# Papers

## A case study derived methodology to create a roadmap to realize the Physical Internet for SME

#### Florian Ehrentraut, Christian Landschuetzer, Dirk Jodin, Andreas Gasperlmair and Hans-Christian Graf

Abstract

In this paper the conference themes are addressed by presenting a methodology to create a roadmap towards a future Physical Internet (PI) realization in the scope of small and mediums sized enterprises. The described methodology is derived from a real case study conducted by the Austrian research project “Go2PI”. Before focusing on the content of the paper in detail a short thematic outline of the project Go2PI is introduced.

Thematic Outline of Go2PI
Based on the case study of the Austrian SME company “Aspöck Systems GmbH”, criteria and guidelines regarding aspects of technical and information systems as well as processes are evolved in order to develop a neutral and open business model in the area of distribution logistics. Thereby, the use of future loading and transport devices of the “Physical Internet” (PI) in combinations with future PI-ICT are postulated and further a roadmap to the PI-services is designed. The project Go2PI investigates in detail possible impacts, changes, prospects and risks in a future distribution logistics according to the PI-vision in order to optimize the volume and weight usage and the common usage of resources. The approach focuses on four different levels: the information level, the physical level, the process level and the business model level.

Description of Content
Taking into account the specific characteristics of the Austrian distribution logistics and the demands of a SME in the production industry a methodology to create a roadmap towards a future Physical Internet realization is developed based the Go2PI project. Derived from a case study this methodology covers criteria and guidelines regarding aspects of information systems, internal and external processes, processes to develop a neutral and open business model as well as the physical assets like PI-container or PI-handling technology in the area of distribution logistics. The different steps of the methodology which are recommended to obtain a roadmap towards a future PI realization and which can be applied to similar cases in different industry branches and therefore pave the way for a realization of the PI are:

1. Analyzation of the current situation of a SME: key features and key areas to cover in the analyzation
2. The approach to develop the future scenario: application of the storybook approach and evaluation in order to derive requirements
3. Deriving gaps and outline potential of the different measures to realize the PI: assessment criteria and implementation paths based on the PI-vision

In addition to the developed methodology the paper describes the developed use case and the future scenario for a SME in the Go2PI project, substantial barrier on the 4 different levels to implement the PI and outlines identified gaps and future areas. The results of the Go2PI project which are based on the developed methods will be presented in a parallel paper.

Keywords:

Physical Internet, Go2PI, Realization of the Physical Internet, Realization Methodology, Physical Internet for SME

Related Session:
Workshop WP2: Toward a Physical Internet: An Austrian Experiment
Wednesday, June 29, 3:20pm - 4:20pm

## A Platform to Support Collaboration and Agility in Logistics Web

#### Raphaël Oger, Frédérick Benaben and Matthieu Lauras

Abstract

The Physical Internet (PI) has been introduced recently to solve the Global Logistics Sustainability Grand Challenge (Montreuil, 2011). Montreuil et al. (2012) affirm that introducing a new infrastructure such as the PI generates an intense wave of innovative change in business models. This is notably due to the very high level of collaboration that PI implies. Actually, PI consists in a Global Logistics Web (Montreuil et al., 2012) that interconnects all the logistics services through the encapsulation of the goods in smart modular containers (PI-containers) and the use of open logistics facilities (PI-hubs) (Ballot et al., 2012).

Such Logistics Web goes beyond the development of usual Supply Chain networks known in the literature. But to reach this goal, PI should enhance the strategic role of communications and information technologies all along the Supply Chain (Montreuil et al., 2012). As described by (Sallez et al., 2016), PI-containers and PI-hubs must be active to perform adequately in the Logistics Web. This activeness consists in continuously (i) transmitting data that will be (ii) interpreted in order to (iii) support dynamically decisions. In our research work, we suggest to make a parallel between those PI objectives and the current literature on Internet of Everything. Basically, Internet of Things can support the data transmission issue, while Internet of Knowledge and Internet of Services can support the data interpretation and the decision-support issues respectively.

This idea has been made concrete through the MISE (Mediation Information System Engineering) project. This project is dedicated to provide a support framework for collaborative situation by deploying agile mediation information among partners. Obviously, due to its strong collaborative nature, the Logistics Web is a preferred field of application for MISE, even if other application domains have been also developed (e.g. Crisis Management or Healthcare Management). The general principle of the MISE approach is structured according to three steps:

1. Design of collaboration model: this level concerns the gathering of knowledge about the considered collaborative situation in order to instantiate concepts of the so-called collaborative meta-model (concerning mainly environment of the collaboration, objectives of the collaboration, partners and services of the collaboration).
2. Deduction of collaborative behavior model: the second step deals with the automated deduction of collaborative processes, based on the knowledge collected at the previous level. Schematically, the aim is to select and organize partners’ services according to objectives and environment of the collaboration.
3. Deployment of the appropriate Mediation Information System (MIS): the previously deduced business behavior (processes) is translated in a technical behavior (workflows) in order to be implemented. The goal is mainly to match services with activities and data with information.

Furthermore, these three steps are used in an agile framework, which deal with detection of evolution and adaptation of behavior. Performing agility of MIS is based on event analysis (according to the received event, is the situation in line with what is expected) and on behavior adaptation (by invoking step 1, step 2 or step 3 depending on the nature of the event analysis). On a technical point of view, MISE project is based on a Service Oriented Architecture (SOA) paradigm and MISE tools are deployed as web-services on an Enterprise Service Bus (ESB).

In this paper, we illustrate concretely the way MISE might be used thanks to a Logistics Web application dedicated to the agile drug deliveries to French drugstores. Practically, a delivery area is watched through an EDA platform, in order to gather all events (from sensors, services, people, devices, and in a very near future PI-containers) in order to build and maintain a global picture of that area. According to some unexpected (or expected) negative changes (such as an unexpected emergency order, a lot of GPS data showing that a lot of vehicles are stopped, some abnormal values of temperature sensors, etc.), the MISE platform could start the behavior deduction based on (i) information concerning the situation (risk, facts, etc.) and (ii) information concerning delivery means (resources, lead-times, etc.) both extracted from the global picture. Thanks to the implementation step a MIS may be deployed among the stakeholders (drugstores, transportation provider, wholesalers, manufacturers…). Agility of this MIS could be performed thanks to models based on the global picture. Practically, we develop a specific and realistic drugstores’ delivery scenario that shows how the MISE system could provide tooling environment to support parts of the PI and Logistics Web concepts.

As a conclusion, the MISE platform provides an environment, which allows Logistics Web users to be “hyperconnected” (through topic and content based subscriptions) in order to detect in real-time unexpected events and adapt their behaviours accordingly. One very interesting aspect of that system is the fact that users are not supposed to know each other or even to select the ones they want to get the events from.

References

• Ballot, E., Gobet, O., & Montreuil, B. (2012). Physical internet enabled open hub network design for distributed networked operations. In Service Orientation in Holonic and Multi-Agent Manufacturing Control (pp. 279-292). Springer Berlin Heidelberg.
• Montreuil, B. (2011). Toward a Physical Internet: meeting the global logistics sustainability grand challenge. Logistics Research, 3(2-3), 71-87.
• Montreuil, B., Rougès, J. F., Cimon, Y., & Poulin, D. (2012). The physical internet and business model innovation. Technology Innovation Management Review, 2(6).
• Sallez, Y., Pan, S., Montreuil, B., Berger, T., & Ballot, E. (2016). On the activeness of intelligent Physical Internet containers. Computers in Industry.

