Project
name: 4C4D (4C for Distribution)
Expected start date:
January 1, 2011
Expected end date:
January 1, 2015
Project participants:
Applicant: Tilburg University, Prof.dr. G. Kant
Participants:
Knowledge institutes:
 Tilburg University: Prof.dr. G. Kant, dr. R. Peeters
 TU Eindhoven: Dr. T. van Woensel
 TU Delft: Prof.dr. L. Tavasszy, dr. H. Quak
 TNO: H.J Quak
Business (alphabetical)
 Ahold: dhr. G. Buitenhuis
 Cornelissen Transport: dhr. M.Zwart
Keywords:
(max. 20 words)
 Etam Retail Services: dhr. J. Otter
 ORTEC (SME): dhr. J. Poppelaars
 Peter Appel Transport: dhr. P. Appel
 TNT: dhr. P. Heijne
 TransMission: dhr. P. Tjalma
Others (alphabetical)
 TLN – KDN: mevr. drs. Ing. B.P.A.M. van de Loo
Collaboration in distribution, City logistics, Sustainability, Alternative
transportation methods
Research theme
4C
1
Summary
An important challenge in the transition towards the Dutch vision of “Regieland” is the question how to
improve the quality (e.g. carbon footprint and air quality in cities) and quantity (e.g. transport movements) of the distribution activities by a better orchestration of the different physical flows. Especially
in urban areas, there is a huge potential for bundling of distribution flows that are now fragmented.
Although there are first signs of co-operation between logistic service providers and retailers, recent
reviews show that there are hardly any examples of commercially successful, environmentally sustainable collaborative solutions in urban areas within Europe. Research into feasible collaborative
supply chain designs, the associated business models and the critical questions of risk and revenue
management, specifically in an urban context, is limited
The focus of this research project is collaboration in distribution and coordination between logistics
service providers and between LSPs and retailers, i.e. the bundling of physical good flows into (urban)
areas, resulting in fewer negative impacts (decongestion, less nuisance in cities). We are convinced
that increased collaboration will lead to innovative distribution concepts that are based on sound business models, while meeting objectives and restrictions set by municipalities. The project proposed
here has favorable circumstances to make a big step forward in this respect:
 The Netherlands has very dense urban areas; hence there is a strong need and urgency among
all parties to improve the current distribution approaches. These solutions should act as best practices towards other dense city areas in Europe.
 We involve key players in this field, from both more scientific area and the industry from various
angles, eg. multinationals and MKB-representatives (see the list of contributors at the first page of
this proposal) who have a strong attention on city distribution and willingness to explore this.
Our focus is not primarily on possible policy scenarios for local government. Rather, we consider opportunities for the industry parties involved (like retailers, LSPs, etc.), given the conditions of the local
government. The fact that ‘city distribution’ was one of the five innovation themes of the “Committee
van Laarhoven” roundtable (2007) with key-persons from the Dutch industry, indicates that this is an
important area for logistics innovation.
We define five important work packages / activities:
1. PhD project Consolidation and coordination at urban retailers. We consider opportunities for consolidation at a single retailer, and collaboration between multiple retailers, building on the combination of inventory and routing.
2. PhD Project Consolidation and coordination at logistics service providers. We consider network
co-operation between LSPs to improve city logistics. Opportunities are to use a city distribution
centre, or alternative transport modes.
3. Consolidation and coordination at the city level: innovative business models for 4C for distribution
in urban areas, based on collaboration between retailers and service providers. Combining the insights from WP1 and WP2, we provide an architecture for cross chain coordination at city level.
4. Master Thesis projects: in order to make new scientific research practical, and to involve consortium partners as much as possible, we will organize at least 18 Master Science projects. Results,
insights, and non-confidential information will be shared in seminars and meetings.
5. Valorization and knowledge dissemination: During the project, the findings of all packages are
integrated, resulting in innovative and ready to use concepts and tools for improving city logistics.
We will define at least two Dinalog demo-projects for valorization and produce high-level scientific
publications. Next to that, dissemination activities will be employed to the industry, e.g., by implementing seminars and best practice meetings. A key person will be assigned to take care of this.
Currently there is a high willingness to improve the city logistics in the Netherlands by all major players. Given the strength, support and interest of our consortium, we expect overall at least 20% reduction in emissions in transport at lower logistics cost. The new best practices and the additional valorization activities should attract more added value towards the campus from companies involved in the
project. To this end we offer 18 MSc student internships to implement the knowledge created. We also
aim at active involvement of SME’s in our research and we expect more involvement of SME’s when
demonstration projects are started.
