Physical internet manifesto 1.8 2011 03-28 english bm

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. 2/83 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



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



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



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



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



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



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]



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.



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]



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



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



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



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



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



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



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



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



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



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Mapping unsustainability symptoms to environmental, environmental and societal facets



Readdressing the Goal

GOAL Enabling the global sustainability

of the transport, handling, storage, realization, supply and usage of physical objects across the world



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



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.



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?



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/



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



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/



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



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



Exposing 13 Key Features of the Physical Internet Vision




Thirteen Key Features of the Physical Internet Vision

1.   Encapsulate merchandises in world-standard smart green 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



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



  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 1. Encapsulate merchandises in

world-standard smart green modular containers π-containers are key elements enabling the interoperability

necessary for the adequate functioning of the Physical Internet   Merchandise is unitized as content of a π-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



π-Containers: Modularized and standardized worldwide

in terms of dimensions, functions and fixtures

π-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



π-Containers Easy to handle, store, transport, seal, snap, interlock, load,

unload, construct, dismantle, panel, compose and decompose

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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 π-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



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



  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 π-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 3. Evolve from material to π-container

handling & storage systems

π-container handling and storage systems, with innovative technologies and processes exploiting the characteristics of π-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





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



 π-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 π-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 4. Exploit smart networked containers

embedding smart objects

Exploiting as best as possible the capabilities of smart π-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 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 π-containers and π-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 5. Evolve from point-to-point hub-and-spoke transport

to distributed multi-segment intermodal transport

Distributed multi-segment travel of π-containers through the Physical Internet,

with distinct carriers and/or modes taking charge of inter-node segments,

with transit nodes enabling synchronized transfer of π-containers and/or carriers between segments,

and with web software platform enabling an open market

of transport requesters and transport providers



  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



  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



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



  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




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

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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



π-Transit sites allowing distributed

multi-segment transport through the Physical Internet

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Road-Water π-Hub designed for enabling


of π-containers through the Physical Internet




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 π-containers

through the Physical Internet



Physical Internet

6. Embrace a unified multi-tier conceptual framework

Intra-Center Inter-Processor Network



Intra-Facility Inter-Center Network

Physical Internet




Intra-Site Inter-Facility Network

Physical Internet




π-transits & π-hubs

Intra-City Inter-Site Network

Physical Internet


Toward π-enabled!sustainable!

city logistics!



Québec, Canada

North eastern states, U.S.A.

Intra-State Inter-City Network

Physical Internet


π-transits & π-hubs



Physical Internet




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 π-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 !



  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



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




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

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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 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



  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



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 9. Minimize physical moves and storages


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



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




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: 1,73��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

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2

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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



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 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 10. Deploy capability certifications and

open performance monitoring

Live open monitoring of really achieved performance of all π-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 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 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 π-containers • The physical and informational integrity of π-containers, π-

movers, π-routes and π-nodes • The informational integrity of π-actors (humans, software agents) • The robustness of client-focused performance in delivering and

storing π-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 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 π-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? !



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




  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




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



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 addressing unsustainability symptoms

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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



Realizing the Vision




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 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 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



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



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)



Questions and comments are welcome

Questions et commentaires sont les bienvenus

Fragen und Kommentare sind willkommen

Las preguntas y los comentarios son bienvenidos

[email protected]

Physical internet manifesto 1.8 2011 03-28 english bm

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