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Physical Internet Initiative: Pipedream or possibility?

Some researchers are asking what the real world of distribution and logistics can learn from the digital world of the Internet.
By Bob Trebilcock, Executive Editor
March 01, 2012
Keep it moving Keeping product in motion is one of the biggest benefits of the Physical Internet. To illustrate his point, Montreuil describes the way a truckload of product moves from Quebec City to Los Angeles. In today’s world, it takes about 120 hours for a driver to pick up and deliver a load by truck. Like a marathon runner, the driver probably completes the trip alone. Meanwhile, the driver will be away from home for a week or more and may return empty for at least a portion of the trip back from Los Angeles. In the Physical Internet, the delivery process would resemble a relay race. Each driver would hand off a load at a transit hub every 250 miles. There, another driver would pick up the load within an hour or so and move it another 250 miles on its journey. Meanwhile, the original driver would pick up a back haul and return home in time for dinner. Or, the load may get shuttled onto and off of a multi-modal rail car. Instead of 120 hours, Montreuil calculates the delivery could be made in 60 hours. Similarly, LTL shipments could be reconfigured with other shipments at transit hubs to maximize trailer loads. Since all of the containers would be the same size, just like maritime containers in a port, the contents of a container would be irrelevant. Making this model work would rely on all of those components described earlier along with open and connected data collection and software systems. “Everything from the warehouse management system (WMS) to the routing, slotting and asset tracking systems will be open and connected, like the Internet,” says Montreuil. It also requires more collaboration than happens in the supply chain today. Pipedream or possibility? As the Physical Internet began to take shape, Montreuil shared the idea with colleagues at other institutions. “Ben had this epiphany that he’d talk about over dinner at CICHME meetings,” says Russell Meller, a professor at the University of Arkansas and the director of the Center for Excellence in Logistics and Distribution (CELDi) at the university. “He was the inspirational leader, but he also realized that he’d need other people and ideas to make it happen.” CELDi is a consortium of nine universities and 30 organizations funded by the National Science Foundation focused on research in logistics and distribution. Along with Meller, Montreuil recruited several other researchers here and abroad, including Kimberly Ellis, an associate professor and the site director for CELDi at Virginia Tech. To get the project off the ground, Meller says, they realized they would need grants. Meller and another researcher already had a nearly $200,000 grant from the National Science Foundation to develop a virtual organization using digital Internet technology that would allow engineers to work collaboratively on a big project. The catch: They needed a big project. The Physical Internet Initiative seemed to fit the bill. In addition, Meller and Ellis received a $197,000 grant from the National Science Foundation to use CELDi as a resource to take real world numbers from leading shippers like Wal-mart and Walgreens to establish the potential of the Physical Internet. That project is now underway. The CELDi team is taking real-world facilities, and network and shipping data to model how the supply chain is working now and how it might work in a Physical Internet with standardized containers and a sharing of trailers and other resources across a network of facilities. “We have weekly teleconferences with the participating organizations and they’re guiding us with the scenarios they want us to model and the questions they want to answer,” says Meller. Those include questions such as how much fuller would trailers be—how much air would be removed—using the Physical Internet model? Is there a negative impact from using standardized modular containers? Would the number of times a product is handled change as it moves through the system? If your shipments resemble a relay race, how quickly do you need to crossdock a container through a facility so that you don’t increase the amount of time for a shipment? While CELDi is answering those questions, Virginia Tech’s Ellis says the next step is to define what type of containers and materials handling systems are required for the Physical Internet. “What it might look like is an open question,” she says. “Ben certainly has ideas. We have submitted another research proposal that would allow us to work on the design of containers.” So, is the Physical Internet a pipedream or is it a possibility? According to Montreuil, the technology is “a piece of cake. There’s no science fiction and nothing to invent in terms of software and data collection.” He believes the companies within MHIA could come up with the handling innovations to make this happen very quickly. In Montreuil’s definition, quickly is about a decade. The real challenge, he says, is overcoming the reservation of businesses to collaborate with one another to make the Physical Internet work. “Companies will need to come up with new business models,” he says. The other challenge is convincing a group of shippers to do it now, rather than later. While it may take a decade to get a global Physical Internet up and running, Montreuil believes that a consortium of companies, or even an entire industry, could do it now. “I think the biggest hurdle is the reluctance of companies to do this until everything is in place to operate on a global scale,” he says. “I see it as something that can be phased in now and grow incrementally.” That could be the industry that is asking the question: Isn’t there a better way?

About the Author

Bob Trebilcock
Executive Editor

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. More recently, Trebilcock became editorial director of Supply Chain Management Review. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

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