Innovative vendor-managed inventory strategy exploiting interconnected logistics services in the Physical Internet

Abstract

International audienceTraditional supply chain networks are often designed in the interests of a company. Once the network has been defined, the storage and distribution of goods are usually fixed and restricted within the network. This is assumed to be an inherent limit of current inventory control research. Instead of specialised hierarchical storage networks, this paper proposes an innovative vendor-managed inventory strategy exploiting the Physical Internet (PI), which is an open, universal, interconnected logistics system. In such a system, facilities and means of transport are shared and can be allocated according to demands of users. As a result, the PI allows users to stock anywhere in the network and also provides open multisourcing options for orders with on-demand warehousing services within the PI. Inventory decisions can be made dynamically by each player to minimise networkwide inventory levels. A non-linear, simulation-based optimisation model was developed for the vendors’ inventory decision-making when confronted with stochastic demands. A metaheuristic using simulated annealing was applied to solve the problem, and then, the optimised inventory decisions were validated using simulation. The results suggest that the proposed PI inventory model can reduce the total logistics cost while maintaining a comparable or better level of end customers’ services

Multiagent Modelling and Simulation of a Physical Internet Enabled Rail-Road Intermodal Transport System

“…However, Sarraij et al [26] predicted that the fuel consumption savings would be 60%. Conversely, the logistics cost savings in this work are reasonable because Yang et al [29] reported that the reduction in logistics cost could be as large as 73%. The relatively larger cost savings achieved in Yang's work are attributed to a holistic optimisation experiment geared towards reducing global operational cost.…”

“…Furtado et al [25] modelled the transport activities of tractors and the consolidation of trailers into a road train, in which various demand scenarios were tested by using the physical internet philosophy. Other simulation studies focus on efficiency assessment [26], container repositioning strategy [27], and inventory controls [28,29].…”

“…Table 3 Economic indicators are computed and compared with previous studies. Studies conducted by Ballot et al [23], Sarraij et al [26], and Yang et al [29] are selected as a basis for conducting benchmark analyses. These works are identified because they also simulate the impacts of the physical internet on the logistics network based on scenario simulations, physical internet enabled and non-physical internet enabled.…”

Supply chain planning: a quantitative comparison between Lean and Info-Sharing models

“…SCP concerns inventory management and production control rules, and all decisions necessary for moving physical products and information along the SC (Wu, Yale, Xu, Chu, & Zhang, 2017). Several SCP models have been developed in order to improve performances in a supply chain (Yang, Pan, & Ballot, 2017), but the identification of the best approach is still an open issue (Holmström et al, 2016). In particular, many models have been built but few quantitative studies and less-structured comparisons between models are present in the literature (Smirnov & Gerchak, 2016).…”

The Role of Digital Connectivity in Supply Chain and Logistics Systems: A Proposed SIMPLE Framework

“…However, the existing literature on digital connectivity [1,3,[7][8][9] is scarce, especially in developing frameworks applicable in the logistics and SCM contexts [1]. That is, the unprecedented move in digital connectivity in the fields of logistics and SCM is yet to lure the interest of a significant number of scholars, as the related literature is still at its infancy stage, coupled with the inexistence of a framework that could help to better understand this technology, especially in the aforementioned specialized areas.…”