Demonstration Project: Sense and Response in Distribution of High-Sensitive Products

Dinalog Demonstration Project

Sense & Response in distribution of high-sensitive products

Improving Quality, Security, Efficiency and Resiliency

Project Plan

May 2011 Demonstration Project: Sense and Response in distribution of high-sensitive products

2 Demonstration Project: Sense and Response in distribution of high-sensitive products

Table of Contents

Summary...... 3 A. Orientation and Project Goals...... 4 Motivation...... 4 Relation to Dinalog´s innovation themes...... 5 Objectives and goals...... 5 Expected results...... 6 Relation to government policy...... 7 Orientation...... 8 B. Activities and Work Packages...... 9 Phase 1: Demonstrate state-of-the-art...... 10 Phase 2: Define and pilot supply chain control concepts...... 12 Phase 3: Evaluate and disseminate...... 14 Planning...... 15 C. Consortium and Project Organization...... 16 Project Team...... 16 Third-party suppliers...... 17 Project organization...... 18 D. Evaluation and Monitoring...... 19 E. Valorization, demonstration & dissemination strategy...... 20 Valorization and knowledge dissemination...... 20 Demonstration...... 21 Implementation...... 21 References...... 22

Summary

Motivation This project will focus on the global distribution of high-sensitive products, initially targeting important issues faced by the logistics industry related to temperature-controlled pharmaceutical shipments: o Limited capability to detect and respond in real-time to critical disruptions; o Inefficient supply chain execution; o Increasing governmental quality and security regulations; o Limited information sharing and coordination between supply chain participants. These issues will be addressed by Panalpina, AirFrance KLM Cargo and Nycomed by exploring new concepts for cross chain information sharing and coordination, supported by scientific research and innovative real-time monitoring technologies. This topic is particularly urgent at this moment as the amount of international temperature-sensitive shipments continues to grow rapidly.

Activities The project will consist of three phases: 1. Demonstration of state-of-the-art: including pilots with Panalpina, Nycomed, and AirFranceKLM to determine priorities and requirements from the logistics industry. 2. Define and pilot supply chain control: including the development of a framework for joint control and different technology prototypes, followed by demonstrations in the high-tech and pharmaceutical supply chain. 3. Evaluate and disseminate: including the evaluation of the business value of the demonstrated concepts, as well as various dissemination activities.

Expected results The demonstrated ‘sense and response’ concepts are expected to result in measurable improvements in supply chain quality, security, efficiency and resiliency. This will have many positive implications:  Logistics service providers will move the demonstrated pilots into broader implementations, including the development of value-added services for cross chain control.  Technology and solution providers in this project are expected to develop new products based on the prototypes for this project. This will lead to significant new business activity at the Dinalog Campus. Our analysis shows a potential annual market for these new services of about 100-150 Million Euro in the pharmaceutical supply chain alone. These results show that this project can make a significant contribution to Dinalog’s long-term economic goals and can strengthen the competitive position of the Netherlands towards other countries that invest in smart sensor technologies, such as Germany.

Innovativeness The concept of ‘sense and response’ mechanisms based on smart sensor technologies is getting significant industry attention. Logistics service providers such as Fedex, DHL, and DB Schenker are developing various real-time monitoring solutions, and countries such as Germany are funding major research initiatives.

Our project is set apart from these initiatives by our focus on inter-organizational information sharing, decision making and coordination (e.g. shipper, forwarder, carrier, handing agent). This makes our project more aligned with the vision for cross chain control centers.

Valorization, demonstration and dissemination The valorization and dissemination of this project is primarily focused on developing new business and demonstration activities at the Dinalog Campus, for example with a demonstrator in LogiXperience. Valorization of the research activities will be conducted through graduate internships (Master thesis

4 Demonstration Project: Sense and Response in distribution of high-sensitive products students) at AirFrance KLM Cargo and Panalpina. Specific attention for dissemination will be given to service logistics, as the technologies developed in this project are also highly relevant in this area.

