Physical Internet Manifesto Globally transforming the way physical objects
are handled, moved, stored,
realized, supplied and used
Benoit Montreuil
Canada Research Chair in Enterprise Engineering
CIRRELT, Interuniversity Research Center
on Enterprise Networks, Logistics & Transportation
Université Laval, Québec, Canada
Version 1.8: 2011-03-28
π www.PhysicalInternetInitiative.org
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 2/88
www.PhysicalInternetInitiative.org
Acknowledgements The Physical Internet Manifesto has greatly benefited from
the contribution of esteemed colleagues
America
CIRRELT Research Center:
• Teodor Crainic - UQAM
• Michel Gendreau - Université de Montréal
• Olivier Labarthe, Mustapha Lounès & Jacques Renaud - Université Laval
CICMHE, College-Industry Council for Material Handling Education:
• Russ Meller – University of Arkansas
• Kevin Gue & Jeff Smith – Auburn University
• Kimberley Ellis – Virginia Tech
• Leon McGinnis – Georgia Tech
• Mike Ogle – MHIA
Europe
• Rémy Glardon – EPFL
• Éric Ballot, Frédéric Fontane – Mines ParisTech
• Rene De Koster – Erasmus University
• Detlef Spee – Fraunhofer Institute for Material Flow and Logistic
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 3/88
www.PhysicalInternetInitiative.org
Macroscopic Positioning
CLAIM The way physical objects are
moved, handled, stored, realized, supplied and used throughout the world is not sustainable economically, environmentally and socially
GOAL Enabling the global sustainability
of physical object movement, handling, storage, realization, supply and usage
VISION Evolving towards a worldwide Physical Internet
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 4/88
www.PhysicalInternetInitiative.org
Supporting the claim
CLAIM The way Physical objects are
moved, handled, stored, realized, supplied and used throughout the world is not sustainable economically, environmentally and socially
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 5/88
www.PhysicalInternetInitiative.org
Thirteen unsustainability symptoms Leading Us Toward Hitting the Wall Real Hard
1. We are shipping air and packaging
2. Empty travel is the norm rather than the exception
3. Truckers have become the modern cowboys
4. Products mostly sit idle, stored where unneeded, yet so often unavailable fast where needed
5. Production and storage facilities are poorly used
6. So many products are never sold, never used
7. Products do not reach those who need them the most
8. Products unnecessarily move, crisscrossing the world
9. Fast & reliable intermodal transport is still a dream or a joke
10. Getting products in and out of cities is a nightmare
11. Networks are neither secure nor robust
12. Smart automation & technology are hard to justify
13. Innovation is strangled
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 6/88
www.PhysicalInternetInitiative.org
Transportation costs are the single largest contributor to total logistics costs, with trucking being the most significant subcomponent.
Trucking costs account for roughly 50% of total logistics expenditures and 80% of the transportation component.
Trucking revenues in 2005 increased by $74 billion over 2004, but carrier expenses rose faster than rates, eroding some of the gain.
Fuel ranks as a top priority at trucking firms as substantially higher fuel prices have cut margins. The U.S. trucking industry consumes more than 650 million gallons of diesel per week, making it the second largest
expense after labor.
The trucking industry spent $87.7 billion for diesel in 2005, a big jump over the $65.9 billion spent in 2004. [2]
References: 1]: “Transport in Logistics”, Chap. 12 in An Introduction to Supply Chain Management, Ed. By Donald Waters [Palgrave Macmillan] (2003)
[2]: Wilson R. A., “Economic Impact of Logistics”, Chap. 2 in Logistics Engineering Handbook , 2008
Overall, most goods travel by road. In the UK, 65% of all freight is moved by road, or about 160 billion tonne kilometres out of 240 billion tonne kilometres.
In the USA, for example, there are 40,000 public carriers and 600,000 private fleets. With so many operators competition is likely to be more intense and pricing more flexible. [1]
Trucks and containers are often half empty at departure, with a large chunk of the non-emptiness
being filled by packaging
We are shipping air and packaging Unsustainability symptom 1
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 7/88
www.PhysicalInternetInitiative.org
Reference: [1]: McKinnon A., “Road transport optimization” Chap. 17 in Global Logistics New Directions in Supply Chain Management (2007), Ed. by Donald Water
Statistical evidence that around 30 per cent of truck-kilometres are run empty, illustrating huge inefficiency in road haulage and enormous potential for increasing back loading.
In Britain, the proportion of truck-kilometres travelled empty felt from 33 per cent in 1980 to 27 per cent in 2004, yielding significant economic and environmental benefits. [1]
Other things being equal, if the empty running percentage had remained at its 1980 level, road haulage costs in 2004 would have been £1.2 billion higher and an extra 1 million tonnes of carbon dioxide would have been emitted by trucks (McKinnon, 2005).
Vehicles and containers often return empty, or travel extra routes to find return shipments
Vehicles leaving loaded get emptier and emptier as their route unfolds from delivery point to delivery point
Empty travel is the norm rather than the exception Unsustainability symptom 2
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 8/88
www.PhysicalInternetInitiative.org
Truckers have become the modern cowboys Unsustainability symptom 3
So many are nearly always on the road, so often away from home for long durations
Their family life, their social life and their personal health are precarious
References: [1]: “Consequences of Insomnia, Sleepiness, and Fatigue: Health and Social Consequences of Shift Work “, http://cme.medscape.com/viewarticle/513572_2 [2] : Wilson R.A. “Economic Impact of Logistics”, in Chap. 2 in Logistics Engineering Handbook, 2008
The shift workers with the lowest mean hours of daily sleep are truck drivers, at 3.5 hours/24 hours
Fatigue and sleep deprivation are important safety issues for long-haul truck drivers
A National Transportation Safety Board study examined the effects of duty shifts and sleep patterns on drivers of heavy trucks involved in single-vehicle accidents
and found that 62 of 107 accidents (58%) reported by drivers were deemed to be "fatigue-related“ [1]
The American Trucking Association (ATA) has estimated that the driver shortage will grow to 111,000 by 2014 [2]
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 9/88
www.PhysicalInternetInitiative.org
Products mostly sit idle, stored where unneeded, yet so often unavailable fast where needed
Unsustainability symptom 4
Manufacturers, distributors, retailers and users are all storing products, often in vast quantities
through their networks of warehouses and distribution centers, yet service levels and response times to local users
are constraining and unreliable
Reference: Wilson R.A. “Economic Impact of Logistics”, in Chap. 2 in Logistics Engineering Handbook, 2008
Stocks are increasingly maintained at a higher level in response to longer and sometimes unpredictable delivery times, as well as changes in distribution patterns.
In 2005, the average investment in all business inventories was $1.74 trillion,
which surpassed 2004’s record high by $101 billion.