Keywords:

Logistics Web, Mediation Information System, Agile System, Collaborative System, Internet of Everything

Related Session:
Workshop TA3: Digital Platform Enabling Hyperconnected Logistics
Thursday, June 30, 8:00am - 9:00am

## A simulation model to migrate from cross docks to PI Hubs

#### Tarik Chargui, Mohamed Reghioui, Abdelghani Bekrar and Damien Trentesaux

Abstract

Global supply chain optimization to achieve better efficiency in respect of environmental constraints recently motivated several research works on the idea of the physical internet as a worldwide open logistics system intending to bring new models that make the current logistical systems more flexible and sustainable. The developed concept aims to profoundly change the way objects are handled, stored or moved, taking inspiration from the digital internet. Physical Internet reproduces many concepts from the digital Internet, which are based on packet data transmitting in the TCP-IP protocol using routing protocols.

The objective of this study is to evaluate the contribution of physical internet on reducing logistics costs and improving the quality of service in PI-cross docks. Given the significant difference between the digital and physical systems, such a study is necessary to evaluate the efficiency of investments linked to the implementation of physical Internet.

Two simulation models are proposed to compare performances of a classical cross dock and a PI-cross dock under the same flow.

The first model is for the simulation of a real and classic cross dock with an incoming flow of three different types of household appliances products (type 1, 2 and 3) coming from different suppliers. The model considers three incoming docks, three outgoing docks and a warehouse separated into three areas (one area for each type of product). The cross dock uses 9 forklifts for unloading, loading and storage. Each one of the three incoming docks handles one type of products and each one of the incoming trucks comes with one type of products. For example, an incoming truck carrying product type 1 will be unloaded in dock 1. When a truck arrives in an incoming dock, products are unloaded in the reception area of the dock using the available forklifts, and each one of the incoming docks has one reception area. In the other side of the cross dock facility, there are three outgoing docks. Trucks arrive with their orders related to one or several products. In order to respect the FIFO rule, forklifts pick up products from the warehouses first. But if the quantity in the warehouse is not sufficient, the requested quantity will be picked up directly from the reception areas, if there is a truck unloading the requested product.

The second model is for the simulation of the automated cross dock (PI-cross dock), keeping the same flow of incoming and outgoing trucks and the same level for receptions and orders. The characteristics of the cross dock facility are also the same as for the first model (the surface and the number of incoming and outgoing docks). However, instead of using forklifts, automated loading and unloading resources (PI-docks) connected to a sorting area (PI-sorters) using PI-conveyors are considered. In the PI-cross dock, manual forklifts for storing and retrieving products in the temporary warehouse are replaced by an automated storage and retrieval system (AS/RS) that is connected directly to the sorting area with three storage and retrieval machines, one machine for each kind of product. When a truck arrives to an incoming dock, the PI-dock unloads automatically the products which will be moved to the PI-sorters using PI-conveyors. Trucks’ orders are served using the available products in the warehouse. The required products are picked up using the AS/RS system and then they come through the sorting area (PI-sorters) and to the PI-dock through PI-conveyors. However, if the requested quantity is not sufficient to serve the truck and if there is a truck being unloaded in the incoming PI-dock then the products arrive directly from that PI-dock.

The objective of this simulation is to compare and evaluate the KPIs (Key Performance Indicators) of each one of those cross docks such as the total time spent by a product in the cross-dock, the waiting time of incoming and outgoing trucks, and the usage of resources under the same flow of incoming products and orders, keeping the same surfaces for the two cross docks.

After running the two simulation models under the same flow, the average total time (cycle time) spent by the three products in the cross dock is reduced by 31%. The waiting time in the docks is reduced by 90% and the resources usage is reduced by 87%. Further research is ongoing on more complicated configurations related to the system of an industrial partner. However, from those initial results; it is very clear that if the arrival and the departure of trucks are well synchronized, PI-cross docks can greatly improve actual quality of service and resources occupation.

Keywords:

Physical internet (PI), PI-System, PI-Cross-dock, PI-Container, PI-Conveyor, PI-Dock, PI-Sorter

Related Session:
Workshop WP6: Hyperconnected Transportation Hub Design and Operation
Wednesday, June 29, 4:25pm - 5:25pm

## A Two-Sided, High-Density Rail-Rail Hub

#### Gang Hao and Kevin Gue

Abstract

We describe a control scheme for a two-sided, grid-based Rail-Rail Physical Internet hub. The system features decentralized control, and is able to induct and discharge multiple PI-containers at the same time. It also sorts and sequences containers, such that inducted containers are placed in the right slot, in the rail car, at the right time.

Keywords:

Physical Internet, GridStore, GridHub, grid-based, high density storage system, Rail-Rail hub

Related Session:
Workshop WP6: Hyperconnected Transportation Hub Design and Operation
Wednesday, June 29, 4:25pm - 5:25pm

## Antecedents of the Physical Internet: A Cross-Country Analysis of Transportation Volume Change

#### Namchul Shin and Horst Treiblmaier

Abstract

The Physical Internet is defined as “a global logistics system based on the interconnection of logistics networks by a standardized set of collaboration protocols, modular containers and smart interfaces for increased efficiency and sustainability”. As the recent development of the Physical Internet contributes to a more efficient usage of transportation and logistics technologies, the question arises whether these technologies may have a varying impact on countries’ economic performance. Thus, it is crucial to understand the drivers of transportation volume in the first place. This research conducts a country-level analysis of the determinants of growth of transportation volume by employing data collected for 28 European countries for the 10 year period of 2004-2013 from two data sources: (1) Eurostat and (2) World Bank. We especially focus on two modes of transportation technologies: water transport and road transport. By highlighting the close relationship between country-specific factors and the growth of transport volume, we extend the general framework of the Physical Internet by explicitly taking factors into account which in most cases cannot be directly influenced by logistics decision makers. This research therefore integrates a macroeconomic perspective into the overall Physical Internet framework.

Keywords:

Physical Internet, Technology Diffusion, Transportation Technologies, Growth of Transportation

Related Session:
Workshop WA1: Social Acceptability and Sustainability of the Physical Internet
Wednesday, June 29, 11:20am - 12:20pm

## Evaluating five typologies on costs and requirements for hyperconnected logistics networks

#### Wout Hofman

Abstract

Today, individuals are used being connected with the Internet everywhere at any time, collaborate with each other, share experiences, and use eCommerce facilities. They are said to be hyperconnected. Whereas individuals have a human-machine interface with a platform storing their data, organizations will have their own heterogeneous IT systems. These IT systems will have communication capabilities like Internet protocols, but they require additional functionality to share data. Data is shared with a syntax and is information via agreed semantics. Organizational behavior should be standardized linked to business processes creating value. This paper identifies five typologies for implementing hyperconnectivity and evaluates these typologies based on indicative figures of implementation costs and efforts for individual actors and policy makers.oday, individuals are used being connected with the Internet everywhere at any time, collaborate with each other, share experiences, and use eCommerce facilities. They are said to be hyperconnected. Whereas individuals have a human-machine interface with a platform storing their data, organizations will have their own heterogeneous IT systems. These IT systems will have communication capabilities like Internet protocols, but they require additional functionality to share data. Data is shared with a syntax and is information via agreed semantics. Organizational behavior should be standardized linked to business processes creating value. This paper identifies five typologies for implementing hyperconnectivity and evaluates these typologies based on indicative figures of implementation costs and efforts for individual actors and policy makers.