A. Orientation and Project Goals

Motivation This project will explore and develop innovative ‘sense and response’ concepts for supply chain control in the global distribution of high-sensitive products. In the transportation of high-tech and pharmaceutical products, the ability to avoid or quickly respond to disruptions is critical. In this project Panalpina (forwarder), AirFrance KLM Cargo (air carrier) and Nycomed (pharmaceutical shipper) will demonstrate concepts that increase the capabilities for pro-active intervention and cross chain control, supported by scientific research and innovative real-time monitoring technologies. This is expected to result in measurable improvements in supply chain security, quality, efficiency and resiliency.

We will initially focus on the global distribution of temperature-controlled pharmaceutical products, which is referred to as ‘cold chain’. Logistics companies in this market are faced with important issues: o Limited capability to detect and respond critical disruptions such as temperature excursions, as traditional solutions like data loggers only provide information in hindsight. o Inefficient supply chain execution, with significant time spent to analyze disruptions in historical shipments. Industry experience shows that about 10%-20% of international temperature-shipments experience some temperature deviations and require additional analysis. o Limited information sharing and coordination between supply chain participants, making it very difficult to analyze end-to-end information about a shipment, or to respond in real-time to exception situations.

In this project we will address these issues through new concepts for cross chain information sharing, decision making and coordination, supported by innovative tools for real-time visibility. This topic is particularly urgent at this moment as the amount of international temperature-sensitive shipments is growing significantly. The total value of these shipments has grown to €246 billion in 2011, a growth of 27% compared to 2008 [1]. This market will further grow in the near future, due to the pipeline of temperature-sensitive biotech products and growth in emerging markets.

Shippers look to third-party logistics service providers (3PL’s) to take the lead in the coordination of activities in this supply chain [2]. In response to this need, Panalpina is one of the companies that have started the development of a control center for pharmaceutical transportation. In 2010 the company started to collect (near) real-time temperature information through the application of smart sensors on pharmaceutical shipments. This information is centrally stored in data centers in the Netherlands and used for event management and process improvements.

The initial deployment has proven the value of real-time monitoring in pharmaceutical transportation, but has also identified important limitations and areas for further development, particularly for supply chain control and optimization. At the same time, other companies have identified a need to explore improved supply chain control, such as Nycomed and AirFrance KLM Cargo.

In this project, these companies will jointly explore and demonstrate ‘sense and response’ concepts across different modalities (road, air, ocean), focused on the pharmaceutical and high-tech supply chain. The results are expected to be highly relevant to the development of cross chain control centers in these high-sensitive supply chains, but also provide key insights for other vertical markets and service logistics.

Relation to Dinalog´s innovation themes

Dinalog’s ambition for the Netherlands is to have a leading position in setting up and securing cross chain control centers (4-C). In this project, logistics service providers Panalpina and AirFrance KLM Cargo will work with shippers such as Pfizer and Roche to explore and demonstrate ‘sense and response’ concepts for international transport of high-sensitive products. This is expected to result in new value-added services related to cross chain control. In addition, pharmaceutical manufacturer Nycomed will explore the potential value of real-time monitoring in their internal supply chain. With these activities this project directly supports Dinalog’s innovation theme for Cross Chain Control Centers.

Although the primary focus on this demonstration project is related to 4-C, the underlying technologies and concepts may also be applicable for service logistics. Real-time remote monitoring based on wireless sensor networks and machine-to-machine communication also support remote diagnostics and monitoring. This may be used for the optimization of planning and control of service engineers and repair shops. This relation to service logistics will be further explored as part of the valorization and dissemination of this project.

Objectives and goals The main objectives for this project are to:

- Develop and demonstrate concepts and value-added services related to supply chain control in international multi-modal transportation for high-sensitive products. These concepts will be demonstrated and implemented by logistics service providers and shippers.

- Develop the underlying techniques and tools for real-time monitoring that provide the visibility required for joint supply chain control and ‘sense and response’ mechanisms. This will require the removal of current constraints, such as costs, standardization, reliability and regulatory approvals.