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 10/88 www.PhysicalInternetInitiative.org
Production and storage facilities are poorly used Unsustainability symptom 5
Most businesses invest in storage and/or production facilities which are lowly used most of the times, or yet badly used,
dealing with products which would better be dealt elsewhere, forcing a lot of unnecessary travel
[1]: McIntyre K., “Delivering sustainability through supply chain management”, Chap.15 in Global Logistics New Directions in Supply Chain Management, (2007) [2]: Cooper J., Browne M. and Peters M., “European Logistics: Markets, management and strategy”, Blackwell, London (1991) Chopra & Meindl, “Facility Decisions and Distribution Network “, 2009_E4.5
The transport and storage of goods are at the centre of any logistics activity, and these are areas where a company should concentrate its efforts to reduce its environmental impacts [2]
When the production function is considered to be a part of the supply chain, there is obviously much that can be done to improve environmental and social performance at this stage [1]
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 11/88 www.PhysicalInternetInitiative.org
So many products are never sold, never used Unsustainability symptom 6
A significant portion of consumer products that are made never reach the right market on time, ending up unsold and unused
while there would have been required elsewhere
Rusting new cars in disused airfields
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 12/88 www.PhysicalInternetInitiative.org
Products do not reach those who need them the most Unsustainability symptom 7
This is specially true in less developed
countries and disaster-crisis zones
Countries most affected by high prices are those: which import large quantities of food, whose populations spend a large part of their income on food, where inflation is already
high, where there is already food insecurity and which have large urban populations.
References: “World Food Programme (WFP)”, http://www.wfp.org/node/7904
“Problems in developing logistics centres for ports in the Escap region”; Chap5, http://www.unescap.org/ttdw/Publications/TFS_pubs/pub_2194/pub_2194_ch5.pdf
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 13/88 www.PhysicalInternetInitiative.org
Products unnecessarily move, crisscrossing the world Unsustainability symptom 8
Products commonly travel thousands of miles-kilometers which could have been avoided
(1) by routing them smartly and/or
(2) making or assembling them much nearer to their point of use
Reference: “Virtual Warehousing”, Jeroen van den Berg Consulting, 2001
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 14/88 www.PhysicalInternetInitiative.org
Even though there are some great intermodal examples, in general synchronization is so poor, interfaces so badly designed, that intermodal routes are mostly time & cost inefficient and risky
Reference: Crainic, T.G. and Kim, K.H., “Intermodal Transportation, Chap8 in Handbooks in Operations Research and Management Science”, C. Barnhart and G. Laporte (Eds.), 2007
Fast & reliable intermodal transport is still a dream or a joke Unsustainability symptom 9
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 15/88 www.PhysicalInternetInitiative.org
Getting products in, through and out of cities is a nightmare
Unsustainability symptom 10
Most cities are not designed and equipped for easing freight transportation, handling and storage,
making the feeding of businesses and users in cities a nightmare
References: « Transport des marchandises en ville », www.transports-marchandises-en-ville.org “Problems in developing logistics centres for ports in the Escap region”, Chap5, http://www.unescap.org/ttdw/Publications/TFS_pubs/pub_2194/pub_2194_ch5.pdf
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 16/88 www.PhysicalInternetInitiative.org
Networks are neither secure nor robust Unsustainability symptom 11
There is extreme concentration of operations in a limited number of centralized production and distribution facilities, with travel along a narrow set of high-traffic routes
References: Chopra & Meindl, “Facility Decisions and Distribution Network” - 2009_E4.5 “Terrorism - Supply Chain Effects”, http://www.weforum.org/pdf/CSI/Terrorism.pdf “The New Supply Chain Challenge - Risk Management in a Global Economy”, FM Global, 2006 , http://www.fmglobal.com/assets/pdf/P0667.pdf Peck H., “Supply chain vulnerability, risk and resilience”, Chap.15 in Global Logistics New Directions in Supply Chain Management, (2007) “Managing Supply Chain Risk”, Video produced by CFO Research Services, http://www.fmglobal.com/VideoPlayer.aspx?url=/assets/videos/CFO_SupplyChain.wm “Security, Risk Perception and Cost-Benefit Analysis”, Joint Transport Research Centre OCDE Summary & Conclusions – Discussion Paper #2009-6, March 2008
This makes
the logistic networks
and supply chains
of so many businesses,
unsecure in face of robbery
and terrorism acts,
and not robust in face of
natural disasters
and demand crises
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 17/88 www.PhysicalInternetInitiative.org
Smart automation & technology are hard to justify Unsustainability symptom 12
Vehicles, handling systems
and operational facilities
have to deal with so many types
of materials, shapes and unit loads,
with each player independently
and locally deciding on his piece of the puzzle
This makes it very hard to justify smart connective technologies (e.g. RFID & GPS),
systemic handling and transport automation, as well as smart collaborative piloting software
References: Montreuil B., Facilities Location and Layout Design Chapter 9. in Logistics Engineering Handbook (2008) Hakimi D., Leclerc P-A., Montreuil B., Ruiz A., « Integrating RFID and Connective Technologies in Retail Stores », RFID in Operations and Supply Chain Management -
Research and Applications, Erich Schmidt Verlag, 148-171, 2007.Spada Sal,“Material Handling Control System Software Extends Supply Chain Visibility “nov.15, 2001 http://www.arcweb.com/ARCReports2001/Material%20Handling%20Control%20System%20Software%20Extends%20Supply%20Chain%20Visibility.pdf Sunderesh S. H., Material Handling System – Chapter-11 in Logistics Engineering Handbook (2008) McKinnon A., Road transport optimization – Chap. 17 in Global Logistics New Directions in Supply Chain Management - eBook (2007) Fifth Edition, Edited by Donald Waters Decker C. et al.“Cost-Benefit Model for Smart Items in the Supply Chain” (2008) Myerson J.M. “RFID in the Supply Chain - A Guide to Selection and Implementation” - IT Consultant Philadelphia, Pennsylvania USA - Auerbach Publications 2007
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 18/88 www.PhysicalInternetInitiative.org
Innovation is strangled Unsustainability symptom 13
Innovation is bottlenecked, notably by lack of generic standards and protocols,
transparency, modularity and systemic open infrastructure
This makes breakthrough innovation so tough, justifying a focus on marginal epsilon innovation
References: “RFID Tags: Advantages and Limitations”, http://www.tutorial-reports.com/wireless/rfid/walmart/tag-advantages.php “RFID hype is blurring limitations, study claims “, http://www.usingrfid.com/news/read.asp?lc=d59745mx97zf “RFID_Internet of Things in 2020 - Roadmap for the future”, Infso D.4Networked Enterprise & RFID Infso G.2Micro & Nanosystems, 2008
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 19/88 www.PhysicalInternetInitiative.org
Thirteen unsustainability symptoms Leading Us Toward Hitting the Wall Real Hard
1. We are shipping air and packaging
2. Empty travel is the norm rather than the exception
3. Truckers have become the modern cowboys
4. Products mostly sit idle, stored where unneeded, yet so often unavailable fast where needed
5. Production and storage facilities are poorly used
6. So many products are never sold, never used
7. Products do not reach those who need them the most
8. Products unnecessarily move, crisscrossing the world
9. Fast & reliable intermodal transport is still a dream or a joke
10. Getting products in and out of cities is a nightmare
11. Networks are neither secure nor robust
12. Smart automation & technology are hard to justify
13. Innovation is strangled
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 20/88 www.PhysicalInternetInitiative.org
Eco
no
mic
al
En
vir
on
me
nta
l
So
cie
tal
1 Weareshippingairandpackaging2 Emptytravelisthenormratherthantheexception3 Truckershavebecomethemoderncowboys
4Productsmostlysitidle,storedwhereunneeded,yetsooften
unavailablefastwhereneeded5 Productionandstoragefacilitiesarepoorlyused6 Somanyproductsareneversold,neverused7 Productsdonotreachthosewhoneedthemthemost8 Productsunnecessarilymove,crisscrossingtheworld9 Fast&reliableintermodaltransportisstilladreamorajoke
