/department of technology management

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Comparative logistics capabilities between Europe and Asia

Jan C. FransooTechnische Universiteit Eindhoven

/department of technology management

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Asia comparison

• learnings across developing regions: Chinese coastal zones with Central-Europe, Chinese inland zones with Eastern Europe, what are good policies for national/provincial governments to boost development

• role of industrial and logistics parksboth: governments as "client" or "problem-

owner" rather than industry as such• best practices of companies• study on ports with Chung-Yee Lee, HKUST

/department of technology management

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Supply Chain Management and the Transportation Infrastructure in Europe

Jan C. FransooTechnische Universiteit Eindhoven

/department of technology management

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Position of CE (not: CEE)?

• CE as a source• CE as a postponement center• CE as a market

in all scenarios: component sourcing from Far East

/department of technology management

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Transportation perspective in Europe

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European Commission (2001)

• White paper: European Transport Policy in 2010

• Congestion:– 10% of road network:

7,500 km– 20% of rail network:

16,000 km– Costs: 0.5% of GDP

(1.0% by 2010)– Forecast 50% increase

of goods traffic by road in 2010

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Use of transport modes (EU-15; Gtkm)

0

200

400

600

800

1000

1200

1400

Road Rail River Sea Pipeline

19802001

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Road

• Road carries 44% of freight• (and also 79% of passenger transport)• Each day 10 hectares are covered by road

infrastructure• Car fleet expands by 3 million cars every

year

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Rail

• From 1970 to 1998: from 21% to 8% freight marketshare

• Average speeds of international rail freight: 18km/h

• 600 km of track closed every year

• EU: investments to stimulate rail

• Industry: no confidence in rail (strikes, no single operator, unreliable, …)

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Water

• Growth in short sea shipping matches road growth– Administrative (customs)

difficulties largely resolved– Huge growth potential

• Inland waterways largely unused– 9% of freight in

Rhine/Main/Danube network– 1 barge = 110 trucks

• Slower modes require smarter networks: joint operations of sea and inland terminals

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Research questions & opportunities (1)

• Operation of joint terminals network as single virtual terminal– dynamic inventory positioning in network– inventory allocation and reallocation while in transit– queuing effects at terminals– service concepts

• How independent are SC structures from transportation infrastructures, or does road always provide the option to execute any sc structure? What about other sectors than electronics?

/department of technology management

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Research questions & opportunities (2)

• Industrial / logistics parks strategy strongly dependent on role:– source: manufacturing and capability driven, must

be reachable for components in efficient way, taxes; industrial parks and logistics parks can develop separately; example: Philips campus in Poland

– postponement center: closer to market, more supply chain / logistics driven, likely to be positioned aligned with terminals in network,; industrial parks (postponement center) and logistics parks aligned. Customization in Prague

– market: supply chain design very strongly based on transportation network and shifting center of gravity within Europe. Network role of Constanta – Vienna axis

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Research questions and opportunities (3)• your input