- Specify the business value of these ‘sense and response’ concepts in the global high-tech and pharmaceutical supply chain, specifically in the following areas: o Development of value-added service by logistics service providers, resulting in additional revenue streams. o Improvement in supply chain security, resulting in a reduction in theft and counterfeiting. o Improvement is quality control, resulting in a reduction of losses in the supply chain and increase in on-time deliveries. o Improvement in efficiency, resulting in improved allocation of human resources. o Improvement in resiliency, resulting in improved capabilities to respond to supply chain disruptions.

- Disseminate the results to the logistics industry, particularly related to shippers and knowledge institutes for additional research and development.

Expected results

The pilots and demonstrations in this project are expected to result in measureable improvents in supply chain quality, security, efficiency and resiliency. The proven business value is expected to lead to important follow-up activities, divided in the project partners and the contribution to economic goals.

Industry partners For the industry partners the pilots are expected to lead to broader implementations within their organizations, and the development of value-added services related to cross chain control in the global distibution of high-sensitive products. This supports Panalpina and AirFrance KLM Cargo to strengthen their market position. Panalpina may decide to locate staff for a cold chain control center to the Netherlands. Overall, it is expected to lead to additional developments in the area of cross chain control centers in The Netherlands.

These value-added services may lead to substantial business volume for the logistics industry. Just for the pharmaceutical supply chain to the total logistics costs in 2008 were $43 billion, of which $5.2 billion, was devoted to temperature-controlled shipping. This value is expected to grow to $6.6 billion in 2011 [1]. Assuming that 2-3% of logistics costs are spent on monitoring and control activities, this indicates a market of approximately $120-180 Million (100-150 Million euro) for these value-added services. It is fair to assume that similar investments will be made in ‘sense and response’ solutions for other high-value supply chains, such as high-tech and chemical.

Technology and solution providers For the technology and solution providers the project is expected to result in hardware and software prototypes and feasibility analysis for products and services that can be commercialized in the future. These services are directly related to the 4-C concept . This may lead to significant additional business activity at the Dinalog Campus, as these products and services will be offered to a global customer base. It is expectd that new companies will be founded based on the outcomes of this project.

Economic impact

With these results, it is clear that this project can make a significant contribution to Dinalog’s long-term economic goals. The trend toward ‘intelligent cargo’ based on smart sensors and real-time monitoring is expected to a have significant impact on the logistics industry, also beyond the pharmaceutical and high- tech supply chain. With this project The Netherlands will strengthen its competitive position towards other countries that are investing signficant resources in this area, such as Germany.

Relation to government policy

The global transportation of high-sensitive products is faced with increasing governmental regulations related to quality monitoring of pharmaceuticals and security regulations related to theft, counterfeiting and terrorist threats. Many international governmental policies are becoming stricter. As a result, the logistics industry is increasingly challenged to meet these new regulations. This makes this project highly relevant, as it develops efficient solutions for logistics service providers to address these regulations.

The transportation of pharmaceutical products is regulated by international regulations which are known as Good Distribution Practices (GDP). Many countries are currently developing stricter regulations for storage and distribution of pharmaceutical products. Real-time monitoring technologies and software tools developed in this project may lead to new services from logistics service providers in this area.

Regarding security, particularly the American government in imposing stricter regulations on screening incoming air freight shipments. Traditional screening methods are inadequate. This can be addressed with innovative solutions such as the CargoBox, which will be piloted in this project.

Orientation

The concept of ‘sense and response’ mechanisms based on smart sensors and real-time monitoring is getting significant attention from the industry and research community, in many cases related to the distribution of sensitive products in the pharmaceutical and food supply chain. For example, the German government is funding ambitious research initiatives in this area, such as the Intelligent Container Project and DyCoNet.

Some examples from recent commercial initiatives by logistics service providers include the Fedex Senseaware proposition (based on a GPS/GPRS data logger), DHL SmartSensor proposition (based on passive RFID sensors), and DB Schenker SmartBox (for ocean freight shipments). An example of a more scientific initiative is the Intelligent Container project in Germany. This project, led by the University of Bremen, recently received funding from the German government to further develop logistics concepts and technology solutions for real-time monitoring and distributed control in logistics. Another project funded by the German government is DyCoNet, with participants like Fraunhofer Institute and Lufthansa Cargo. This project is focused on intelligent air containers and related concepts such as autonomous control based on multi-agent systems.

