B o r d e r l e s s a m b i t i o n , i n s p i r at i o n a n d i d e a s

SCM
Ahold: several strategic partnerships and
alliances Quieter, cleaner, safer deliveries through
innovations PostNL: ‘It’s getting faster all the time’

The human planner still has the edge Oracle:

SUPPLY CHAIN customers have a growing need for cloud services

movement Logistics is still very people-driven’

Roundtable discussion
Q3 2015

www.supplychainmovement.com

group SCM
SUPPLY CHAIN of transport outsourcing
movement

Transparancy and
innovation in
logistics
 Roundtable

Discussion of transport outsourcing

Transparency and innovation

in Ahold’s logistics
‘The Champions League of transport’ is how Mark van der Drift describes delivering to stores in town
and city centres. As senior director of transport at Ahold, he is responsible for the retailer’s national and
international transport activities. Partners and strategic partnerships play a crucial role. During a Supply
Chain Media roundtable discussion, he explained Ahold’s philosophy behind the use of third parties: ‘The
transport company takes a business risk to achieve important innovations for the sector.’
By Marco van der Hoeven

S
upply Chain Media and Oracle
recently organised a roundtable
on logistics outsourcing. The topic
was discussed based on the independent
online self-assessment tool for logistics
outsourcing which has been developed
over the past two years by Nyenrode,
consultancy firm Districon, logistics ser-
vice provider DSV Solutions and Supply
Chain Media. After an explanation of
the model’s four archetypes for logistics
outsourcing Mark van der Drift, senior
director of transport at Ahold, described
how the multinational manages its col-
laboration with third parties. He indi-
cated that Ahold has a strategic alliance
S U P P LY C H A I N M O V E M E N T, Q 3 2 0 1 5
and international transport for those
companies, involving 25 different trans-
port firms. ‘We purposefully don’t have
our own transport for efficiency and flex-
ibility reasons,’ said Van der Drift. ‘We
work with external transport companies
who have their own vehicles and drivers.’
Smart innovations
Van der Drift explained that Ahold’s
transport is based on two pillars: trans-
parency in its collaboration with trans-
port companies, and a belief in smart
innovations to achieve more sustainable
and more efficient transport. ‘Because
we have so many city-zone locations
engine. ‘It’s the Champions League of
transport. A wide variety of factors are
involved, such as lack of space and rules
and regulations – both national and local
– relating to the environment and noise
pollution. That can be challenging,’ con-
tinued Van der Drift. ‘But the more diffi-
cult it is the more fun it is too, plus the
better we perform compared to our com-
petitors.’
One of the top priorities at the moment
is innovating in sustainability, and emis-
sion-free distribution to city zones is a
key topic. Because a hybrid truck can
complete the last mile without emis-
sions, the prototype enables Ahold to

with JF Hillebrand for sea freight, and
issues tenders for European road freight
in view of the fierce price competition
in that market. For national transport,
the collaboration is based on strategic
partnerships with transport companies
which offer flexibility and add value in
2 terms of quality on a daily basis.
Van der Drift is responsible for the trans-
port activities of Ahold’s subsidiaries
Albert Heijn, Etos and Gall&Gall. Every
day, 1,200 trucks visit 2,000 different
delivery addresses as part of the national
(Ahold has 80 stores in Amsterdam
alone, Ed.) we must innovate to achieve
quieter, cleaner, safer and more efficient
deliveries – partly because of governmen-
tal pressure (Green Deal 6) and partly
because of our responsibility to local res-
idents, who after all are also our custom-
ers. The shopper’s voice is more pow-
erful than any government regulation
could ever be.’
A quarter of those stores cannot be
accessed using standard vehicles,
namely an articulated lorry with a diesel
meet the Dutch government’s Green
Deal 6 criteria. However, such vehicles
also require investment from the trans-
port company. Van der Drift: ‘Together
with OEM (i.e. truck supplier) and our
transport company, we make sure that
the investment pays off from day one.
For us, that’s an important consideration
before launching any pilot scheme. Our
role is primarily to ensure the use (oper-
ating hours) of these innovations. After
all, that’s the only way to earn a return
on the high fixed costs of investment.’
 ‘Because we have so many city-zone locations we must innovate to
achieve quieter, cleaner, safer and more efficient deliveries’

Geanimeerde gesprekken tijdens de roundtable over logistieke

uitbesteding, georganiseerd door Supply Chain Magazine en Oracle.

Furthermore, he believes that the trans-
port company must be bold enough to
take a business risk in terms of pur-
chasing new vehicles for quieter, cleaner
and safer deliveries. Van der Drift: ‘That
results in a completely different kind of
collaborative relationship between Ahold
and the transport companies, possibly
with the additional involvement of third
Jan Huijgens, senior manager of logis-
tics at Starbucks, echoed that picture of
shouldering responsibility for the pro-
cess: ‘Although we outsource all our
logistics services, we remain ultimately
responsible for them as a logistics
department. The division of the supply
chain into various differentiated flows
has a clear effect on purchasing, because
integration with other transport flows.’
In the case of international transport,
Ahold has both strategic partnerships
and purely price-based ones. ‘Our inter-
national volumes are less dominant than
our national ones. We indicate what we
want and the international transporter is
then free to consolidate the cargo as nec-
essary. In contrast, we will never do that
S U P P LY C H A I N M O V E M E N T, Q 3 2 0 1 5

