'Physical internet' would improve supply chain efficiency, says P&G

Will Green is news editor of Supply Management
14 November 2014

Supply chains could become more efficient and cost-effective if a “physical internet” was developed.

Huw Waters, supply chain director at Procter & Gamble, told a conference firms could share vehicles and distribution centres (DCs) to cut costs.

“Can you imagine a future where we could join up all the physical assets we have? If we could link DCs, trucks, [into] a fully integrated logistics network, using physical assets in a much more joined-up way?” he said.

“There’s been a lot of progress on supply chain efficiency but there’s still a lot of cost. There is a massive opportunity in terms of efficiency.”

Speaking at the IGD Supply Chain Summit in London, Waters said supply chain professionals were “masters of the universe”.

“In the last 20 years our supply chains have become much more complex. Over the last 15 years there has been a structural change in the cost basis of the industries we work in,” he said.

“Logistics is a far larger proportion of the product cost than it has ever been. A massive chunk of our overall costs is controlled by us. Costs are going up and we own a lot more of them.

“It’s easier to cut cost then grow revenue. We are going through a seismic change. Our role has never been more important.”

Waters said there was a lot of data around but it was important to use it to improve processes.

“We are almost overwhelmed by the amount of data,” he said. “My challenge is to sculpt that data into something beautiful, that we can meaningfully use to speed up the supply chain.”

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