Keywords:

hyperconnected, logistics services, data policies, Internet of Things

Related Session:
Workshop TA2: Open Logistics Interconnection Model & Protocols
Thursday, June 30, 8:00am - 9:00am

## F2A Physical Internet Architecture for Fresh Food Distribution Networks

#### Amitangshu Pal and Krishna Kant

Abstract

Today's distribution and transport logistics suffer from significant inefficiency  factors mainly due to lack of resource and infrastructure sharing. According to some recent studies, the current transportation efficiency is in the neighborhood of 10%.  In the traditional commodity supply chain delivering fresh food, trucks often go either empty (to return the truck and/or driver to their home location) or partially empty (due to unavailability of suitable product or perishability concerns of the carried food). This leads to largely avoidable distribution costs, transportation carbon footprint, road congestion, delivery delays, etc. Yet, a significant percentage of fresh food is wasted due to real or perceived spoilage or loss of quality of fresh food from farm to the end customer. This paper exploits the ongoing technological developments to devise a mechanism for distributing perishable food packages while at the same time minimizing the empty miles to improve the fuel-efficiency.

One major obstruction to improving efficiency and decreasing food waste is the lack of universal sharing of logistics, particularly among the large vendors. However, the improving technology and the pressures to reduce cost are resulting to rapid growth of 3rd party logistics (3PL) and its derivatives such as 4PL which already account for more than 54% of the distribution logistics. 3PL involves outsourced logistics services using shared resources (warehouses, trucks, drivers, loading/unloading equipment etc.) and can achieve significant savings. Another key obstructions of logistics is the need to find drivers, ensure that they do not drive for more than the safe period, and get them home most nights.

In this paper, we introduced the notion of a worker-friendly, "fresh food physical Internet (FFPI or F$^2\pi$)" architecture and explored the mixing, packaging and delivery of food packages in different parts of the food pipeline. With food sourced from every part of the country and from around the world, food supply chains are extremely complex pathways from farm to the table. Health concerns have prompted a rapid rise in the demand and consumption of fresh fruits and vegetables, with consequent emphasis on cost effective supply of freshest food to the consumer. The sustainability concerns and local food movement have further emphasized the issues of freshness, quality, intelligent sourcing, and most cost effective transportation of perishable food items. The distribution process of perishable food commodities follow extremely complex pathways from their origins to the consumption points, due to their constant deterioration with time, which makes the modeling and improvement of such logistics extremely difficult.

In a similar note, physical Internet has been studied recently that attempts to revolutionize product distribution logistics by emulating the Internet. The key issues in making the distribution logistics more efficient, flexible, cheaper, and more user friendly include (a) standardization of identification, labeling, packaging, transportation, tracking, etc, (b) sharing of physical distribution infrastructure among multiple companies, and (c) worker friendly logistics (e.g., enabling truck drivers to return home for the night). While the architecture of physical Internet introduces a number of key characteristics, the requirements of food freshness remained untouched. The key characteristic of F$^2\pi$ is the constant deterioration in quality of a food packages based on the delay in the distribution pipeline and handling factors such as temperature, humidity, vibrations, etc. In this paper our key objective is to extend this physical Internet model to address the distribution challenges of "food logistics". We first develop a "freshness" metric of different food products as a function of flow time through the logistics system.  The deterioration as a function of time $t$ can be described by a non-decreasing function that we henceforth denote as $\zeta(t)$. In general, $\zeta(t)$ is linear for fruits or vegetables and exponential for fish/meat. The decay itself is a complex phenomenon and could refer to many aspects, including those that can be directly detected by the customers (e.g., color, texture, firmness, taste, etc.) and those that are latent but perhaps even more important, such as degradation of vitamin content or growth of bacteria. Furthermore, the decay rate is strongly influenced by the environmental parameters such as temperature, humidity, vibration etc.

We also explore the idea of shared logistics to "reduce trucker's time away from home", by dividing the long journey of a truck drivers among multiple drivers. The idea is to divide the entire operational area into multiple zones driven by the locations of distribution centers, and limit a truck run to within a zone only. The inter-zone delivery requires multiple trucks run with each driver returning back to its source after passing on the contents to the next truck across the zone boundary. Ideally, the returning truck will also carry compatible products in the other direction. This requires rather close cooperation and interactions among the agents in the food pipeline, that are used to work in isolation. The continuous perishability of the food products further complicates the matter. We believe that the proposed F$^2\pi$ architecture will complement the existing efforts of emulating the digital Internet into the traditional logistics networks. Even if we address this in the context of fresh food logistics, our methodology is generic enough to be adapted to other logistics systems as well.

Keywords:

Fresh food distribution networks, Physical Internet, Logistics sustainability, Infrastructure sharing, Transportation, , Worker-friendly logistics

Related Session:
Workshop WP5: Hyperconnecting Fresh Supply Chains
Wednesday, June 29, 4:25pm - 5:25pm

## Go2PI – Practically proved steps to implement the Physical Internet

#### Andreas Gasperlmair, Hans-Christian Graf, Sophie-Therese Hörtenhuber, Florian Ehrentraut and Christian Landschützer

Abstract

Current logistics research recommends the visions and concepts of "Physical Internet" (PI) to avoid waste of resources in sustainable supply chains. Based on cross-company collaborations and cooperation new principles of resource sharing shall be introduced. Therefore, higher-level coordination instances and new business standards are needed to increase the overall efficiency and to gain resulting reduction of traffic while increasing service levels.

In Austria, for example, regional material flows are quite well connected by the existing transport industry; however, because of the fragmented nature of individual deliveries, which are generated by a big amount of different medium-sized companies, and the special geographical and topological effects deliveries are poorly bundled. On the one hand innovations of the smart production initiative connect dislocated production sights to regional production clusters thus enabling high-quality planning and production control, but on the other hand optimized interfaces to connect enterprises via logistics and the integration to integral value networks with variable capacities are widely missing. Based on the practical case of an Austrian manufacturer in the automotive sector the scientific objective of the considered research project “Go2PI” was to evolve criteria and guidelines regarding aspects of technical infrastructure, information systems and operational processes to develop a provider neutral and open business model for the area of distribution logistics. These guidelines can be summarized and generalized to three main implementation steps, which become part of the developed roadmap to the Physical Internet:

Setting the vision for coopetition
On the basis of the PI-visions the initial step focuses on the definition of a fair benefit sharing model for the cooperation of competing forwarding service providers concerning assets and business information. Especially part loads and single unit loads - as mainly dealt with in the project Go2PI - include a large proportion of inefficient use of transport capacity because of the nature of their structure, volumes, volatility and the differences regarding weights, dimensions, dates and destinations. Even logistics systems focused on this part of logistics, like breakbulk agents, suffer from a lack in fill rates, empty runs and cost pressures in both modalities road and rail.
In the regard of the structure of the consignments there is high potential concerning a sharing model which helps as a superior authority to capture shipment and capacities and bundle these quantities in an open company-crossed system. Toward that there is the market where direct contact and relationships between senders and freight forwarding agencies prevalent which lead to longlasting customer loyalty. Therefore, some service providers developed to specialists in different industries and destinations with customized services and pricing models, which enable the highest service level as well as an easy operative processing for them. This rigid understanding of customer-forwarder relationship has to be softened in the first step in order to use the consolidation potential in the PI.