Our project is set apart from these commercial and scientific initiatives by our focus on inter- organizational information sharing, decision making and coordination (e.g. shipper, forwarder, carrier, ground handing agent). This makes our project more aligned with the vision for cross chain control centers.

We will also develop technologies for real-time monitoring that are autonomous and cargo-centric, i.e. require no installation of equipment in vehicles or containers. Our experience has shown that the installation of communication equipment can be a major inhibitor for the application of real-time monitoring solutions by shippers and forwarders.

In addition, we take a more holistic and integrated approach in other areas: o Integration of supply chain control across modalities (road, air and ocean) - instead of focusing on a single modality. o Integration and combination of different technology and packaging solutions, including (active) RFID, GPS, GPRS and satellite communication - instead of a focus on a single technology. o Integration of planning and scheduling applications with real-time monitoring to develop ‘sense and response’ concepts – instead of focusing only on real-time monitoring. In this area we will build on previous research conducted in the Netherlands, for example in the field of prognostic logistics (PILOT project as part of Transumo).

B. Activities and Work Packages

The project consist of three distinct phases:

Phase 1: Demonstrate state-of-the-art. We will start of a number of short-term pilots using the current state-of-the-art solutions for real-time monitoring and information sharing, using GPS/GPRS and wireless sensor networking products. These pilots will provide additional input and requirements for the following phase.

Phase 2: Define and pilot supply chain control. In this phase we will develop a framework for joint control and coordination, and pilot innovative concepts and prototypes across modalities (ocean, air, and road) in the high-tech and pharmaceutical supply chain.

Phase 3: Evaluate and disseminate. In this phase we will conduct scientific research into the business value and feasibility for improved information-sharing, decision making and coordination. This will be conducted based on the results from the previous phase. In addition, we will conduct specific dissemination activities.

Phase 1: Goal: Demonstrate Demonstrate current state-of-the-art control centers and real-time information sharing state-of-the- in various settings (shipper, freight forwarder, air carrier) and provide input and art. requirements for Phase 2. Duration: Activity 1.1: Nycomed pilot: cold chain control center in internal supply chain 5 months Activity 1.2: Panalpina pilot: real-time information sharing in global transportation Activity 1.3: Air France KLM Cargo: Proof of Concept by air carrier Phase 2: Define and Goal: pilot supply Define, develop and pilot innovative concepts for supply chain control. chain control Activity 2.1: Development of framework for joint control and coordination.

Duration: Activity 2.2: Prototypes for real-time monitoring with ocean and road. 9 months Activity 2.3: Supply chain control in high-tech supply chain Activity 2.4: Integrated supply chain pilot in pharmaceutical supply chain

Phase 3: Goal: Evaluate and Evaluation of business value and dissemination of experience. disseminate Activity 3.1: Evaluation of business value Activity 3.2: Demonstration and dissemination

Phase 1: Demonstrate state-of-the-art

Activity 1.1: Nycomed pilot: cold chain control center at a pharmaceutical shipper Description: Nycomed - a Swiss-based pharmaceutical manufacturer - recognizes the increased need for cold chain monitoring and aims to explore the business value of real-time monitoring in its internal supply chain. We will conduct a pilot on temperature-sensitive shipments between warehouses in Roskilde (Denmark) and Brussels (Belgium). Planning: Start: June 2011 End: September 2011 Work distribution:  Work package leader: Nycomed. Nycomed will install active RFID networks in warehouses in Roskilde (Denmark) and Brussels (Belgium). Shipments between these locations will be equipped with wireless data loggers and a GPS/GPRS logger (in addition to traditional data loggers). QA staff from Nycomed will monitor the shipments.  Solution providers: o Antaris Solutions: SmartView web-application and support activities. o 4TS Oy: dSeal GPS/GPRS data logger o Ambient Systems: Series 3000 wireless sensor networks Expected results/deliverables/milestones: - Evaluation of economic and technical feasibility and business value of ‘sense and response’ concept for an international pharmaceutical shipper. - Organizational and IT requirements for joint supply chain control.

