage driver fuel performance (including use of telematics)

Aerodynamic vehicles and driver training

DfT 2016

Take up percentage of longer heavier vehicles

• Peak level of adoption: 50%

• Year of peak: 2043

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2020 2025 2030 2035 2040 2045 2050

Use of larger and heavier vehicles

Double Deck Trailers

Longer Semi Trailers

Longer Heavier Vehicles(Mega Truck)

Larger Higher Capacity Vehicles

Optimising backhaul & fronthaul

• Peak level of adoption: 95%

• Year of peak: 2035

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2020 2025 2030 2035 2040 2045 2050

Backhaul/Fronthaul

Longer & slower deliveries

• Peak level of adoption: 95%

• Year of peak: Rescheduling deliveries off-peak - 2024, extending delivery times & reducing JIT pressure -2043

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2020 2025 2030 2035 2040 2045 2050

Reschedule deliveries to inter-peak periods and evening / night Extending delivery times/relaxation of JIT pressures

Measures with greatest impact:

Vehicle-level Measure CO2 Savings (%)

Urban Regional Long Haul

Electric vehicles 45% 35% 27.5%

LNG vehicles 15.5% 15.5% 15.5%

CNG vehicles 13% 13% 13%

Dual fuel vehicles (diesel + LNG/CNG) 10.5% 10.5% 10.5%

Driver training in fuel efficiency 4% 7% 9%

Monitoring driver fuel performance 4% 7% 9%

Logistics Measure Fuel Savings (%) Travel Savings (km %)

Longer heavier vehicles 14.3% 13.9%

Optimising backhaul & fronthaul 8.2% 7.9%

Reschedule deliveries off-peak 4.25% 4.25%

Extend delivery times & reduce JIT pressure

5% 3%

Results of roadmapping model

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2010 2020 2030 2040 2050

Positive Net Present Value Scenario

Aerodynamics Tyre measures Alternative fuels

Driver performance Logistics measures Miscellaneous

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2010 2020 2030 2040 2050

Maximum CO2 Saving Scenario

Aerodynamics Tyre measures Alternative fuels

Driver performance Logistics measures Miscellaneous

60% reduction in CO2

emissions over 1990 levels

78% reduction in CO2

emissions over 1990 levels

Opportunities for Sustainable Cost Effective Logistics

• Optimising supply chain networks

• Collaboration

• Supporting systems and telematics

• Vehicle types

Load capacity utilisation and empty running

Local sourcing

Road share of freight – modal split

• Driving style

• Aerodynamics and tyres

• Avoiding congestion (routing & scheduling, out of hours delivery)

Kms per litre of fuel –engine/energy

efficiency

• Fuel type (electric, biodiesel, biomethane, hybrid)

CO2 emissions per litre of fuel – carbon

content of fuel

Few

er

Km

sFriendlier

Km

s

Contributing to the Physical Internet

Thank You

Questions?

Trends Changing the Shape of Supply

Chain Networks

IPIC 2019, London 10th July 2019