parties such as fuel suppliers and the
government.’
Another aspect of the collaboration is a
smart approach to consolidating ship-
ments – not only for the various Ahold
subsidiaries but also for other compa-
nies. Consignments of alcoholic drinks
for Gall & Gall and toothpaste for Etos,
for example, are already transported in
the same truck. ‘We also work together
with a distribution firm to include a third
flow of goods from outside of the Ahold
organisation.’
which part of the supply chain are you
going to organise in which way?’
Online
Fulfilling online orders present an extra
logistics challenge. Van der Drift: ‘We’re
currently working with our online col-
leagues and transport partners to see
how we can organise our online distri-
bution more efficiently in view of the
relatively high transport costs. Some of
the options we are considering include
increasing the use of trucks and potential
for our store distribution.’
Ben Dijkstra, project leader of process
design at PostNL, regards online orders
as producing very different volume fluc-
tuations than physical stores. When a
consumer ordering online indicates
their preferred delivery date/time, that
single click determines the shape of the 3
subsequent logistics process. ‘As a sup-
plier, you have no choice but to respond
to that. Furthermore, it’s getting faster all
the time. Whereas it used to be next-day
delivery for orders placed before 10 p.m.,
 ‘You might want to convert everything into bits and bytes
but a human planner still has the edge’
Mark van der Drift (Ahold): ‘Our international volumes are less
dominant than our national ones.’
the cut-off point has now shifted to mid-
night.’
A crucial step for Ahold in its collabora-
tion with transport companies has been
the move away from short-term con-
tracts in favour of annual agreements
and open-ended contracts. Van der Drift
praised the often long-standing collabo-
ration with transporters. ‘Quality is the
top priority for us, it’s the basis for fur-
ther volume growth. If the quality isn’t
up to scratch, we scale down the volume.’
Ahold does not expect transport compa-
nies to only make dedicated deliveries.
‘That’s a result of our demand for flexi-
bility. That has to come from somewhere,
such as by combining our flows with
other – preferably non-competitive – vol-
umes in the transport market.
Ahold transport
International National < 500 km
S U P P LY C H A I N M O V E M E N T, Q 3 2 0 1 5
DC
4 itive tasks which the planners don’t enjoy
Large for efficiency
An overview of the national and international transport flows of Ahold (Albert Heijn, Gall&Gall and Etos).
Sharing networks also enables us to
make serious savings in terms of empty
kilometres. Sharing really is a win-win
situation because you get a bigger slice of
the pie,’ continued Van der Drift. ‘How-
ever, it’s important to be transparent –
you mustn’t play games. It’s about more
than merely delivering on time; it’s also
about added value, and that’s changing
all the time. What works today could be
very ineffective tomorrow.’
Control of the reins
When it comes to planning Ahold con-
sciously keeps full control of the reins;
it outsources only the physical transport
activities to external partners. ‘We make
a new plan each week based on current
volumes, which would be impossible
without ICT. We analysed what we spend
the most money on and which is the
most dynamic part of our supply chain,
and that’s where we’ve started automat-
ing based on Oracle. We first set up the
finance processes and opted to make the
underlying infrastructure reliable. We’re
now working on transport planning
which is the most exciting aspect because
things change so rapidly, such as when
a store is being revamped or is open on
a Sunday, or in the case of promotional
campaigns. All of those factors affect the
logistics.’
Frank van der Voort, director of sales
consulting for supply chain solutions at
Oracle, added: ‘Automating the planning
for all the trucks and the optimal deploy-
ment of drivers requires intelligent algo-
City zone
Controlled
access
Limited
access
Zero
DC
DC
Small for city life quality
rithms with lots of computational power.
The aim is not only to optimise the plan
but also to provide optimal support to the
full execution of the transport activities
as well as the associated administrative
tasks.
Moreover, we want to make the relevant
information automatically available for
all the relevant people in the chain, from
customers to suppliers. Compared with
a number of years ago, we’re now seeing
a clear trend among shippers who want
greater control and influence over their
outsourced logistics. We’re also seeing a
growing need among our customers for
cloud services, and in the past year we’ve
also released our best-of-breed TMS sys-
tem OTM in the cloud, for example. That
system gets clients operational much
faster while offering lower operating
costs.’
According to Ben Dijkstra, however,
an experienced planner is still better
than software. ‘You might want to con-
vert everything into bits and bytes but a
human planner still has the edge. We’re
now seeing two types of planners: those
educated to vocational level who have
diesel in their blood, although they are
on the decline, and those educated to
degree level and higher who take a more
abstract approach and enjoy solving com-
plex problems.’
Van der Drift believes that suppliers ben-
efit from automation. ‘They suddenly
notice that countless administrative tasks
no longer need to be done, for instance.
We’ve always had volume fluctuations
but thanks to automation our partners
are now in a much better position to
adapt to them.’
He emphasised that automation is only
partly about technology. ‘When imple-
menting software, 90 percent of my time
is taken up with people – because they
will ‘make’ or ‘break’ the implementa-
tion. The software largely replaces repet-
anyhow since they prefer to be solving
complex problems. So the planners han-
dle the last phase, once the software has
done its work. Logistics is still very peo-
ple-driven.’
 20 of the 20
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