Activity 1.2: Panalpina pilot: real-time information sharing in a cold chain control center Description: Panalpina has started to collect real-time wireless sensor information on a number of international trade lanes for pharmaceutical shipments. As part of the next phase in this development Panalpina will conduct a pilot in which real-time temperature information on international shipments is shared with a major pharmaceutical shipper. Planning: Start: July 2011 End: November 2011 Work distribution: - Work package leader: Panalpina. Panalpina will extend the current software application with capabilities for secure data sharing with a major shipper on shipments between Europe and United States. - Solution provider: o Antaris Solutions: SmartView web-application, operational support and software development. Antaris will work with the following third-party suppliers: . Infodation: will conduct software development activities. . Ovis Telematics: will provide network installation and management. . Oxilion: will provide data hosting services to Antaris. o 4TS Oy: dSeal GPS/GPRS data logger o Ambient Systems: Series 3000 wireless sensor networks Expected results/deliverables/milestones: - Evaluation of inter-organizational information sharing between freight forwarder and international pharmaceutical shipper. - Organizational and IT requirements for joint supply chain control. 12 Demonstration Project: Sense and Response in distribution of high-sensitive products

Activity 1.3: AirFrance KLM Cargo: Proof of Concept by air carrier Description: AirFrance KLM Cargo is a leading air carrier in global pharmaceutical shipments. In this activity, AirFrance KLM Cargo intends to conduct a Proof of Concept as part of a Master graduation internship. The Proof of Concept will evaluate active RFID and semi-passive RFID solutions for on-line tracking of pharmaceutical shipments . The Proof of Concept will include a practical test at KLM’s facility at Schiphol Airport of both technologies. An evaluation will be made on the technical and organizational feasibility of both products (e.g. placing and removal of RFID tags on shipments, reading out sensor measurements, impact on current operational processes) Planning: Start: September 2011 End: December 2011 Work distribution:  AirFrance KLM Cargo will support graduate student  Antaris Solutions: SmartView web-application, and support of graduate student  Universiteit Twente: support of graduate student  Technology providers: o Ambient Systems: Series 3000 active RFID Evaluation Kit. o CAEN RFID: semi-passive RFID Evaluation Kit. Expected results/deliverables/milestones: - Proof of Concept for on-line tracking of pharmaceutical shipments and pro-active intervention. - Evaluation of economic and technical feasibility and business value of ‘sense and response’ concept for air carrier. - Organizational and IT requirements

Phase 2: Define and pilot supply chain control concepts

Activity 2.1: Development of framework for joint control and coordination. Description: Based on the results from Phase 1, scientific research will be conducted on the development of a framework for joint information sharing and coordination. Particular focus will be given to the use of real- time information for joint decision making and coordination. This is expected to improve the capability for pro-active intervention in case of disruptions. The research will be performed by a Master thesis student. Planning: Start: September 2011 End: January 2012 Work distribution: - Work package leader: Twente University. - Input and support will be provided by Panalpina, AirFrance KLM Cargo and Nycomed.

Expected results/deliverables/milestones: - Master thesis documents with framework for joint control and coordination.

Activity 2.2: Prototypes for real-time monitoring with ocean and road transports. Description: This work package will develop hardware and software prototypes for real-time monitoring during ocean and road transportation. The technology prototypes will remove specific constraints with existing solutions, such as costs, power supply, reliability and installation requirements. The prototypes under development will be autonomous and cargo-centric, i.e. travel with the shipments without the need for any installation of communication devices in vehicles or containers. For road transport a prototype will be developed for a device that integrates GPS/GPRS with RFID combination in a small, battery-powered device. For ocean freight we will develop a prototype of a device that combines GPRS and satellite communication. The prototypes will be integrated with a software application for event management. Planning: Start: October 2011 End: April 2012 Work distribution: - Work package leader: 4TS Oy. 4TS will lead the development of autonomous devices for real-time monitoring during ocean freight shipments, as well as road transport. - Technology providers: o Ambient Systems: Series 3000 wireless sensor networks, to be integrated with dSeal device. o Antaris Solutions: SmartView web-application, operational support and software development Expected results/deliverables/milestones: - Prototype of autonomous device for in-transit monitoring for road transport. - Prototype of autonomous device for in-transit monitoring for ocean freight.