10 Gettingproductsinandoutofcitiesisanightmare11 Networksareneithersecurenorrobust12 Smartautomation&technologyarehardtojustify13 Innovationisstrangled
Unsustainabilitysymptoms
Mapping unsustainability symptoms to environmental, environmental and societal facets
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 21/88 www.PhysicalInternetInitiative.org
Readdressing the Goal
GOAL Enabling the global sustainability
of the transport, handling, storage, realization, supply and usage of physical objects across the world
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 22/88 www.PhysicalInternetInitiative.org
Expliciting the Overall Goal
References: Dablanc L., “Urban Goods Movement and Air Quality Policy and Regulation Issues in European Cities”, Journal of Environmental Law Advance Access, 2008 McIntyre K., “Delivering sustainability through supply chain management”, Chap.15 in Global Logistics New Directions in Supply Chain Management, 2007 Esty D. C. and Winston A.S. “Green to Gold “; 2006
Societal goal Increase the quality of life of both
the logistic, production and transportation workers and the overall population by making much more accessible
across the world the objects and functionality they value
Economic goal Unlock highly significant gains in global logistic, production,
transportation and business productivity
Environmental goal Reduce by an order of magnitude
global energy consumption, pollution and greenhouse gas emission associated with
logistic, production and transportation
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 23/88 www.PhysicalInternetInitiative.org
Restating the Overall Goal
Enabling the global sustainability of bringing to users from around the world the physical objects they need and value,
through a triple synergistic gain in terms of economy, environment and society
Reference: Sustainable Supply Chain Logistics Guide (SCL)- Business Tool (2009) http://www.metrovancouver.org/about/publications/Publications/sustainablesclguidefinal-june23.pdf
“We are not environmentalist.
We are not Scientists
But if we don’t do anything,
we will be out of business.” Unilever supply chain manager
the world’s largest purchasers of fish.
“In a prosperous society,
you really have tow assets:
people – their capacity and skills –
and the ecosystem around them.
Both need to be carefully tended.” Mats Lederhausen,
executive’s veteran at McDonald’s.
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 24/88 www.PhysicalInternetInitiative.org
The Inspiration for the Vision
June 2006: The Spark
• A great front page one-liner
• Interesting yet mainstream supply chain articles
• Nothing like what I perceived a Physical Internet should be
• I rapidly got passionate about the question What should or could be a full blown Physical Internet?
• What would be its key features?
• What capabilities would it offer that are not achievable today?
• Another question surfaced rapidly: Why would we need a Physical Internet?
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 25/88 www.PhysicalInternetInitiative.org
The Digital Internet Building Upon and Expanding Beyond the Information Highway Metaphor
When the digital world was looking for a way to conceptualize how it should transform itself,
it relied on a physically inspired metaphor: Building the information highway
References “BCNET's Optical Regional Advanced Network Upgrade Completed”, http://www.bc.net/news_events_publications/newsletters/Dec_2007/ROADM_Completion.htm “What the Telecom Industry May Look Like in 10 Years”, http://kennethmarzin.wordpress.com/2008/01/24/what-the-telecom-industry-may-look-like-in-10-years/
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 26/88 www.PhysicalInternetInitiative.org
Well, they have achieved their goal and went farther, reshaping completely the way
digital computing and communication are now performed
They have invented the Internet, leading the way to the World-Wide Web
They have enabled the building of an open distributed networked infrastructure
that is currently revolutionizing so many facets of our societal and economic reality
References: « Internet 2, le Web de demain », /http://www.futura-sciences.com/fr/doc/t/telecoms/d/Internet-2-le-web-de-demain_582/c3/221/p1 http://www.20minutes.fr/article/353755/Economie-Surendettement-Christine-Lagarde-ne-veut-pas-interdire-le-credit-revolving.php « rE-veille: réflexions sur l’aventure Internet », http://reveille.wordpress.com/
The Digital Internet Building Upon and Expanding Beyond the Information Highway Metaphor
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 27/88 www.PhysicalInternetInitiative.org
The Essence of the Digital Internet
The Digital Internet is about the interconnection between
networks in a way transparent for the user, so allowing the transmission of
formatted data packets in a standard way
permitting them to transit through heterogeneous equipment
respecting the TCP/IP protocol
References: Kurose J., Ross K. and Wesley A. “Computer Networking: A Top Down Approach Featuring the Internet”, 3rd edition., July 2004. Parziale L., Britt D.T., Davis C., Forrester J., Liu W., Matthews C. and Rosselot N. “TCP-IP Tutorial and Technical Overview”, 2006.
http://www.redbooks.ibm.com/redbooks/pdfs/gg243376.pdf “Interconnection of access networks, MANs and WANs “, http://images.google.ca/imgres?imgurl=http://www.exfo.com/
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 28/88 www.PhysicalInternetInitiative.org
Toward a Physical Internet Digital Internet as a Metaphor for the Physical World
Even though there are fundamental differences between the physical world and the digital world,
the Physical Internet initiative aims to exploit the Internet metaphor
so as to propose a vision for a sustainable and progressively deployable
breakthrough solution to global problems
associated with the way we move, handle, store, realize, supply and use
physical objects all around the world
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 29/88 www.PhysicalInternetInitiative.org
The Physical Internet
An open global logistics system leveraging interconnected supply networks
through a standard set of collaborative protocols, modular containers and smart
interfaces for increased efficiency and sustainability
Working definition for the Physical Internet,
jointly developed by Benoit Montreuil, Eric Ballot and Russ Meller,
version as of 2011-03-23
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 30/88 www.PhysicalInternetInitiative.org
Exposing 13 Key Features of the Physical Internet Vision
VISION
Evolving towards a worldwide Physical Internet
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 31/88 www.PhysicalInternetInitiative.org
Thirteen Key Features of the Physical Internet Vision
1. Encapsulate merchandises in world-standard modular containers
2. Aim toward universal interconnectivity
3. Evolve from material to container handling & storage systems
4. Exploit smart networked containers embedding smart objects
5. Evolve from point-to-point hub-and-spoke transport to distributed multi-segment intermodal transport
6. Embrace a unified multi-tier conceptual framework
7. Activate and exploit an open global supply web
8. Design products fitting containers with minimal space waste
9. Minimize physical moves and storages by digitally transmitting knowledge and materializing products as locally as possible
10. Deploy capability certifications and open performance monitoring
11. Prioritize webbed reliability and resilience of networks
12. Stimulate business model innovation
13. Enable open infrastructural innovation
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 32/88 www.PhysicalInternetInitiative.org
Digital Internet: From information to packets
The Digital Internet does not transmit information, it transmits packets embedding information
Information packets are designed for ease of use in Internet
The information within a packet is encapsulated and is not dealt with explicitly by Internet
The packet header contains all information required for identifying the packet and routing it correctly to destination
A packet is constructed for a specific transmission and it is dismantled once it has reached its destination
Image: http://www.softlist.net/program/sniff_-_o_-_matic-image.html
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 33/88 www.PhysicalInternetInitiative.org
The Digital Internet is based on a protocol structuring data packets independently from equipment
In this way, data packets can be processed by different systems and through various networks
• Modems, copper wires, fiber optic wires, routers, etc.