Standardisation of logististics operations
Building on the PI-coopetition model a concept for the standardization of information (data, formats and content), communication technology (electronic data transfer, data access and IT functionalities), logistics processes, products and mathematical optimization logics has to be created. This standardization is required in order to make the various products and services of the forwarders comparable and connectable. However, the risk exists that individual branch-specific solutions (specific unit loads, lead times, observance of specific time windows) cannot be implemented in a PI solution in the first phase and therefore continuing parallel to the PI-cooperation model on the market.
Therefore, not only the diversity of transport management systems and ERP-software but also the lack of consistent data structures in the background of these systems is a tremendous obstacle in the area of ICT. Thus, the integration of several partners to a central IT-system requires an elaborate and cost-intensive design of interfaces. Therefore, it is a great challenge to identify widespread data standards (eg. XML based) and data classes in order to define the required shipment information to achieve standardization. An early automated feeding of standardized shipment information of the various partners in the network into the system, gives the PI-hypersystem the necessary preliminary lead time to bundle cargo with different priorities according to predefined mathematical optimization logics including the capacity of the carriers. A remaining substantial barrier to implement these standards within the existing competitive market lays in the big market players who will definitely try to protect their huge investments in infrastructure and ICT made in recent years, which is interpreted as their competitive advantage.
One unsolved question identified by the project Go2PI is, if a standardized PI-container already shall be used in the first implementation phase (as postulated by PI-theory) or if it is more practical to create a standardized intelligent identification technology at first, which is can be applied to existing unit loads, too. Interviewed forwarders as well as senders were quite critical concerning the concept of standardized PI-containers. Therefore it seems to be a more acceptable and practical approach to create a communication module to interact with standardized identification tools at used hubs. Thus, PI-unit loads could be identified and handled within the network at each physical interface equipped with the corresponding hardware. Another important constraint to consider is the compatibility for this potentially new system to unit loads which are not equipped with these modules.

Standardisation of financial clearing models
An additional crucial implementation step for the PI is the definition of rules for fair and flexible pricing, sharing of profits, shareholder models for direct members and partner models for additional service provider. A specific economic incentive of the researched PI-concept is the option of getting flexible transport tariffs in comparison to existing rigid ones. This means that monetary improvements (operational savings) in future are fairly distributed not only among the system partners, but also among the clients in the sense of variable transparent rates. Such a principle generated for non-urgent freight additionally enables the possibility of using low-cost transport time windows and creates further optimization potential (according to the principle “non-urgent goods are transported, whenever remaining capacity is available”).
A main identified research objective for the near future is the design of a pioneering cooperation model for the cargo management, which plans, consolidates and controls the single unit loads of all partners cross-company-wide via a designed internet platform. Another main resulting question is, if the PI-hypersystem is “just” an integrative platform to bring supply and demand together, or if the PI-hypersystem is a proactive software tool, that not only integrates but also suggests qualified transport service providers for specific transport orders to optimize filling degrees, routes and costs. In the next step a qualification process for these so-called “Qualified Physical Internet Transport Service Providers” (qPITSP) will be developed and designed and finally the success of the PI will be dependent on how senders trust the system concerning the reliability of the carriers.

Keywords:

Physical Internet, PI Guidelines, coopetition, standardization, roadmap to PI, Go2PI

Related Session:
Workshop WP2: Toward a Physical Internet: An Austrian Experiment
Wednesday, June 29, 3:20pm - 4:20pm

## Hyperconnected City Logistics and Last Mile Delivery

#### Ahmed Chakroun, Hassan Abbar and Mounir Elaraki Tantaoui

Abstract

City logistics provides the final and last segments of the physical internet logistics and transportation networks. In this paper, we will present a new scheme for big cities where we imagine the use of most existing public and private infrastructures and means of transportation to deliver encapsulated goods rapidly and safely from origin to destination. In order to enhance the efficiency and sustainability of current transportation systems, we propose with the help of existing different means of transportation and platforms as a city backbone, to determine the optimal localization of urban-hubs and open DCs. For that, we will use the map of transportation lines of Casablanca city (the biggest city, principal port, and economic capital of Morocco) to minimize the maximum travel time (or distance) and ensure a better interconnectivity between nodes. We will also determine some criteria to choose the nodes that can be used as an urban-hubs or DCs.

Using existing means of transportation and platforms intelligently, encapsulated goods will be delivered more efficiently.

Keywords:

Hub location, physical internet, city logistics, open DC

Related Session:
Workshop TP1: Hyperconnected City Logistics, Last-Mile Delivery and Smart Lockers
Thursday, June 30, 2:55pm - 3:55pm

## Hyperconnected City Logistics for Furniture and Large Appliance Industry: Simulation-based Exploratory Investigation

#### Mohit Goyal, Jacob Cook, Benoit Montreuil, Nayeon Kim, Christian Lafrance

Abstract

In general, the furniture and large appliance industry is currently a disconnected supply chain which forms an interesting area for Physical Internet inspired analysis and intervention. This paper thus aims to provide insights into the effectiveness of the hyperconnected supply chain in serving urban environments through simulation-based scenario analysis. Openly sharing storage space of distribution centers reduced travel distance for delivery by 26%, delivery cost by 20% and man hours by 17% compared to individual operation. Openly sharing delivery assets as well as distribution assets reduced the above measures by 60%, 46%, and 40%. Introducing cross docks and discretize delivery utilizing more fuel efficient vehicle in last mile further increased the savings in total cost to 60% and required man hour to 58% as well. However, introducing additional distribution center at city center had little effect. The impact of distribution center location optimization is studied as well. Overall, the results are encouraging implying that even a small step towards a hyperconnected supply chain can lead to dramatic savings.