Activity 2.3: Supply chain control in high-tech supply chain Description: This work package will pilot and demonstrate the use of a highly innovative solution that includes an intelligent air cargo container and shipping control system. This solution will be tested by Panalpina on an integrated road-air trade lane for high-tech shipments between Europe and United States. After the pilot the economic value and technical feasibility will be evaluated. Planning: Start: November 2011 End: March 2012 Work distribution: - Work package leader: Panalpina. Panalpina will conduct the pilot on an integrated road-air trade lane for high-tech shipments. - Solution providers: o CargoBox B.V. will provide the innovative air container with e-seal and GPS/GPRS monitoring.

Expected results/deliverables/milestones: - Successful pilot of intelligent air cargo container. - Evaluation of business value and technical and organizational feasibility.

Activity 2.4: : Integrated supply chain control pilot in pharmaceutical supply chain Description: This work package will provide an integrated pilot for supply chain control that builds on the previous activities. The framework developed in Activity 2.1 will be applied, and implemented through integration of the event management software application with existing logistics planning and scheduling systems at Panalpina. The hardware prototypes developed in Activity 2.2 will be used in this pilot, and potentially also the intelligent airfreight container that was piloted in Activity 2.3. This is expected to lead to improved decision making and information sharing with supply chain partners. Planning: Start: March 2012 End: September 2012 Work distribution: - Work package leader: Panalpina. Panalpina will provide specification on software integration and architecture. Panalpina will also manage the pilot across road, air and ocean shipments. - Solution providers: o Antaris Solutions will lead the software integration from the side of the event management application and also provide support services to the pilot. Antaris will work with the following third-party suppliers: . Infodation: will conduct software development activities. . Ovis Telematics: will provide network installation and management. . Oxilion: will provide data hosting services to Antaris. o 4TS Oy: provide hardware prototypes developed in Activity 2.2 Expected results/deliverables/milestones: - Software integration between event management software and planning systems. - Evaluation of business value and technical feasibility.

Phase 3: Evaluate and disseminate

Activity 3.1: Evaluation of business value Description: This work package will include scientific research by two Masters graduation internships on the business value of the pilots and prototypes that were developed in the previous phase. This will include cost and benefit analysis for different supply chain participants, including quantitative financial analysis, as well as qualitative analysis (organizational considerations, deployment obstacles such as standardization etc). Based on this analysis, recommendations will be formulated for different supply chain stakeholders. Planning: Start: June 2012 End: November 2012 Work distribution: - Work package leader: Twente University. - Input and support will be provided by Panalpina, AirFrance KLM Cargo and Nycomed, as well Antaris Solutions B.V.

Expected results/deliverables/milestones: - Business case analysis of demonstrated solutions, with quantitative and qualitative analysis. - Recommendations for different supply chain stakeholders.

Activity 3.2: Dissemination Description: Dissemination of the project results will be an on-going activity through a range of activities. We will set- up a project web-site with public information about the project. In the future this may also include business case tools. We also plan to participate at the Logixperience demonstration environment at the Dinalog Campus. Furthermore, we will organize events and seminars, for example with ACN (Air Cargo Netherlands). Planning: Start: September 2011 End: October 2012 Work distribution: - Work package leader: Antaris Solutions B.V. - Third-party suppliers: o Logixperience (demonstration environment at Dinalog Campus) o On-line marketing agency (web-site design and development) o ACN (Air Cargo Nederland)

Expected results/deliverables/milestones: - Project web-site - Demonstration at Logixperience