• Local area networks, wide area networks, etc.
• Intranet, Extranet, Internet, Virtual Private Network, etc.
Digital Internet: From information to packets
References: Kurose J., Ross K. and Wesley A. “Computer Networking: A Top Down Approach Featuring the Internet”, 3rd edition., July 2004.
Parziale L., Britt D.T., Davis C., Forrester J., Liu W., Matthews C. and Rosselot N. “TCP-IP Tutorial and Technical Overview”, 2006. http://www.redbooks.ibm.com/redbooks/pdfs/gg243376.pdf
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 34/88 www.PhysicalInternetInitiative.org
Physical Internet 1. Encapsulate merchandises in
world-standard smart green modular containers
-containers are key elements enabling the interoperability necessary for the adequate functioning of the Physical Internet
Merchandise is unitized as content of a -container and is not dealt with explicitly by the Physical Internet
From the cargo container sizes down to tiny sizes
Conceived to be easily flowed through various transport, handling and storage modes and means
Conceived to be easy to handle, store, transport, seal, snap, interlock, load, unload, construct, dismantle, panel, compose and decompose
Smart tag enabled, with sensors if necessary, to allow their proper identification, routing and maintaining
Environment friendly materials with minimal off-service footprint
Minimizing packaging materials requirements by enabling of the fixture-based protection and stabilization of their embedded products;
Various usage-adapted structural grades
Conditioning capabilities (e.g. temperature) as necessary
Sealable for security purposes
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 35/88 www.PhysicalInternetInitiative.org
-Containers: Modularized and standardized worldwide
in terms of dimensions, functions and fixtures
-containers
X
Y
Z Illustrative
modular
dimensions
0,12 m
0,24 m
0,36 m
0,48 m
0,6 m
1,2 m
2,4 m
3,6 m
4,8 m
6 m
12 m
B. Montreuil, B. Gilbert
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 36/88 www.PhysicalInternetInitiative.org
-Containers Easy to handle, store, transport, seal, snap, interlock, load,
unload, construct, dismantle, panel, compose and decompose
Decomposi
on
Composi
on
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 37/88 www.PhysicalInternetInitiative.org
Physical Internet 2. Aim toward universal interconnectivity
High-performance logistic centers, systems and movers exploiting world standard protocols,
making it fast, cheap, easy and reliable
to interconnect -containers through modes and routes,
with an overarching aim toward universal interconnectivity
References: Crainic, T.G. and Kim, K.H., Intermodal Transportation, Chapt. 8, Transportation, Handbooks in Operations Research and Management Science, C. Barnhart and G. Laporte (Eds.), North-Holland,, 467–537, 2007 Goetschalckx M. “Distribution System Design”. Chap. 13 in Logistics Engineering Handbook, 2008
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 38/88 www.PhysicalInternetInitiative.org
Digital Internet: Hubs and Routers
References: Zuckerman E. & McLaughlin A., “Introduction to Internet Architecture and Institutions” : August, 2003 Perlman R, “Interconnections - Bridges, Routers, Switches, and Internetworking Protocols”; (2nd Edition) 1999
Routing allows to insure Internet performance through a very efficient orientation of the packets towards the nodes of the network
Routing exploits the ease of storing & transmitting information
A router's job is extremely simple:
• It moves packets to the next machine in the right direction as quickly as possible.
Because all routers do is move packets, they are able to process millions of packets a minute
• Each router maintains a routing table, a set of rules that tell the router which next machine to forward packets to, based on the final destination of a packet
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 39/88 www.PhysicalInternetInitiative.org
The Physical Internet nodes are concurrently routing and accumulation sites within the networks, as well as gateways interfacing with the entities out of the Physical Internet
As currently conceived, the activities of sorting, storage and handling physical objects are brakes to interconnection
• Be it in train sorting yards or in crossdocking platforms
However there exist exceptions:
• Such as some of the recently implemented container ports
There is a need to generalize unloading, orientation, storage and loading operations, widely applying them to -containers in a smart automated and/or human-assisted way
The objective is to make load breaking almost negligible temporally and economically
• Intermodal less-than- truckload transport nearly at the same price, speed & reliability as single-mode full truckload
Physical Internet 2. Universal Interconnectivity
References: Crainic, T.G. and Kim, K.H., Intermodal Transportation, Chap. 8, Transportation, Handbooks in Operations Research and Management Science, C. Barnhart and G. Laporte (Eds.), North-Holland, 467–537, 2007
Chopra & Meindl, Facility Decisions and Distribution Network - 2009_E4.5
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 40/88 www.PhysicalInternetInitiative.org
Physical Internet 3. Evolve from material to -container
handling & storage systems
-container handling and storage systems,
with innovative technologies and processes exploiting the characteristics of -containers to enable their fast, cheap, easy and reliable
input, storage, composing, decomposing, monitoring, protection and output
through smart, sustainable and seamless automation and human handling
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 41/88 www.PhysicalInternetInitiative.org
Physical Internet 3. Evolve from material to -container
handling & storage systems
Reference: Montreuil, B., R.D. Meller, E. Ballot (2010) Towards a physical internet: the impact on logistics facilities and material handling systems design and innovation, International Material Handling Research Colloquium (IMHRC 2010), Milwaukee, États-Unis, 2010/06/21-24
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 42/88 www.PhysicalInternetInitiative.org
-container handling and storage systems:
• Enable fast and reliable input and output performance
• Have seamless interfacing with vehicles and systems moving products in and out, as well as client software systems for tracking and interfacing with the containers
• Monitor and protect the integrity of -containers
• Secure the containers to the desired level
• Provide an open live documentation of their specified performance and capabilities and of their demonstrated performance and capabilities, updated through ongoing operations
This applies in currently-labeled distribution centers, crossdocking centers, train stations, multimodal hubs, seaports, airports, and so on
Physical Internet 3. Evolve from material to -container
handling & storage systems
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 43/88 www.PhysicalInternetInitiative.org
Physical Internet 4. Exploit smart networked containers
embedding smart objects
Exploiting as best as possible
the capabilities of smart -containers
connected to the Digital Internet and the World Wide Web, and of their embedded smart objects,
for improving performance as perceived by the clients and overall performance of the Physical Internet
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 44/88 www.PhysicalInternetInitiative.org
Physical Internet and the Internet of Things
The Internet of Things is about enabling ubiquitous connection with physical objects equipped with smart connective technology, making the objects ever smarter and enabling distributed self-control of objects through networks
• It exploits technologies such as Internet, Web, RFID and GPS
The Physical Internet is to exploit as best as possible the Internet of Things to enable the ubiquitous connectivity
of its -containers and -systems
References: Johnson M. E., “Ubiquitous Communication: Tracking Technologies within the Supply Chain”, Chap.20 in Logistics Engineering Handbook, 2008
Scott D. M., “Electronic Connectivity and Soft ware” Chap.20 in Logistics Engineering Handbook, 2008
“Building a Smarter Container”, RFID Journal, http://www.rfidjournal.com/article/articleview/655/1/1/
Image: http://www.globetracker.biz/GlobeTracker/News.asp
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 45/88 www.PhysicalInternetInitiative.org
Physical Internet 5. Evolve from point-to-point hub-and-spoke transport
to distributed multi-segment intermodal transport
Distributed multi-segment travel
of -containers through the Physical Internet,
with distinct carriers and/or modes taking charge of inter-node segments,
with transit nodes enabling synchronized
transfer of -containers and/or carriers between segments,
and with web software platform enabling an open market
of transport requesters and transport providers
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 46/88 www.PhysicalInternetInitiative.org
In the Digital Internet, the packets that constitute an overall transmission, such as an e-mail, do not travel directly from source node A to destination node B
The packets travel through a series of routers and cables (copper or optical), dynamically moved from origin to destination in as best a way as possible provided the routing algorithms and the congestion through the networks
• An email from Québec to Lausanne may go through tens of routers across the world, from New York to Beijing
Packets forming a message are not restricted to travel together
• Each may end up traveling its distinct route
• The overall message is reconstituted upon packet arrival at final destination
References: Zuckerman E. & McLaughlin A., “Introduction to Internet Architecture and Institutions” : August, 2003 Kurose J., Ross K. and Wesley A. “Computer Networking: A Top Down Approach Featuring the Internet”, 3rd edition., July 2004.