Keywords:

Hyperconnected City Logistics, Furniture and Large Appliance Industry, Physical Internet, Last Mile Delivery, Open Asset Sharing, Open Pooling, Hyperconnected Distribution, Hyperconnected Supply Chain, Hyperconnected Delivery Routing, Simulation

Related Session:
Workshop TA1: Hyperconnected Logistics Experiments in Home Fashion, Furniture and Appliance Supply Chains
Thursday, June 30, 8:00am - 9:00am

## Hyperconnected City Logistics: Smart Lockers Terminals & Last Mile Delivery Networks

#### Louis Faugere

Abstract

Over the last decade, the e-commerce industry revolutionized the way people are shopping, and transformed the B2C industry, increasing the needs for home delivery. In a world where urbanization creates mega cities, last mile delivery becomes a real issue for both urban planning and logistics providers’ operating costs. Born from the Physical Internet’s concepts, Smart Lockers Terminals bring a solution to absorb the growth of e-commerce in urban areas, leveraging consolidation opportunities, or crowdsourced delivery opportunities. Parcel delivery companies already implemented this solution, sometimes along with a network of partnered business access points. We examined in this paper the different business models and capabilities they offered to better understand the trends that will change the way we deal with parcel deliveries tomorrow, focusing on the development of the Smart Lockers Terminals solution.

Keywords:

Smart lockers, Physical Internet, hyperconnected city logistics, last mile delivery, smart city logistics, e-commerce, parcel delivery, business model

Related Session:
Workshop TP1: Hyperconnected City Logistics, Last-Mile Delivery and Smart Lockers
Thursday, June 30, 2:55pm - 3:55pm

## iHub: Hyperconnected Electric Mobility Exploiting Physical Internet Hubs

#### Marcel Huschebeck and Michael Schygulla, PTV Group

Abstract

City terminals as part of European LTL logistics networks are based on highly structured processes, however lack on unit size standardization. In daily practice, cargo stacked on palettes is fragile, not in line with standard palette footprints and heterogeneous in goods structure thus, avoiding an efficient filling of loading space and resulting in long consignment building and loading times. In addition typical operational processes at hubs are characterized by inbound traffic and delivery in the morning hours while pick up and outbound traffic in the afternoon and evening hours. Overall, the present logistics design is to ensure a one time filling and emptying of hubs.

Using standard modular loading units suggest to be a game changer to better exploit transshipment capacity and truck efficiency within LTL networks. The German Minister of Economy and Technology co-funded the research project “iHUB: Smart IT Platform for electro mobile, sustainable and efficient infrastructure and fleet management at logistics hubs”. iHub is a comprehensive  approach of six research and industry partners to introduce heavy electric trucks in LTL networks and delivery structures, thus being a decisive step towards hyperconnected hubs within a PI environment and Smart Grid. iHUb is setting up an integrated IT platform for planning and optimising fleet and energy management of distribution fleets addressing the combination of 3 technical systems:

• Predictive battery management for optimum deployment of electric trucks
• Dynamic trip planning procedures
• Integrated energy management for hubs, enabling a cost efficient recharging at hubs

Combining Smart Grid and PI hubs suggest a lot of synergies. Trucks can be integrated into the already existing electricity users at hubs. A prerequisite is an extended energy supply providing energy storage possibilities and fast charging facilities in order to recharge trucks during loading and unloading. Advanced energy management systems taking into account trip planning systems calculating the energy use for the next execution and integrating these into the overall hub energy management are a central part of the iHUB system.

Hyperconnected PI need to advance in three directions. Firstly, to make hub operations more efficient by means of faster loading and unloading as well as through a better utilization of truck capacity. Secondly, it is to reduce handling time for sorting and consignment building. Thirdly, to ensure a more dynamic planning of outgoing and incoming cargo being dynamically dispatched on the best available capacity at the hub, preferably on electric vehicles ensuring an emission free distribution into inner city areas.

iHUB is to demonstrate such a hyperconnected hub using a Schencker hub located in Berlin and introducing LTL trucks larger than 12 tonnes within an integrated energy management system. For doing that a iHUB platform will be set up including a hub energy management system, integrating own energy production, energy storage at site and smart procedures to manage energy needs at low costs. The platform will be linked to dynamic trip planning procedures that feed on the one side the hub energy management system with predictive data on the state of use of the trucks available at site. On the other side the state of use will be the basis for the trip planning to assign best available cargo on trucks. Aim is to have a fully optimized operation of mixed fleets, of diesel propelled as well as of electric trucks within an optimized hub energy management.

iHUB provides the possibility to demonstrate the capabilities of heavy electric trucks within LTL distribution processes, to introduce and address the idea of modular load units into LTL networks and, to open the door for more frequent inbound and outbound waves as part of shared hub activities due to improved handling and cross docking.

Keywords:

Hyperconnected Hubs, Dynamic logistics and energy management, Heavy electric trucks

Related Session:
Workshop TP6: Hyperconnected Electric Mobility Exploiting Physical Internet Hubs
Thursday, June 30, 4:00pm - 5:00pm

## Impact of Inventory Policy on Last Mile Delivery of Furniture and Large Appliance upon Open Asset Sharing: Simulation-based Approach

#### Nayeon Kim, Benoit Montreuil

Abstract

Open asset sharing is one of the concepts that forms the basis of Physical Internet. Naturally, interests of different parties are conflicting in such setting especially when existing assets independently owned by participants are now shared. Therefore, it is important to consider the impact of strategies of participants to successfully implement hyperconnected logistic system in real world. Moreover, the benefits of hyperconnected supply chain can vary significantly by strategies of participants. We examined the impact of inventory policy on the performance of last mile delivery of furniture and large appliances in urban setting under scenarios where retailers are openly sharing their logistic assets, storage and delivery, using simulation. Significant difference in savings achieved by open asset sharing by inventory policy has been shown which further highlights the importance of behavior of participants for successful implementation of Physical Internet in real world.

Keywords:

Physical Internet, Last mile delivery, Product Deployment, City logistics, Open asset sharing, Open shared storage, Open shared delivery, Furniture and large appliances, Simulation, Scenario analysis

Related Session:
Workshop TA1: Hyperconnected Logistics Experiments in Home Fashion, Furniture and Appliance Supply Chains
Thursday, June 30, 8:00am - 9:00am

## Less-than-truckload dynamic pricing model in Physical Internet

#### Bin Qiao, Shenle Pan and Eric Ballot

Abstract

This paper investigates a decision-making problem consisting of less-than-truckload dynamic pricing (LTLDP) under Physical Internet (PI). PI can be seen as the interconnection of logistics networks via open PI-hubs, which can be thought of as spot freight markets where LTL requests of different volume/destination continuously arrive over time for a short stay. Carriers can bid for the requests of their interest with using short-term contract. This paper proposes a dynamic pricing model to optimise carrier’s bid price and probability to win requests to maximise his expected profits. The results provide useful guidelines to carriers for making pricing decisions in PI-hub.

Keywords:

dynamic pricing, Physical Internet, Less-Than-Truckload, auction

Related Session:
Workshop TP2: Physical Internet Analytics and Pricing
Thursday, June 30, 2:55pm - 3:55pm

## Networking in the Real World: Unified Modeling of Information and Commodity Distribution Networks

#### Amitangshu Pal and Krishna Kant

Abstract

Computer networks and Logistics systems are two very rich fields of study that have grown almost entirely separately since they deal with entirely different entities – information packets vs. real commodities. Recently Physical Internet has been studied that attempts to revolutionize product distribution logistics by emulating the cyber Internet. While the architecture of physical Internet introduces a number of key characteristics (standardization of labeling and packaging, sharing of physical distribution infrastructure among multiple companies, worker friendly logistics etc.), the requirements of perishable logistics and their fresh delivery remained untouched. The distribution of perishable commodities such as fresh food, perishable pharmaceuticals, blood, etc. brings in some special challenges and opportunities that make comparison with information networking particularly apt.

