A few weeks ago I witnessed supply chain history in the making.
The Port of Rotterdam signed a contract for a system that will enable inland shipping companies to take supply chain collaboration to the next level. There were at least two noteworthy aspects:
- The Port was signing on behalf of Nextlogic, an organization that represents all affected parties in this particular logistics chain.
- The inland shipping community (i.e. the barge, terminal and depot operators) at the Port have agreed to entrust the decisions that affect their operations to an intelligent system.
Using information from all parties, the system will synchronize and optimize terminal and depot allocations to reduce waiting times and improve efficiency. Just a few years ago, this kind of collaborative optimization seemed unlikely. While Collaborative Planning, Forecasting and Replenishment (CPFR) enabled retailers and suppliers to share information, they still made their decisions independently.
There were two significant barriers: trust and technology. As recently as 2009, The Economist Guide to Supply Chain Management doubted that intensive collaboration was possible in the real world: ‘Theoretically, the ideal solution would be to assign an omnipotent player to gather and optimize information from all the players in the supply chain… This party would be in a position to ensure that optimal decisions were made…’
In 2015, that omnipotent player is no longer a theoretical possibility. It is being created and will be implemented at the Port of Rotterdam in 2017.
The impetus for this breakthrough was massive congestion at the Port, with waiting times of up to 100 hours. Each barge operator was operating as an independent player in a situation that required synchronization. The cumulative result of their suboptimal decisions was a costly loss of productivity for all involved: terminals, depots, barges and end customers.
Crucially, the ‘omnipotent player’ that will be making decisions at Rotterdam will be absolutely neutral. Brein, (or ‘brain’ in English) as the system is known, will ensure that all parties are treated equally. What’s more, the operational collaboration that Brein enables will co-exist with healthy business competition among the Port’s inland shippers.
The impact of an innovation like Brein could be world changing. For example, if logistics service providers in Europe were to transfer some of their decision-making to a system like Brein, they would save an enormous amount in time, money and, of course, CO2 emissions.
There are many places – ports, airports and even industrial areas in cities – where collaborative optimization by a neutral system could go a long way in solving the big problems of today.
The breakthrough at Rotterdam is just the start of a new era of collaborative optimization. I hope you agree that it’s an inspiring example of what’s possible when supply chain participants sit down together to create a win-win-win solution – for themselves, their customers and society.