Digital Internet Distributed multi-segment transmission
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 47/88 www.PhysicalInternetInitiative.org
Currently, if a trailer fully loaded with containers is requested to be transported from Québec to Los Angeles, there is high probability that:
• A driver and a truck will be assigned to the multi-day trip,
• The driver sleeping in his truck and driving to destination,
• Then moving to some as nearby as possible location to pick up a trailer returning toward as near as possible of Québec, to avoid empty travel
References: Powell W. B. “Real-Time Dispatching for Truckload Motor Carriers“, Chapter 15 in Logistics Engineering Handbook, 2008 McKinnon A., “Road transport optimization “,Chap. 17 in Global Logistics New Directions in Supply Chain Management - eBook (2007) Fifth Ed. Edited by Donald Waters
Physical Internet 5. Evolve from point-to-point hub-and-spoke transport to
distributed multi-segment intermodal transport
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 48/88 www.PhysicalInternetInitiative.org
A typical cowboy haul from Québec to Los Angeles
One-way Distance travelled : 5030 km Drivers: 1, Trucks: 1, Trailer: 1
One-way driving time: 48 hours Return driving time: 48 hours One-way trip time: 120 hours Return trip time: 120+ hours
Driving time for driver: 96 hours
Trip time for driver: 240+ hours
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 49/88 www.PhysicalInternetInitiative.org
In the Physical Internet, such a point-to-point experience would be exceptional. Most probably:
• A first driver and truck would be assigned to transport it to a transit point 3 to 6 hours away
• The trailer would be deposited to a slot in the transit point
• The first would then pick up another trailer required toward Québec
• Another driver and truck would rapidly afterward pick up the trailer and move it another segment forward, or yet the containers could be transferred to other trailers, trucks, trains, ships or planes as pertinent given the opportunities
• Repeating the process all the way to Los Angeles
• The shipper or its representative would have a priori arranged transportation on each segment and sojourn at each transit point, in his best interest in terms of price, timing and risk; or yet the routing decisions would be dynamic and/or distributed
Reference: “Warehousing And Cross-Docking”, http://www.3pd.com/Services/JobSiteWarehousing.aspx
Physical Internet 5. Evolve from point-to-point hub-and-spoke transport to
distributed multi-segment intermodal transport
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 50/88 www.PhysicalInternetInitiative.org
Multi-segment travel from Quebec to Los Angeles
Québec
Montréal Alexandria Bay, US border
Syracuse
Buffalo
Cleveland
Columbus
Indianapolis
St-Louis
Springfield
Tulsa
Oklahoma City
Amarillo
Albuquerque
Flagstaff
Needles
Barstow
Los Angeles
20
20-401
81
90
90
71
70
70
44
44
44
40
40
40
40
40
15-10
Distance travelled one-way: 5030 km 5030 km
Drivers: 1 17
Trucks: 1 17
Trailer: 1 1
One-way driving time (h): 48 51+
Return driving time (h): 48+ 51+
Total time at transit points (h): 0 9
Total trailer trip time from Quebec to LA (h): 120 60+
Total trailer trip time from LA to Quebec (h): 120+ 60+
Total trailer round trip time (h): 240+ 120+
Average driving time per driver (h): 96+ 6
Average trip time per driver (h): 240+ 6,5
Current Proposed
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 51/88 www.PhysicalInternetInitiative.org
-Transit sites
allowing distributed multi-segment transport
through the Physical Internet
:π-containers
:π-carrier
:π-vehicle
:π-bay
B1
B2
B3
B4
B5
B6
B7
B8
B9
B10
C1
C2
C3
C4
C5
C6
C7
C8
C9
V12
V8
V13
V6
Status of ! -carr iers currently in ! -transit"
! -carr ier ! -bay I ncoming deposit Outgoing pickup estimation
! -vehicle T ime ! -vehicle T ime (min, mode, max)
C1 B2 V1 04:35 V14 (06:04, 06:05, 06:15)
C2 B10 V3 05:15 V15 (06:05, 06:09, 06:12)
C3 B7 V4 05:20 V13 (06:04, 06:07, 06:10)
C4 B9 V6 05:35 V11 (06:02, 06:02, 06:02)
C5 B3 V8 05:45 V12 (06:01, 06:01, 06:01)
C6 B4 V9 05:48 V16 (06:10, 06:12, 06:18)
C7 B6 V11 05:55 V19 (06:15, 06:20, 06:30)
C8 B1 V12 05:58 V18 (06:10, 06:15, 06:20)
C9 B10 V13 06:00 V25 (06:20, 06:30, 06:45)
Reference: Montreuil, B., R.D. Meller, E. Ballot (2010) Towards a physical internet: the impact on logistics facilities and material handling systems design and innovation, International Material Handling Research Colloquium (IMHRC 2010), Milwaukee, États-Unis, 2010/06/21-24
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 52/88 www.PhysicalInternetInitiative.org
Water
Road
Road-Water -Hub
designed for enabling distributed multi-segment
intermodal transport of -containers through
the Physical Internet
Reference: Montreuil, B., R.D. Meller, E. Ballot (2010) Towards a physical internet: the impact on logistics facilities and material handling systems design and innovation, International Material Handling Research Colloquium (IMHRC 2010), Milwaukee, États-Unis, 2010/06/21-24
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 53/88 www.PhysicalInternetInitiative.org
Reference: B. Montreuil, E. Ballot, C. Montreuil et D. Hakimi (2010), OpenFret Project Report, InnoFret Program, France
Road-Rail Hub designed for enabling
multi-segment intermodal transport of -containers
through the Physical Internet
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 54/88 www.PhysicalInternetInitiative.org
Physical Internet
6. Embrace a unified multi-tier conceptual framework
Intra-Center Inter-Processor Network
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 55/88 www.PhysicalInternetInitiative.org
Intra-Facility Inter-Center Network
Physical Internet
6. Embrace a unified multi-tier conceptual framework
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 56/88 www.PhysicalInternetInitiative.org
Intra-Site Inter-Facility Network
Physical Internet
6. Embrace a unified multi-tier conceptual framework
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 57/88 www.PhysicalInternetInitiative.org
-transits & -hubs
Intra-City Inter-Site Network
Physical Internet
6. Embrace a unified multi-tier conceptual framework
Toward -enabled
sustainable
city logistics
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 58/88 www.PhysicalInternetInitiative.org
Québec, Canada
North eastern states, U.S.A.