In this paper, we show that considerable synergies exist between Information Networks (IN) carrying time-sensitive information and Perishable Commodity Distribution Networks (PCDN), which can be exploited for solving complex problems in both fields. PCDN involves a flow of packages or package containers (that we can regard as packets) from source (e.g., farm, factory, blood bank, etc.) to destination (e.g., retailer, hospital, etc.). The flows may pass through some intermediate distribution centers that “store and forward” the packets much like IN routers. Most flows also have Quality of Service (QoS) constraints in terms of delivery times and/or flow bandwidth (volume delivered/day). Other than that perishable goods often deteriorate in quality (or freshness) and value as a function of flow time (and other parameters such as temperature, vibrations, etc.) although some perishable goods, such as blood, have a fixed expiry duration. Similarly IN packets often have fixed deadlines, but there are scenarios where the value of information decays steadily with the delay incurred, such as in sensor networks or in financial transactions etc.

However, there are important differences as well. The most fundamental characteristic of a physical packet (or package) is that it is “unclonable”; it can exist only in one place at a time – even though one could surely replace a lost packet by an identical one from the source. Another fundamental difference is that unlike IN, physical packets do not move by themselves; instead, they need one or more additional resources for successful transit. The most important resource is a carrier, which could be a truck, railcar, plane, boat, etc. and the associated driver (unless the carrier is self-driven). Other resources include containers (perhaps even containers within containers), and load-unloading equipment. Although IN systems sometime consider circulation of empty frames that are filled up as the frame passes a sender node, this is rare. INs may also need other resources (buffers, transmission and processing capabilities etc.), but the functionalities are often far simpler. In particular, in PCDN the resources such as trucks, containers, drivers could be distributed throughout the network and need to be properly positioned, whereas the IN resources are generally non-mobile.

In spite of some fundamental differences between IN and PCDN described above, we believe that there is considerable value in attempting to capture the essence of both in a single model. Towards this end, we have explored a 5 layer networking model that encompasses both IN and PCDN and allows application of ideas and techniques across two very different fields. The first layer is the “Physical Layer” that deals with the actual movement of a packet along a media segment or channel. The second layer is the “Media Switching Layer” that provides the media/channel selection, media bridging, and switching functionalities. Then comes the “Routing & Distribution Layer” which supports end-to-end transfer of packets by handling packets at and across distribution/routing nodes. The fourth layer is the “Transport/Delivery Layer” that concerns the end-to-end assured delivery of individual packets (which may have been bundled recursively before transportation and then unbundled for final delivery). The destination will check the packets for loss, damage, deadline expiry, and quality degradation, and accordingly make decisions regarding reorder or replacement. Finally the job of the “Virtualization Layer” is to share the network capacity efficiently while still ensuring isolation among the various services/applications. In particular, this layer can define and maintain one or more virtual networks that are then mapped on to the physical network.

The layering allows us to introduce modeling simplifications via level-specific abstractions. As the automation in PCDN increases, the layered architecture becomes more and more important as it regularizes the product handling at various points. In situations where layering hinders efficient operations, cross-layer methods can be exploited to address them while still limiting the overall complexity. In this paper, we illustrate how such a view can be useful in exploiting the synergies, and expect that it will lead to much broader collaboration, cross-pollination, and unique insights that will significantly advance both fields.

Given the complexity of packet transit in such a unified model, its mathematical modeling is quite challenging and goes well beyond the simple queuing theoretic modeling that is quite common in IN. In particular, such modeling not only needs to deal with batch transmission (or bundling/unbundling), but also with allocation/deallocation of multiple resources whose scope often extends to the entire network instead of being limited to a node or link. The contention for resources results in the “blocking” phenomena, which can be quite difficult to model. For example, a transit may be blocked waiting for arrival of additional packets (to satisfy batching requirements), a suitable number of containers, and a carrier. The containers and carriers may in turn be held up elsewhere in the network. Thus approximate solution methods are almost mandatory, and developing an approximation technique and characterizing its properties becomes quite challenging. In this paper we propose an analytical modeling of such an approximate scenario using the idea of batch queuing and analyzed the impact of waiting time latency of the packages for resources (trucks) on the freshness delivery quality of these packages. We also validate the correctness of our analytical modeling with extensive simulations. We expect that the paper will motivate researchers in the two communities to exploit further synergies and thereby advance both fields.

Keywords:

Perishable commodity distribution networks, Physical Internet, Fresh food logistics, Infrastructure sharing, Transportation efficiency, Unified networking model

Related Session:
Workshop TA2: Open Logistics Interconnection Model & Protocols
Thursday, June 30, 8:00am - 9:00am

## Packaging Optimization: The Hazards of Distribution

#### Tom Blanck

Abstract

The Physical Internet will demand the product – package interface is designed for distribution. No matter their industry or shipping mode - from retail, to small parcel, to industrial business-to-business - shippers around the world and their products can be subjected to any or all seven major distribution hazards. As the physical internet evolves and new distribution channels emerge, your product will endure a far more stressful environment to reach the end customer. During this technical presentation, we will describe the static and dynamic forces impacting products during distribution throughout the supply chain, end-to-end.

This case study format will help attendees understand what happens to packaging in the supply chain and how to reduce supply chain risk by modifying procedures or packaging. In this presentation, we will present the hazards and explain how to avoid them, how these activities are supported by the financial benefits of packaging optimization, including increased customer service levels, reduced returns and increased sustainability. By exploring real-world case studies, we will show how a clearly thought-out packaging process can effectively mitigate even the most complex packaging damage problems, and the role of packaging strategy and analysis to meet distribution channel changes and challenges, including transfer through the physical internet.

Keywords:

Packaging Optimization, Packaging Cost Optimization, Sustainable Packaging, Sourcing, Procurement, Materials Handling, Packaging Design, Physical Internet

Related Session:
Workshop WP4: Toward Hyperconnected Packaging Optimization
Wednesday, June 29, 4:25pm - 5:25pm

## Performance evaluation of interconnected logistics networks confronted to hub disruptions

#### Yanyan Yang, Shenle Pan and Eric Ballot

Abstract

This paper investigates performance of interconnected logistics networks confronted to disruptions at hub level. With traditional supply chain network design, companies define and optimize their own logistics networks, resulting in current logistics systems being a set of independent heterogeneous logistics networks. The concept of PI aims to integrate independent logistics networks into a global, open, interconnected system. Prior research has shown that the new organization can reduce the actual transportation cost through the optimization of full truckload and integration of different transportation means. Continuing along these lines, this paper examines how the interconnected logistics networks applying PI deal with disruption problems at hubs. To attain this, a multi-agent based simulation model with dynamic transportation protocols is proposed. Random disruptions at hubs are considered. Case studies of FMCG cases in France have been taken out. Results suggest that though exposed with disruption risks the PI is a robust logistic system. This paper indicates a novel approach to build a resilient supply network.