Planning

The following diagram illustrates the planning for this project:

C. Consortium and Project Organization

Project Team

Partner’s name Role and input Specific competence

Panalpina Air & Ocean: Project leader and leader of Mr. Daniel Lutz – Head of various demonstration work Operations. Freight forwarder packages . Will involve its Mr. Paul Fairclough – Head of pharmaceutical customers. Industry Vertical Healthcare Nycomed: Pharmaceutical manufacturer. Mr Niko Peltola – Supply Chain Will provide shipper’s Shipper’s perspective. Manager Global Supply Chain perspective. Will conduct Proof of Concept. AirFrance KLM Cargo: Will provide perspective from air Air carrier Mr. Jan Vreeburg carrier. Web-based software that Provide web-based application Antaris Solutions B.V: implements ‘sense and response’ and support services. Mr. Eelco de Jong – Managing mechanisms, based on Will also serve as project Director integration with various real-time applicant. monitoring solutions. Lead research activities related University of Twente: to the joint control and Leading research institute. Prof.dr. Jos van Hillegersberg coordination in international transportation. Provider of dynamic wireless Ambient Systems B.V: sensor network which provide a Real-time monitoring based on Mr. Mark Bijl – Senior Technical key mechanism for real-time wireless sensor networking. Consultant monitoring. Provider of innovative intelligent CargoBox B.V. air freight container that helps to Integrated approach for air Mr. Henk Hilders – Managing improve efficiency and security freight transportation Director in air transport of high-sensitive products. Provider of monitoring and localization products based on 4TS Corporation Oy: Real-time monitoring based on GPS/GPRS communication which Mr. Antti Kaihoovara– CEO GPS/GPRS technologies. provide a key mechanism for real-time monitoring

Third-party suppliers

Name Role and input Specific competence

Software development service Infodation for web-based application that Software development will be used for various pilots. Support services to the various pilots, including hardware Support services for real-time Ovis Telematics B.V. configuration, network monitoring technologies. installation, remote network management Data hosting for web-based Oxilion B.V. application that will be used for Web-hosting services various pilots. Support financial administration Van Asselt Accountants Accountancy services of the project Web-site development for On-line marketing agency project web-site

Project organization

The project organization of the project is adapted to the structure of the project, taking care of the project size and management efficiency. The management structure, as presented in figure below includes:  Project Management realized by the Project Leader, and supported by the Project Administrator.  The Steering Committee (SC), as the strategic decision-making body of the group.  The Work Package Leaders (WPL), in charge of managing all day-to-day project work.

The Steering Committee shall be responsible for the strategic direction of the project, in order to ensure the project meets the requirements. In addition, the Steering Committee will be responsible for the resolution of any conflicts, which cannot be agreed on the other project management levels.

The Steering Committee will consist of: - Panalpina: Mr. Daniel Lutz - AirFrance KLM: Mr. Jan Vreeburg - Nycomed: Mr. Niko Peltola - Antaris Solutions: Mr. Eelco de Jong - University of Twente: Prof. dr. Jos van Hillegersberg - Antaris Solutions: Mr. Mark Bijl - 4TS Corporation Oy: Mr. Antti Kaihoovara - CargoBox: Mr. Henk Hilders

Mr. Paul Fairclough from Panalpina will act as Project Leader for this project, supported by Mr. Eelco de Jong from Antaris Solutions as Project Administrator. They will be responsible for technical, legal, contractual, and financial management of the project. In addition, they are responsible for the quality assurance management.

D. Evaluation and Monitoring

Evaluation of the project during the project will be conducted at the Project and at the Activity Level.

Activity Level:

Each Activity that involves development of prototypes or demonstration in a practical setting, will be evaluated. It is the responsibility of the Work Package Leader to provide this evaluation report, based on a fixed template. The evaluation will be against the objectives for the activity, and includes the following elements: - degree to which new concepts were actually achieved; - unforeseen issues or obstacles that were encountered ; - degree to which the new concept created business value; - recommendations for next steps or further improvements.