Intra-State Inter-City Network
Physical Internet
6. Embrace a unified multi-tier conceptual framework
-transits & -hubs
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 59/88 www.PhysicalInternetInitiative.org
Physical Internet
6. Embrace a unified multi-tier conceptual framework
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 60/88 www.PhysicalInternetInitiative.org
Physical Internet 7. Activate and exploit an Open Global Supply Web
An open web of product realization centers, distribution centers, warehouses,
hubs and transit centers enabling producers, distributors and retailers
to dynamically deploy their -container-embedded products
in multiple geographically dispersed centers, producing, moving and storing them
for fast, efficient and reliable response delivery to distributed stochastic demand
for their products, services and/or solutions
References: Montreuil B., Labarthe, O., Hakimi, D., Larcher, A., & Audet, M. Supply Web Mapper. Proceedings of Industrial Engineering and Systems Management, Conference, IESM, , Conference Montréal, Canada, May 13-15, 2009 Hakimi D., B. Montreuil, O. Labarthe, “Supply Web: Concept and Technology”, 7th Annual International Symposium on Supply Chain Management, Conference Toronto, Canada, October 28-30, 2009Montreuil, B.,
Hakimi, D. , B. Montreuil, O. Labarthe, ”Supply Web Agent-Based Simulation Platform” Proceedings of the 3rd International Conference on Information Systems, Logistics and Supply Chain Creating value through green supply chains, ILS 2010 – Casablanca (Morocco), April 14-16<.
Enabling Physical Equivalents of
Intranets, Virtual Private Networks,
Cloud Computing and Cloud Storage
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 61/88 www.PhysicalInternetInitiative.org
As products and materials are moved and stored in modular secured containers, it allows:
• Warehouses and DCs to accept handling and storing containers from a wide variety of clients, embedding an indeterminate and non-pertinent number of distinct products, as long as they respect their throughput, security, conditioning and dimensioning capability specifications
• Significant improvement in capacity utilization and facility profitability
• Significant reduction in asset requirements and significant improvement in logistic costs and delivery service performance
Physical Internet 7. Activate and exploit an Open Global Supply Web
References: “Virtual warehousing”, Jeroen van den Berg Consulting , 2001 Chopra & Meindl, “Facility Decisions and Distribution Network “, 2009_E4.5
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 62/88 www.PhysicalInternetInitiative.org
Contrasting Independent Supply Networks, an Open Supply Web and a Global Open Supply Web in terms of number of distribution centers and of DC-to-client lead time
Open supply web
with a high density of open DCs
available to many other clients
Factories: 4
Firm dedicated DCs: 0
Group dedicated DCs: 0
Open DCs used: 60+
Mean lead time: 0
Max lead time: 0
Factories: 4
Firm dedicated DCs: 0
Group dedicated DCs: 3
Mean lead time: 1,48
Max lead time: 3
Factories: 4
Firm dedicated DCs: 0
Group dedicated DCs: 16
Mean lead time: 1,08
Max lead time: 3
Factories: 4
Firm dedicated DCs: 16
Mean lead time: 1,75
Max lead time: 3
Factory: 1
Firm dedicated DCs: 4
Mean lead time: 1,73
Max lead time: 3
Factory: 1
Firm dedicated DCs: 4
Mean lead time: 1,78
Max lead time: 3
Factory: 1
Firm dedicated DCs: 4
Mean lead time: 1,75
Max lead time: 3
Factory: 1
Firm dedicated DCs: 4
Mean lead time: 1,73
Max lead time: 3
Shared supply web
with independently
implemented DCs
Shared supply web
with jointly
implemented DCs
Independent
private
supply networks
* Lead times induced by transport from DC to client region
1
2
3
4
3
2
4
1
1
2
3
4
3
2
4
1
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 63/88 www.PhysicalInternetInitiative.org
From Private Supply Networks to Open Supply Webs
Reference: Montreuil and Sohrabi, From Private Supply Networks to Open Supply Webs, IERC 2010
The private supply networks of 5 companies
serving clients across Canada and the U.S.A.
under a one-day delivery service policy,
with 42 DC and 5 factories
Insuring one-day delivery by each company in its served markets
47 facilities 30 facilities
A shared supply networks among 5 companies
serving clients across Canada and the U.S.A.