Keywords:

Disruption, Physical Internet, Simulation, Routing

Related Session:
Workshop WA3: Resilience of Physical Internet Networks
Wednesday, June 29, 11:20am - 12:20pm

## Physical Internet Applied in the Major Home Fashion Products Retail Industry: A Collaborative Endeavor by Sears Canada and Clear Destination

#### Daniel Pronovost , Director Home Delivery Operations, Sears Canada Inc. Christian Lafrance, CEO, Clear Destination Inc.

Abstract

In 2015 E-tail accounted for 10% of the major home fashions sales in Canada and 18% in the USA. E-tailers offer up a wide variety of SKU’s with both high and low inventory turns. Growing online sales have caused the retail environment to transform the way it plans, buys and moves goods through its existing supply chain to service their stores and their customers. There is now less inventory, both in terms of quantity and number of SKUs. There is a shift gravitating towards a “vendor to customer” supply chain set up. This transition frees up logistics capacity and presents an opportunity to leverage the supply chain of impacted retailers for servicing other retailers and manufacturers, in the spirit of the Physical Internet. We present such a case in which Sears Canada, using Clear Destination technology.

Keywords:

home fashion, furniture, appliance, supply chain

Related Session:
Workshop TA1: Hyperconnected Logistics Experiments in Home Fashion, Furniture and Appliance Supply Chains
Thursday, June 30, 8:00am - 9:00am

## Physical Internet Enabled Hyperconnected Modular Production with Dynamically Deployable Resources for Assembly Process

#### Suzanne Marcotte and Benoit Montreuil

Abstract

As the transportation modes and free trade agreements between countries evolves, the flow of goods increases all around the world. There is thus a pressure on the logistic web to optimize its design and management such to lower its cost and its impact on the environment. However, the efforts done individually by companies are far from sufficient to lower substantially the CO2 emissions and the cost involved along the logistics web. To cope with this, logistics web needs a major shift on the way physical objects are moved, stored, realized, supplied and used throughout the world. The Physical Internet initiative has been proposed by Montreuil (2011) to address this grand challenge.

There are many factors that makes actual logistic web costly and inefficient. One of these factors is that the facilities realizing and storing the products are typically long to build and need a high investment. To address this challenge, this paper focuses on hyperconnected mobile modular production which is one of the concepts proposed in the Physical Internet scheme is the which focuses on the realization web interconnecting the way physical objects are realized (e.g. produced, made, assembled, finished, etc.). The modular concept can also be applied to storage of some of the finished goods in the distribution web. (stored closer to customers). These are two of the five components of the logistics web (Montreuil et al. 2013). The paper thus proposes a modeling approach that addresses the dynamic deployment of resources of the realization and the distribution webs while considering its link with the supply web and the customers demand through a production and an assembly process.

The approach exploits and enhances the well-known modular production concepts (Starr 1965, Tompkins et al. 2010) and builds on the recent process and technological innovations on mobile modular containerized production (Lier 2015) and labs (Shibomana 2015). Presented at the 2nd International Physical Internet Conference in 2015, the projects of Bayer and of Proctor and Gamble are developed under the modular production scheme (Kessler 2015, Lier et al. 2013, Lier et al. 2015, Shibomana 2015). Hyperconnected modular production exploits the dynamic deployment of (containerized) production modules in open facilities (fabs) across territories for enhanced flexibility and adaptability. The facilities are designed to ease the implementation, operation and relocation of the production modules.

Keywords:

Modular Production, Mobile Production, Hyperconnected Production, Physical Internet, Assembly Process, Dynamic Reallocation, Resource Deployment, Modeling, Adaptability, Flexibility

Related Session:
Workshop FA3: Hyperconnected Modular & Mobile Manufacturing
Friday, July 1, 8:00am - 9:00am

## PI-Based Automated Diagnosis: The Blood Supply Chain Perspective

#### Quentin Schoen, Franck Fontanili, Matthieu Lauras, Sébastien Truptil and Anne-Ghislaine Anquetil

Abstract

The blood supply chain is sensitive because of the product diversity, the traceability requirements and the storage conditions. Improving continuously the performance of such a supply chain is therefore of prime importance. The usual way to do such a thing consists in establishing a diagnosis based on interviews and/or manual IT systems retrievals. In this research work, we suggest an approach that is coupling Physical Internet (PI) and Process Mining (PM) principles to automatically diagnose the processes of a supply chain. Basically, PI-containers are used to generate in real-time specific log files that can be interpreted by a PM software in order to model automatically the situation and diagnose the processes followed with accuracy and representativeness. An application case of an indoor subset of the French blood supply chain is developed to illustrate the potential benefits of this proposal. By using aggregation treatments and combined indoor/outdoor technologies, future research works would permit to diagnose and improve the whole blood supply chain.

Keywords:

Diagnosis, Identification, Tracking, Physical Internet, , Process Mining, Blood Supply Chain

Related Session:
Workshop WP5: Hyperconnecting Fresh Supply Chains
Wednesday, June 29, 4:25pm - 5:25pm

## Root of Trust in the Physical Internet

#### Georg Simhandl, Mathias Tausig and Horst Treiblmaier

Abstract

Lack of trust is one of the biggest barrier for the adoption of the Physical Internet (PI). Building trust requires safeguarding the integrity of data and software, especially on the smallest computational units of the PI; the smart tags. This research project focuses on a lightweight Root-of-Trust model and takes the dynamic nature of the IoT and the PI into account. Therefore we propose a secure firmware update mechanism for smart tags. By measuring the performance on a low-cost hardware we proof the applicability and pave the way for trust in the Physical Internet.

Keywords:

Root of Trust, Secure Firmware Update, Physical Internet, Internet of Things

Related Session:
Workshop TP5: Enabling Security and Trust in the Physical Internet
Thursday, June 30, 4:00pm - 5:00pm

## Securing Supply Chains from Counterfeiting Threats in a Transformed Open and Collaborative Enterprise

#### Doug Bodner

Abstract

Supply chains are increasingly subject to intrusions from counterfeit parts.  For instance, the past fifteen to twenty years have seen the issue of counterfeits parts manifest in the defense supply chain.  For the most part, counterfeits have been electronic components such as integrated circuits and field-programmable gate arrays.  These parts are used primarily as replacements in sub-systems for submarines, aircraft and other military platforms.  Counterfeit parts pose safety and reliability risks for these platforms.  They also pose cybersecurity risks, as electronic components may contain back-doors and other security threats

We can look at two perspectives for the rise of counterfeiting.  First, there are global trends driving this phenomenon.  Electronics manufacturing has been mostly off-shored from the United States.  Most counterfeiting incidents are traced back to foreign sources.  Sub-systems are increasingly complex.  Thus, it is difficult to detect counterfeit components that are constituents in these sub-systems.  Military systems are deployed in service for longer periods of time, driving obsolescence of sub-systems and components.  It becomes more difficult to source genuine replacement components for obsolete sub-systems.  Finally, electronic waste has become a significant problem for developed countries.  While responsible recycling exists, large quantities of waste are shipped to third-world nations, and some electronic components return to the supply chain as recycled or defective components that are re-marked as new.