Project Level:

For the project, the Project Leader will make a quarterly evaluation. This evaluation is used to monitor progress against the project planning, but also to evaluate the project against the set objectives. The input for the quarterly evaluation will be based on the input from the evaluation of each Activity. The quarterly evaluation will be used by Steering Committee as input for potential adjustments in the project planning or scope.

In addition, we will conduct Activity 3.1 to evaluate the business value of the concepts that were explored and demonstrated in this project. This activity will be performed by two Master graduate internships. The evaluation will include a cost and benefit analysis for different supply chain participants, including quantitative financial analysis, as well as qualitative analysis (organizational considerations, deployment obstacles such as standardization etc). Based on this analysis, recommendations will be formulated for different supply chain stakeholders.

E. Valorization, demonstration & dissemination strategy

Valorization and knowledge dissemination

The valorization of this project is primarily focused on developing new business and demonstration activities at the Dinalog Campus. This will start at the beginning of the project by using the Dinalog Campus as our project location, for example to conduct workshops with industry participants. Furthermore, we plan to locate the operational activities at the Dinalog Campus.

Within the next five years the valorization activities are expected to result in significant new business activities for ICT solution providers, for example related to advanced software systems, data hosting and hardware devices. We also expect additional staffing from international logistics service providers at the Dinalog Campus (specifically global freight forwarders and 3PL’s).

Valorization of the research activities will be conducted through various graduate internships (Master thesis students) at the participating industry companies (Panalpina and AirFrance KLM Cargo). This will benefit valorization and also provide short-term benefits to the participating industry companies.

Knowledge dissemination will be achieved through a specific project web site. The web site will include project information, presentations, articles, business cases etc. We have included a budget of 2000 euro to develop this web site.

Furthermore, we will provide business cases for education and training, as well as lectures, seminars and publications in professional and business journals. We plan to work with ACN (Air Cargo Netherlands) on dissemination activities, for example through a seminar for the logistics industry.

In the dissemination activities, specific attention will be given to the area of service logistics. While the primary focus of this project is on concept of cross chain control, the results may also be relevant in the area of service logistics. Real-time remote monitoring based on wireless sensor networks and machine- to-machine communication are also applicable in remote diagnostics and monitoring. This may be used for the optimization of planning and control of service engineers and repair shops.

Through the various dissemination activities we plan to reach the majority of relevant stakeholders in the logistics industry in the Netherlands.

Demonstration

Additional dissemination and demonstration are activities are planned through active participation at the LogiXperience demonstration environment at the Dinalog Campus. The Logixperience set-up is related to a concept for the high-tech supply chain (L-Pad) , and therefore very well suited to the prototypes developed in this project. The participation in LogiXperience will require a financial investment, as well as an investment in time.

It is expected that the LogiXperience will be visited by hundreds of visitors from the logistics industry in 2012.

Implementation Further implementation is the primary responsibility of the industry participants (Nycomed, Panalpina and AirFrance KLM Cargo). It is expected that the results of this project will lead to broader implementations within their organization, and the development of new value-added services.

In addition, the technology and solution providers are expected to further develop the prototypes developed for this project. This may require additional investments and lead to significant new business activities. However, it is difficult to quantify these elements at this stage.

References

1. Biopharma Cold Chain Sourcebook 2010,”, Pharmaceutical Commerce, 2010

2. 15th Annual Third-Party Logistics Study (2010), Capgemini Consulting and Georgia Institute of Technology.

3. Butner, K.(2010) The smarter supply chain of the future, Strategy and Leadership, 38 (1), pp. 22- 31.

4. Decker, C., Berchtold, M., Chaves, L.W.F., Beigl, M., Roehr, D., Riedel, T., Beuster, M., Herzog, T., Herzig, D. (2008), Cost-benefit model for smart items in the supply chain, Lecture Notes in Computer Science, 4952 LNCS, pp. 155-172

5. Hsueh, C.-F., Chang, M.-S. (2010), A Model for Intelligent Transportation of Perishable Products, International Journal of Intelligent Transportation Systems Research