under a one-day delivery service policy,
with 25 DC and 5 factories
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 64/88 www.PhysicalInternetInitiative.org
Physical Internet 8. Design products fitting containers
with minimal space waste
Products designed and engineered to minimize the load they generate on the Physical Internet, with dimensions adapted to standard container dimensions,
with maximal volumetric and functional density while containerized
Reference: Seliger G., “Sustainability in Manufacturing - Recovery of Resources in Product and Material Cycles” (Ed. by Günther Seliger, Sringer Verlag, 2007
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 65/88 www.PhysicalInternetInitiative.org
Product dimensions adapted to the standard container dimensions
• So that the packaged product fits in a small footprint container
In order to avoid moving and storing air, products should be designed and engineered so as to have maximal volumetric density while being in Physical Internet containers, extendable to their usage dimensions when necessary
Products should be designed so that only key components and modules have to travel extensively through the Physical Internet:
• Easy to be completed near point of use using locally available objects
Products having to move through the Physical Internet should be as functionally dense as possible when in the containers
• Functional density of an object can be expressed as the ratio of its useful functionality over the product of its weight and volume
Physical Internet 8. Design products fitting containers
with minimal space waste
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 66/88 www.PhysicalInternetInitiative.org
In general, it is much easier and much less expensive
to move and store digital objects composed of information bits
rather than physical objects composed of matter
References: Waters D., “Trends in the supply chain”, Chap. 1 in Global Logistics New Directions in Supply Chain Management , 2007) Fifth Ed., Ed. by Donald Waters Duncan R., “Internet traders can increase profitability by reshaping their supply chains” Chap. 19 in Global Logistics New Directions in Supply Chain Management , 2007 5th Ed. by D. Waters
Physical Internet 9. Minimize physical moves and storages
by digitally transmitting knowledge and materializing products as locally as possible
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 67/88 www.PhysicalInternetInitiative.org
Exploiting extensively the knowledge-based dematerialization of products
and their materialization in physical objects at point of use
As it will gain maturity,
the Physical Internet is expected to be connected to ever more open distributed flexible production centers capable of
locally realizing (make, assemble, finish) for clients a wide variety of products
from digitally transmitted specifications, local physical objects and, if needed,
critical physical objects brought in from faraway sources
Physical Internet 9. Minimize physical moves and storages
by digitally transmitting knowledge and materializing products as locally as possible
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 68/88 www.PhysicalInternetInitiative.org
Third-party production is to take an ever growing share of the overall production market,
internal production ever more limited to highly sensitive core objects
Product realization knowledge should be protected,
and authenticity of the materialized products should be legally acknowledged
Physical Internet 9. Minimize physical moves and storages
by digitally transmitting knowledge and materializing products as locally as possible
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 69/88 www.PhysicalInternetInitiative.org
Open supply web
with a high density of open DCs
available to many other clients
Firm dedicated factories: 4
Firm dedicated DCs: 0
Group shared DCs: 0
Open DCs used: 60+
D2C max: 0 mean: 0,00
F2D max: 12 mean: 4,75
Firm dedicated factories: 4
Firm dedicated DCs: 0
Group shared DCs: 3
D2C max: 3 mean: 1,48
F2D max: 10 mean: 4,39
Firm dedicated factories: 4
Firm dedicated DCs: 0
Group shared DCs: 16
D2C max: 3 mean: 1,08
F2D max: 9 mean: 4,36
Factories: 4
Firm dedicated DCs: 16
D2C max: 3 mean: 1,75
F2D max: 9 mean: 3,92
Factory: 1
Firm dedicated DCs: 4
D2C max: 3 mean: 1,73
F2D max: 8 mean: 4,11
Factory: 1
Firm dedicated DCs: 4
D2C max: 3 mean: 1,78
F2D max: 7 mean: 3,00
Factory: 1
Firm dedicated DCs: 4
D2C max: 3 mean: 1,75
F2D max: 7 mean: 3,69
Factory: 1
Firm dedicated DCs: 4
D2C max: 3 mean: 1,73
F2D max: 9 mean: 4,88
Shared supply web
with independently
implemented DCs
Shared supply web
with jointly
implemented DCs
Independent
private
supply networks
Inter-region transport induced lead times
F2D: Factory to DC lead time
D2C: DC to client region lead time
1
2
3
4
3
2
4
1
1
2
3
4
3
2
4
1
Contrasting Supply Networks, an Open Supply Web and a Global Open Supply Web in terms of factory-to-DC lead times with no shared or open production centers
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 70/88 www.PhysicalInternetInitiative.org
Open supply web
with a high density of open DCs
available to many other clients
and shared factories among the four firms
Firm dedicated factories: 0
Group shared factories: 4
Firm dedicated DCs: 0
Group shared DCs: 0
Open DCs used: 60+
Mean DC-to-region lead time: 0
Max DC-to-region lead time: 0
Mean factory-to-DC lead time: 2
Max factory-to-DC lead time: 4
Contrasting Supply Networks, an Open Supply Web and a Global Open Supply Web in terms of factory-to-DC lead times with shared or open production centers
Open supply web
with a high density of
open distribution and production centers
available to many other clients
Firm dedicated factories: 0
Group shared factories: 0
Open factories used: 64+
Firm dedicated DCs: 0
Group dedicated DCs: 0
Open DCs used: 64+
Mean DC-to-region lead time: 0
Max DC-to-region lead time: 0
Mean factory-to-DC lead time: 0
Max factory-to-DC lead time: 0 * Inter-region transport induced lead times
Firm dedicated factories: 0
Group shared factories: 4
Firm dedicated DCs: 0
Group shared DCs: 16
Mean DC-to-region lead time: 1,08
Max DC-to-region lead time: 3
Mean factory-to-DC lead time: 1,11
Max factory-to-DC lead time: 3
Shared supply web
with shared factories
and independently implemented shared DCs
Firm dedicated factories: 0
Group shared factories: 4
Firm dedicated DCs: 0
Group shared DCs: 3
Mean DC-to-region lead time: 1,48
Max DC-to-region lead time: 3
Mean factory-to-DC lead time: 0,83
Max factory-to-DC lead time: 3
Shared supply web
with shared factories
and jointly implemented shared DCs
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 71/88 www.PhysicalInternetInitiative.org
Physical Internet 10. Deploy capability certifications and
open performance monitoring
Multi-level Physical Internet capability certification of containers, handling systems, vehicles,
information systems ports, distribution centers, roads, cities and regions, protocols and processes,
and so on
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 72/88 www.PhysicalInternetInitiative.org
Physical Internet 10. Deploy capability certifications and
open performance monitoring
Live open monitoring of really achieved performance
of all -certified actors and entities,
focusing on key performance indices of critical facets such as speed, service level, reliability, safety and security
Such live performance tracking is openly available worldwide to enable fact-based decision making
and stimulate continuous improvement
Open information is to be provided while respecting confidentiality of specific transactions
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 73/88 www.PhysicalInternetInitiative.org
Physical Internet 11. Prioritize webbed reliability
and resilience of networks
The overall Physical Internet network of networks should warrant its own reliability
and that of its containers and shipments.
The webbing of the networks and the multiplication of nodes should allow the Physical Internet to insure its own
robustness and resilience to unforeseen events.
For example, if a node or a part of a network fails, the traffic of containers should be easily reroutable,
as automatically as possible
Reference: Peck H., “Supply chain vulnerability, risk and resilience”, Chap. 14 in Global Logistics New Directions in Supply Chain Management, 2007
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 74/88 www.PhysicalInternetInitiative.org
Physical Internet 11. Prioritize webbed reliability
and resilience of networks The Digital Internet is to transport information flows in a
reliable manner by its intrinsic nature, its protocols and its structure.
It not only transmits information from any one point to any other point within the network, it also insures its coherence and avoids its corruption by external elements, notably through its data encapsulation in packets.
The Physical Internet’s actors, movers, routes, nodes and flowing containers should interact in synergy to guarantee:
• The integrity of physical objects encapsulated in -containers
• The physical and informational integrity of -containers, -movers, -routes and -nodes
• The informational integrity of -actors (humans, software agents)
• The robustness of client-focused performance in delivering and storing -containers.
Ref.: Shi X. and Chan S., “Information systems and information technologies for supply chain management”, Chap. 11 in Global Logistics New Directions in Supply Chain Management, 2007
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 75/88 www.PhysicalInternetInitiative.org
Physical Internet 12. Stimulate business model innovation
Multiple actors with innovative business models commercializing novel offers
enabled by and adapted to the Physical Internet, with innovative revenue models for the various stakeholders
What are to be the -enabled equivalents of
Amazon, eBay and Google?
How are to evolve the manufacturers, distributers, retailers,
transporters and logistics providers
so as to best exploit the Physical Internet?
How are to evolve the material handling and transportation
solution and technology providers
so as to best thrive from the emerging Physical Internet?