On the other hand, we can also look at the characteristics of the supply chain.  The defense supply chain is a multi-tiered, complex network of suppliers.  Lead systems integrators have traditionally not had visibility to suppliers that are more than one or two times removed from them.  The defense supply base has experienced the phenomena of sole-sourcing and diminishing suppliers, both of which pose original supplier sourcing risks that may lead to sourcing from counterfeiters.  Finally, the supply chain operates as an extended enterprise consisting of government agencies and private firms.  The Department of Defense can set policies for acquisition and sustainment supply chains.  Customs and Border Patrol inspects incoming goods for counterfeits, and the Department of Justice investigates and prosecutes counterfeiting crimes.  Yet, there is no locus of control, and counterfeiters and legitimate suppliers may exhibit adaptive behavior that undermines the effectiveness of policy intents.

Our previous research has investigated the problem of counterfeit parts in the defense supply chain using enterprise simulation.  This approach has allowed testing of different anti-counterfeiting policies in this extended enterprise in which adaptive behavior can cause unintended secondary effects.  Policies include supplier qualification, increased test and evaluation, planned sub-system design refreshes, lifetime buys of obsolete components, system design considerations for selection of reliable suppliers, and restrictions on export of electronic waste.  In this paper, we extend this model to consider the threat from counterfeit parts in the context of a transformed enterprise using an open and collaborative supply chain that can enable new protocols for addressing counterfeits.  Such protocols include supplier reliability ratings, supplier visibility through tiers, and lifecycle part tracking.  The paper addresses how this open and collaborative supply chain is modeled using enterprise simulation.  The model combines agent-based modeling for networked relationships and supply chain actor behaviors with system dynamics models for exogenous phenomena that affect the extended supply chain enterprise (e.g., technology progression and recycling market behavior).  Then it addresses how policies and protocols for anti-counterfeiting are modeled and demonstrates example of policies and their effectiveness.  We conclude with discussion on potential obstacles to the transformation from the current supply chain to the open and collaborative supply chain enterprise.

Keywords:

Counterfeit parts, Enterprise simulation, Open collaborative supply chain enterprise

Related Session:
Workshop TP5: Enabling Security and Trust in the Physical Internet
Thursday, June 30, 4:00pm - 5:00pm

## smartBOX – an Austrian PI solution leading to small loads mobility 4.0

#### Harald Kapplmüller, Hans-Christian Graf, Sophie-Therese Hörtenhuber, Rainer Widmann and Burkhard Stadlmann

Abstract

Considering the ideas of the Physical Internet (PI) this paper summarizes researched and engineered core elements of small load containers being essential for the implementation of small loads distribution systems.
In general the European freight market can be characterized by rising transport needs coupled with a shortage of resources. Increasing customers service awareness, pluralization of life forms and ongoing developments in the e-commerce area are growing the amount of transports in general and in the fields of small loads (packages, unit loads or luggage) especially.

These actual trends require new service portfolios in the small loads market. In order to align environmental needs to the hitherto relatively inflexible systems of customer deliveries new approaches outside the current paradigm are demanded. The Austrian smartBOX project allows a new framing of the small goods transportation by the conception of an intelligent and holistic approach, considering the ideas of PI and aligning those to the needs of the future.
Thematic outline and research approach to the smartBOX developments:

• At first existing barriers and practical problems in the segment of parcel deliveries were raised by interviewing market participants from the CEP sector by use of guideline-based interviews.
• Furthermore desktop research and qualitative content analysis yielded results regarding future developments and framework conditions for several delivery scenarios.
• In a next step those conditions and facts were assigned to predefined categories like market, logistics, law, economics and infrastructure and led to a comprehensive description of the business processes containing all core elements of the framework including trends and customer needs.
• Following these theoretically and practically compiled preconditions a certain amount of use cases was defined as basis for the development and engineering of a comprehensive and integrated concept called “small loads mobility 4.0”. This highly integrated approach includes complete new rules for the business logics as well as the technical elements like construction details of reusable and environment friendly containers – the smartBOXes –  and related IT-components.
• Based on this concept performance figures as well as detailed system functionalities were derived finally.

Description of the paper content:
The designed business process concept and the technical equipment for the new smartBOX system follow ideas and aims which are specifically subject to PI principles. The paper illustrates how the smartBOX concept is leading to “small loads mobility 4.0”.

The main targets of traffic reduction and of increase of truck fill rates are realized by execution of asset sharing. The main idea is to distribute all kind of small goods and in particular packages, small unit loads and luggage via a service provider open network, allowing transport quantities to be bundled at all transport steps in order to make the flows of goods economically, ecologically and socially more efficient as well as more sustainable. Furthermore, a so called hyper system is designed to centrally host all relevant transport data within a protected but open data cube.

Information flows are made accessible to all market participants in order to manage the material flows through a system of open infrastructure (including asset sharing at all steps of delivery processes) without friction losses. A selected operator or the hyper system itself controls and regulates the access to information that is relevant for ICT and logistics. In addition to the technical design the legal and logistical framework conditions are drafted to enable the integration of existing providers and common infrastructure efficiently.

The paper defines and describes the functional elements of a typical smartBOX operator or of a smartBOX hyper system as: ICT, logistics, organization & legislation and infrastructure.

The paper documents how business processes and the resulting use cases were created as research basis for the development of practical application areas leading to the integrated and new small loads mobility 4.0.

Derived from the requested functionalities of the predefined use cases, specific performance contents of the designed system could be collected in a next step. By comparing the use cases and the status quo situation in the CEP sector regarding user processes and business models the three core elements standardization, equipment (container & terminal) and ICT should be analyzed and forecasted to identify remaining practical challenges of future small loads mobility.

Keywords:

Physical Internet, Realization of the Physical Internet, smartBOX, PI container, core elements small loads mobility

Related Session:
Workshop TP4: Hyperconnected On-Demand Urban Delivery
Thursday, June 30, 4:00pm - 5:00pm

## The social acceptability of the Physical Internet: The unforeseen challenge?

#### Yan Cimon

Abstract

The Physical Internet (PI) is a transformational concept.  In recent years, while production and distribution networks have become increasingly global (e.g. Yeung & Coe, 2015), many technical issues and practical applications of the concept have been studied and implemented.  Activities related to moving goods and people have been met with increasing resistance by communities.  Yet, preoccupations about the PI’s social acceptability have seldom been addressed.
The purpose of this paper is to put forth a framework that will help implementers of PI initiatives deal with social acceptability issues around the reshuffling of logistical flows induced by the PI.  This paper looks into the literature on corporate social responsibility that focuses on the acceptability of transportation, warehousing and distribution projects.

Through a structured literature review, the paper develops a tentative typology and a set of propositions as well as best practices.  It finds that while disruptive innovations are generally welcome with optimism at earlier stages, this optimism eventually gives way to skepticism.  The implication is that the PI’s sustained penetration will lead to a substantial evolution in logistics management, decision-making and modes of transportation. This will cause increased awareness by stakeholders of how PI-related activities will impact them.

Keywords:

Corporate social responsibility, Physical Internet implementation, global networks

Related Session:
Workshop WA1: Social Acceptability and Sustainability of the Physical Internet
Wednesday, June 29, 11:20am - 12:20pm