CORE - Tackling Brexit Uncertainty

Executive Summary

  • CORE is a 50 million euro initiative, coordinated by the European Shippers Council, and involving over 70 partners from Europe and the USA.
  • MJC² has developed software tools to help shippers and logistics operators plan for disaster scenarios and disruptive events in the supply chain, optimizing contingency plans and resilience strategies.
  • Furthermore CORE provides real-time logistics scheduling systems to allow faster, more efficient response to actual events should they occur.
  • CORE was started before the Brexit referendum even occurred, but in fact the tools deal with many of the Brexit issues that many people are worried about: congestion in ports, blocked trade lanes/routes, uncertainty in lead times, etc.
  • The project has been supported by the European Commission's FP7 Programme.

This summary focusses on MJC²'s developments and role in CORE, and also appears on the European Shippers Council website.

Resilience to Supply Chain Disruption

Shippers and logistics operators all over Europe, and indeed globally, are spending time (and not inconsiderable amounts of money) analysing the possible consequences of Brexit. The concerns are well-documented: congestion at ports, impact on transhipment operations and new barriers to trade, to mention just a few.

Shippers are effectively wrestling with a complex logistics optimization problem. For UK-Europe movements, options include re-routing from busy ports in the South East UK to regional ports, switching from ro-ro to lo-lo, switch to air freight, and many other variants. Ireland-Europe movements which use the UK landbridge may have to go the long way round, or switch to air, or take a chance on the tried-and-tested option still working.

Add to this a large slice of uncertainty ("deal" vs "no deal" vs "some other deal" vs....) and you have a worrying situation that is exercising the minds of supply chain directors and managers all over the World.

Technology-Driven Solution

Fortunately, ESC's leadership of a major supply chain research initiative, known as CORE, offers a solution which goes some way to addressing these concerns. Artificial Intelligence, interoperable data pipelines and sophisticated detection & tracking technologies are just some of the innovations coming out of CORE.

Specifically, CORE provides powerful AI-based logistics optimization tools, developed by logistics software innovators MJC², designed to deal with uncertainty in multimodal global supply chains. At the strategic level, CORE allows different scenarios to be modelled and optimized with a touch of a button. For example "what if Dover-Calais transit times increase by X%?", "what is the best alternative port?", "do port X's rail connections make it more attractive than port Y?", etc.

Real-time Management

Furthermore, tactically and operationally, CORE can respond to actual disruptions in the supply chain, e.g. dynamically re-routing freight in response to a major problem in a port, or the closure of an important rail connection.

In this way CORE gives shippers and logistics operators a powerful solution to not only plan ahead for different scenarios, but also to react optimally to unforeseen events and consequences of Brexit.

This sounds like good timing?

In fact, the availability of CORE in relation to Brexit is largely a matter of chance. When the project started more than 4 years ago, the Brexit referendum had not even happened. CORE, which refers to "Consistently Optimized REsilient" global supply chains, set out with the target of developing new technologies and algorithms to make supply chains more resilient to disasters and other major disruptive events. Natural disasters such as earthquakes, floods and hurricanes were contemplated, as well as severe disruptions such as port congestion and industrial disputes.

Brexit can be considered of comparable significance from the supply chain perspective, particularly to international shippers who have relied on the hitherto relatively straightforward flow of goods between the UK and the rest of the EU. Contingency plans can be made, but each one is very time-consuming to develop, and in the current climate of uncertainty there could be many scenarios that need to be considered.

What is CORE?

CORE is a 50 million euro project, coordinated by ESC and involving over 70 partners in Europe and the US. A key innovation is the LARG+O real-time supply chain software toolset developed by MJC². LARG+O stands for Lean Agile Resilient Green & Optimized, referring to the principles underlying its aims. Although originally intended to model scenarios such as hurricanes, strikes and terrorist attacks, the functionality is of course ideally suited to the Brexit situation.

Responding to Disruption

A good example of LARG+O in action is how it responded to the recent congestion problems in northern European ports, combined with the disruptions to the rail network caused by the Rastatt landslip. For the shipper in question, these delays impacted on import and export operations to most parts of the World. LARG+O reacted as follows:

  • Predict the impact on inventories throughout the supply chain (at the SKU level);
  • Automatically choose alternative multimodal routes, e.g. via different ports or on different services, that are the most cost-effective;
  • Analyse the resulting impact of the mitigation strategy on costs and service level.

Proactive Resilience

At the strategic level, the same shipper was able to use the LARG+O simulation toolset to test the robustness of their supply chain to events such as labour disputes, severe weather or political problems. Apart from developing contingency plans for a wide range of scenarios, a "spin-off" benefit was the identification of new trans-Atlantic shipping options which offered a faster door-to-door service, allowing safety stocks to be reduced by at least 1 week.

In the context of Brexit, global shippers using the major north-European ports need to plan for different levels of UK-Europe connectivity (depending on agreements reached), while intra-Europe shippers such as those from Ireland to mainland Europe face other decisions - "should I go through the UK or round it, or both?". LARG+O allows these scenarios to be modelled in minutes, exploiting powerful multimodal supply chain optimization algorithms to develop efficient logistics solutions.

Does it work?

Through its leadership, ESC, working with industry giants such as P&G, Maersk and DHL, supported by leading research organisations such as BMT and TNO, and benefiting from niche innovators such as MJC², has enabled CORE to create powerful tools that can help shippers respond optimally to uncertainties and disruptions in the supply chain, man-made or otherwise.

The collaboration of high-tech developers such as MJC² with real-world shippers and logistics operators has led to a suite of optimization tools that are both highly innovative and practicable. Apart from the strategic optimization and resilience that CORE provides, operational cost savings for shippers and transport operators are substantial, not to mention the increased agility to respond to more commonplace disruptions such as delays, poor weather and other events which occur daily.

Further Information

The European Shippers' Council (ESC) represents the logistics interests of manufacturers, retailers, and wholesalers, collectively referred to as shippers. A key focus of ESC is to put manufacturers, retailers and wholesalers, who are at the heart of the supply chain, also at the heart of European policy making. For more details please see: www.europeanshippers.eu.

MJC² is a specialised developer of leading edge supply chain planning and real-time logistics optimization software, designed to address very large and complex operations that are outside the scope of conventional software tools. For more details please see: www.mjc2.com.

CORE is a research project funded by the European Commission's 7th Framework Programme, involving collaboration between more than 70 partners in Europe and the USA. For more details please see: www.coreproject.eu.

 

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