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 76/88 www.PhysicalInternetInitiative.org
Remunerating the Players
In the Digital Internet, the transmission of information is remunerated mostly through bundled flat fees due to the quasi nil marginal costs
In the Physical Internet, the transmission of a container generates non negligible costs for each of the operators having taken charge of some part of the transmission
It is thus necessary to define business models for commercializing offers as well as operator revenue models
• There currently exist examples paving the way to realize this, notably in the airline industry
Reference: Crainic, T.G. and Kim, K.H., “Intermodal Transportation”, Chap. 8 in Transportation, Handbooks in Operations Research and Management Science, Barnhart C. and Laporte G.
(Eds.), North-Holland, Amsterdam, 467–537, 2007
Physical Internet 12. Stimulate business model innovation
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 77/88 www.PhysicalInternetInitiative.org
The Digital Internet has created a plethora of new businesses and business models, from service providers to platform builders and e-retailers
The advent of the Physical Internet will surely have the same impact, stimulating business model innovation:
• In the various logistic and transport industries, the technology and solutions providers, third-part operators, Physical Internet and Supply Web software services, and so on
• In the production, distribution and retailing industries, with business models exploiting the open supply web capabilities enabled by the Physical Internet
Physical Internet 12. Stimulate business model innovation
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 78/88 www.PhysicalInternetInitiative.org
Systemic coherence and means interoperability must enable the transparent usage of
heavy handling, storage and transport means currently existing or to come in the future,
that are currently so hard to use, currently reducing
their potential positive environmental impact
The Physical Internet homogeneity in terms of container modules encapsulating objects
should allow a much better utilization of means, thus increasing the capacity of infrastructures
by the exploitation of standardizations, rationalizations and automations
through currently unreachable innovations
Physical Internet 13. Enable Open Infrastructural Innovation
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 79/88 www.PhysicalInternetInitiative.org
Thirteen Key Features of the Physical Internet Vision
1. Encapsulate merchandises in world-standard modular containers
2. Aim toward universal interconnectivity
3. Evolve from material to container handling & storage systems
4. Exploit smart networked containers embedding smart objects
5. Evolve from point-to-point hub-and-spoke transport to distributed multi-segment intermodal transport
6. Embrace a unified multi-tier conceptual framework
7. Activate and exploit an open global supply web
8. Design products fitting containers with minimal space waste
9. Minimize physical moves and storages by digitally transmitting knowledge and materializing products as locally as possible
10. Deploy capability certifications and open performance monitoring
11. Prioritize webbed reliability and resilience of networks
12. Stimulate business model innovation
13. Enable open infrastructural innovation
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 80/88 www.PhysicalInternetInitiative.org
Physical Internet addressing unsustainability symptoms
1 2 3 4 5 6 7 8 9 10 11 12 13
Objectsencapsulatedinworld
stan
dardm
odularcontainers
Universalinterconnectivity
Containerhan
dlin
gan
dstorage
systems
Smartnetw
orkedcontainers
embed
dingsm
artobjects
Distributedm
ulti-segm
ent
interm
odaltransport
Unifiedm
ulti-tierconceptual
fram
ework
Openglobalsupplyweb
Productdesignforcontainerization
Productm
aterializationnearto
pointofuse
Openperform
ancem
onitoringan
d
capab
ilitycertification
Webbedreliabilityandresilienceof
netw
orks
Businessm
odelinnovation
Openinfrastructuralinnovation
1Weareshippingair
andpackaging
2
Emptytravelisthe
normratherthantheexception
3Truckershavebecome
themoderncowboys
4
Productsmostlysitidle,storedwhere
unneeded,yetsooftenunavailablefastwhere
needed
5Productionandstoragefacilitiesarepoorly
used
6Somanyproductsareneversold,neverused
7
Productsdonotreach
thosewhoneedthem
themost
8
Productsunnecessarily
move,crisscrossingthe
world
9
Fast&reliable
intermodaltransportis
stilladreamorajoke
10
Gettingproductsinand
outofcitiesisa
nightmare
11Networksareneithersecurenorrobust
12Smartautomation&technologyarehardtojustify
13 Innovationisstrangled
PhysicalInternetCharacteristics
Unsustainabilitysymptoms
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 81/88 www.PhysicalInternetInitiative.org
Positioning the Physical Internet
World Wide Web (WWW)
Digital Internet Digital information Packets
Open Supply Web
Physical Internet Smart Physical Packets
Connecting Physical objects through WWW
Internet of Things Smart Networked Objects
Smart Grid
Energy Internet
Energy Packets
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 82/88 www.PhysicalInternetInitiative.org
Realizing the Vision
VISION
Evolving towards a worldwide Physical Internet
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 83/88 www.PhysicalInternetInitiative.org
The Physical Internet: Global systemic sustainable vision
stimulating and aligning action around the world
Individual initiatives by businesses, industries and governments are necessary but are not sufficient
There is a need for a macroscopic, holistic, systemic vision offering
a unifying, challenging and stimulating framework
There is a need for an interlaced set of global and local initiatives
towards this vision, building on the shoulders of current assets and projects,
to help evolve from the current globally unsustainable state to a desired globally sustainable state
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 84/88 www.PhysicalInternetInitiative.org
Physical Internet Implementation Progressive Deployment, Cohabitation and Certification
The widespread development and deployment
of the Physical Internet
will not be achieved overnight in a Big-Bang logic
but rather in an ongoing logic
of cohabitation and of progressive deployment,
propelled by the actors
integrating gradually the Physical Internet ways
and finding ever more value in its usage and exploitation
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 85/88 www.PhysicalInternetInitiative.org
Physical Internet Implementation Progressive Deployment, Cohabitation and Certification
A smooth transition
starting with rethinking and retrofitting phases,
then moving toward more transformative phases
The Physical Internet can constitute itself progressively
through the multi-level certification of:
• Protocols
• Containers
• Handling and storage technologies, distribution centers,
production centers, train stations, ports, multimodal hubs
• Information systems (e.g. reservation, smart labels, portals)
• Urban zones and regions, inter-country borders
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 86/88 www.PhysicalInternetInitiative.org
Conclusion(1/2)
This manifesto has outlined a bold paradigm breaking vision for the future of
how we handle, store, transport, realize, supply and use physical objects across the world
It proposes to exploit the Internet, which has revolutionized the digital world,
as an underlying metaphor for steering innovation in the physical sphere
The outlined Physical Internet does not aim to copy the Digital Internet, but to inspire the creation of
a bold systemic wide encompassing vision capable of providing real sustainable solutions
to the problems created by our past and current ways and by our vision toward which we should aim
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 87/88 www.PhysicalInternetInitiative.org
With this manifesto and its underlying research, a small step has been made
A lot more are needed to really shape this vision
and, much more important, to give it flesh through real initiatives and projects
so as to really influence in a positive way our collective future
This requires a lot of collaboration between academia, industry and governments
across localities, countries and continents
Your help is welcome
Conclusion(2/2)
Physical Internet Manifesto
Benoit Montreuil Version 1.8, 2011-03-28, p. 88/88 www.PhysicalInternetInitiative.org
Questions and comments are welcome
Questions et commentaires sont les bienvenus
Fragen und Kommentare sind willkommen
Las preguntas y los comentarios son bienvenidos