14-05-2019, The Student Hotel, Eindhoven
On May the 14th, Data2Move hosted her sixth event at The Student Hotel in Eindhoven. In line with the previous events, this happening was themed ‘Customer Sensing and Responding’ after the last Data2Move research charter.
As our greatest common Data2Move denominator prescribes, the event had a strong focus on using data to boost supply chain performance. Our ‘data of choice’ for this event was customer data and the questions to tackle sounded something like: “What do we already know about our customers that can help us improve our logistics operations?” and “What else should we know about them?” Since applying customer data to improve your supply chain operation is still an undiscovered and underexplored field for many companies, expectations were high.
Meanwhile, in the Data2Move community…
Because we want to keep everyone well informed, we started the event with a short overview of what’s going on in the Data2Move community. We are proud to announce that we have ten ongoing student projects. Furthermore, the community has teamed up with ESCF to bring additional knowledge and unite forces to recruit the best students for our projects. In terms of partner collaborations, MMGuide, CTAC and TKT are setting up a first pilot and many more small scale collaborations are happing as we speak. And last but not least; we have five new partners: TLN, Evofenedex, RoyalHaskoning, DAF and RHI Magnesita. All are full ESCF members.
“Moving Consumer Goods, Not Vehicles”
The keynote of the day was in the capable hands of the newest Data2Move team member, Assistant Professor Virginie Lurkin (TU/e). Lurkin showed how both customers and suppliers can benefit from taking into account consumer behavior and preferences when it comes to the operational decision making. While most operational models focus on the ‘average’ customer, it is actually better to start celebrating the heterogeneity within your customer base. For example, it is important to realize that if the average service level is 97%, this does not mean that all of your customers have an equally high service level. Even more important, you should always ask yourself how high the service level for you most valuable customers is.
Lurkin showed that if you do not take into account this heterogeneity, it will surely result into more miles, more inventory, higher costs and, most importantly, disappointed customers. But if you do take into account customer behavior, these issues can be resolved.
Shaping Research Stories
After the keynote, it was time to hand over the stage to a selection of our most excellent students. During short presentations the students outlined their research projects which they are currently conducting at one of the Data2Move partner companies. Afterwards, there was time to actively brainstorm with the Data2Move partners that were present. The students got a chance to ask their advice, guidance and to pick their expert brains. These brainstorm sessions proved to be an excellent educational ‘win-win situation’ for both the students and the Data2Move partners. In the text blocs below, you will find short abstracts of all the research projects that were discussed.
|“The value of expiration date information for a grocery retailer” by Gijs Bastiaansen @ Jumbo
Gijs Bastiaansen’s project revolves around the expiration dates of products that customers need on a day-to-day basis: perishables. In his thesis, he tries to find out how to determine the percentage of customers that exhibit “grabbing” behavior; grabbing means that a customer does not bother to look at the expiration date, but just “grabs” whichever product is easiest to take. Although Gijs has access to some helpful data, there is no easy way to extract the desired numbers, as barcodes on perishables do not hold any information about expiration dates. As such, he is still looking for additional ways to support his assumptions. During the event he got helpful suggestions to do this.
|“Inventory optimization in a two-echelon supply chain” by Stan Brugmans @ Office Depot
Stan Brugmans is applying multi-echelon inventory theory to the internal supply chain of Office Depot. The supply chain within the scope of his project is the central distribution center and multiple local distribution centers. Office Depot is subject to a phenomenon that is typical for companies in locally controlled supply chains: the Bullwhip Effect. Stan explained that this effect causes small fluctuations in customer demand to result in highly variable demand at the start of the supply chain. The multi-echelon theory that he is applying focusses on product availability to customers and inventory cost reduction by integrally controlling the supply chain.
|“Forecasting tankcontainer and trucking capacity for an intermodal carrier” by Rijk van der Meulen @ H&S
Rijk van der Meulen is currently working on improving the container capacity planning at H&S. He is doing so by implementing statistical forecasting techniques. One of the key strengths of Rijk’s research is that he enhances these forecasts by taking into account that some information about future demand may already be available. By doing so, the main forecast error is reduced by almost 50%! He also found out that only two of the partners were using advance demand information in practice. Hopefully, his research triggers more Data2Move partners to improve their capacity planning by taking this information into account.
|“Determining the optimal rail fleet size and composition” by Bart Pierey @ Sabic
Bart Pierey recently started his research at SABIC. He focusses on determining the optimal size of the rail container fleet that SABIC uses to ship its products to its customers. Two important aspects are crucial in determining this optimum: if there are too little Rail Tank Containers (RTCs) available on-site, SABIC is forced to scale down production, while having too many RTCs on site results in SABIC having to use the capacity of its competitors; something that will be penalized in the near future. This research is an excellent example of a Data2Move project. Bart will use the vast amount of GPS tracker data that has been collected during the past two years to build a simulation model of the site.
Results from student projects
The follow-up to the brainstorm sessions also featured two of our most talented (ex)student members. In two plenary student presentations, Lisa van Lierop and Rolf van der Plas shared their Master thesis research.
First up was former Data2Move student-assistant Lisa van Lierop with an interesting presentation on multi-echelon inventory approach at Hilti. Lisa explained the basics, struggles and opportunities that come with swapping from a single-echelon to a multi-echelon inventory approach. She researched how integrally controlling your supply chain could lead to serious benefits such as higher revenue, better service levels and lower stocks.
During her presentation, the partners were asked to fill in a short survey about if they were using multi-echelon inventory management. If so, they were asked how they were using multi-echelon inventory management. Some important and interesting results emerged from this survey:
- Two participants stated that they use a multi-echelon approach and that it has led to improved service levels to their customers, as well as cost savings;
- Most of the partners would consider switching to multi-echelon inventory management if it at least could promise a reduction of 5% of physical stock;
- Participants estimated that multi-echelon inventory management would have the largest effect as a result of demand variability and holding costs.
The thesis is titled “Quantifying the benefits of a multi-echelon inventory approach”. As soon as this research is finalized, it will be made available to the community.
Next, Rolf van der Plas explained how Vendor Managed Inventory could help Heineken and its customers to achieve mutual benefits. If Heineken controls the inventory levels of their customers, this could result in lower transportation and inventory costs. At the same time this will lead to less stock outs which ultimately will result in happier customers! He supported his statements by showing the results of state-of-the-art simulation models that he has implemented at Heineken. The full thesis can be found here.
Exciting and promising results can really work up an appetite. So after a short wrap-up, everybody was allowed some time to process this new information while enjoying some bits and beverages!
On October the 29th we will celebrate our second year anniversary. Two years of Data2Move is an excellent reason to celebrate, reflect and to re-evaluate the topics that we have been working on. So make sure to save the date! If you have any suggestions for the program of the event, or topics that you would like the community to focus on, do not hesitate to send us an email!
For now, we look back at a very successful event. It was great to welcome so many new faces and partners and we hope to see you on the 29th of October!