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"PHYSICAL INTERNET" A SOLUTION TO LOGISTICS CHALLENGES
Evolving towards a ‘Physical Internet’ would help solve the global logistics sustainability challenge.
Benoit Montreuil, Coca-Cola Material Handling
& Distribution Chair and Professor
This is what Benoit Montreuil told delegates to the ACPA Annual Conference during a panel session entitled Forces Driving Tomorrow’s Logistics Landscape.
Dr. Montreuil leads the Georgia Institute of Technology’s initiatives to develop the cutting-edge knowledge required to design and operate this globally emerging Physical Internet. He is Coca-Cola Chair in Material Handling and Distribution and Director of the Physical Internet Centre at the H. Milton Stewart School of Industrial and Systems Engineering at Georgia Tech.
“There is an overall grand challenge all around the world to try to find a way to improve by an order of magnitude the economical, environmental and social performance in terms of efficiency and sustainability of the way we move, deploy, realize, supply, design and use physical objects,” Dr. Montreuil said.
Using the digital Internet as a metaphor for the physical world, the Physical Internet would move goods the way its namesake moves data. “It is a hyper-connected global logistics system enabling seamless open asset sharing and flow consolidation,” Dr. Montreuil said. A system is said to be hyper-connected when its components are intensely connected on multiple layers, ultimately anytime, anywhere. Interconnectivity layers notably include digital, physical, operational, business, legal and interpersonal layers.
Under the Physical Internet vision, there would be an open market for goods transportation, storage, realization, supply and usage. Merchandise would be encapsulated in ‘black box’ world-standard, smart, green modular containers for transport, handling and packaging purposes. There would be a new generation of handling, transportation and storage technologies and facilities for seamless, fast flow and exchange of loads, and standard protocols and interfaces for seamless open asset sharing and consolidation across interconnected networks and modes. Service provider certification and ratings by users would drive performance, and there would be continuous and rigorous tracking and monitoring. All of this would lead to smart, fact-based, proactive, distributed routing, deployment and production decisions.
Simulation experiment in France
Taking hyper-connected transportation as an example, Dr. Montreuil discussed the results of a simulation experiment with top supermarket retailers Carrefour and Casino in France and their 100 leading suppliers. The study showed that using multimodal relay-mode transportation through a web of open hubs, using multiple players, would result in up to 32 percent in overall cost savings and about a 60 percent reduction of greenhouse gas emissions.
On the topic of hyper-connected distribution, Dr. Montreuil said there are 535,000 warehouses and distribution centres in the U.S. alone. Most companies often use a single distribution centre and generally less than 20.
“The idea is to exploit these distribution centres as much as possible,” Dr. Montreuil said. Hyper-connected distribution would enable each company to dynamically deploy its products through an open worldwide distribution web … including 535,000 open distribution centres in the U.S.!
Dr. Montreuil said there will be more and more hyper-connecting of cities and port logistics in the future. Containers have to be moved seamlessly in and out of ports and across cities, multimodal capabilities need to be exploited, and synergies need to be built between city logistics and port centric logistics, he said.