2
A. Orientation and Project Goals
Motivation
An important challenge in the transition towards the Dutch vision of “Regieland” is the question how
to improve the quality (e.g. carbon footprint and air quality in cities) and quantity (e.g. transport
movements) of the distribution activities by a better orchestration of the different physical flows. Especially in urban areas, there is a huge potential for bundling of distribution flows that are now fragmented. Although there are first signs of co-operation between logistic service providers and retailers,
recent reviews show that there are hardly any examples of commercially successful, environmentally
sustainable collaborative solutions in urban areas within Europe. Research into feasible collaborative
supply chain designs, the associated business models and the critical questions of risk and revenue
management, specifically in an urban context, is limited. . And innovation in urban freight transport is
essential; the last mile is the most expensive part of the transport. Besides, in the urban area, trucks
and vulnerable road users share infrastructure, and nuisance caused by distributing transport is noticed especially in cities. And on the other side, carriers face inefficiencies due to local authorities’
regulations and shopkeepers’ demands.
The focus of this research project is collaboration in distribution and coordination between logistics
service providers and between LSPs and retailers, i.e. the bundling of physical good flows into (urban) areas, resulting in fewer negative impacts (decongestion, less nuisance in cities). We are convinced that increased collaboration will lead to innovative distribution concepts that are based on
sound business models, while meeting objectives and restrictions set by municipalities. The project
proposed here has favorable circumstances to make a big step forward in this respect:
 The Netherlands has very dense urban areas; hence there is a strong need and urgency among
all parties to improve the current distribution approaches. These solutions should act as best
practices towards other dense city areas in Europe.
 We involve key players in this field, from both more scientific area and the industry from various
angles, eg. multinationals and MKB-representatives (see the list of contributors in at the first page
of this proposal) who have a strong attention on city distribution and willingness to explore this.
Relation to Dinalog´s innovation themes
This research is related to the Cross Chain Control Centers (4C) area as defined by Van Laarhoven.
Last mile city distribution activities are currently quite often uncoordinated and can be characterized
by the many different delivering trucks that often block other trucks in narrow city streets. Many different actors are involved in city distribution activities or the results of distribution, but these actors hardly communicate with each other, let alone that there is a form of coordination. Regional players (e.g.
carriers) and local players (receivers, local carriers, authorities) have difficulties in communication
and therefore understanding each others problems and stakes is lackin in the city context. Many initiatives in this area fail since the actors that are responsible for the transport are not involved. This
should result in ways for carriers and retailers to actively improve urban freight transport efficiency
and sustainability. Also, the focus on ‘city distribution’ was one of the five innovation themes of the
“Committee van Laarhoven” in their roundtable meeting (January 2007) with key-persons from the
Dutch industry.
Objectives and goals
Our objectives and goals are (at the next paragraph ‘expected results’ we define this as SMART as
possible):
 4C architectures (i.e. functional and organizational designs including appropriate business models) for innovative, collaborative distribution structures for urban areas.
o Collaborative distribution structures between retailers
o Collaborative distribution structures between LSP’s
o Collaborative distribution structures at city level using 4C
 A number of innovative and validated concepts and tools:
o Model to show relationship between amount and characteristics of stops and inner
3




city characteristics
o Model for revenue management and pricing mechanisms between involved parties
o Feasible business models for city logistics
Best practices and concepts on improved city logistics with 20% city emission reduction, while
reducing overall logistics costs
Basic setups for at least two demonstration projects.
Presentations at international scientific conferences, international publications in high-ranked ISIjournals Education through 18 MSc Theses, lectures and master classes in course programs
2 PhD Theses
Expected results




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SUSTAINABILITY: we expect overall at least 20% reduction in city emissions in transport by lower transportation cost, hence should make city logistics commercially attractive (which is unique
in itself). This should be used as show cases towards the Dutch and European industry, on how
to reach a higher level of organization within supply networks, increasing the chances to create
new jobs.
4C: As an outcome, one of the project results is expected to be a 5C (a city cross chain collaboration centre). The 5C is run by one of the project partners (year 4), for example: collaboration
(due to coordination) between food deliveries and express deliveries in a city by an LSP (in electric trucks).
HUMAN CAPITAL: Through our concept of a student pool of at least 18 students the project also
contributes to the development of human capital in logistics and supply chain management.
Those students will become available to the Dutch logistics industry. Next, due to efficiency gains
fewer truck drivers will be needed, which will help to solve the problem in the next future; i.e.
shortage of high quality distribution drivers. The jobs will be replaced by higher-graded jobs in
planning and collaboration and coordination activities. This specific knowledge should be exported to other cities (also outside the Netherlands).
SCIENCE: The project contributes substantially to the development of scientific knowledge in
various industry domains as retailers, LSPs and the collaboration between them and city logistics. Also we will contribute to innovative themes like alternative pricing mechanisms, business
models and revenue management.
SME: We also aim at active involvement of SME’s in our research (ORTEC and TNO work closely together with SME’s and are already project participant) and we expect more involvement of
SME’s when demo projects are started. The valorization specifically aims at SME as well.
The next steps should be that logistic results in this area should create new jobs in the industry and
the Supply Chain Campus for exploring these innovative techniques, in both a domestic and international context. Next, the project will contribute to a better accessibility in cities and decongestion.
Sustainability
4C
Specific
Less energy
usage and
emissions due
to less trucks;
Measurable
20 % less
emission in
the city, while
reducing
overall transportation
costs.
Knowledge on
collaborative
transportation
planning
A City Cross
Chain Control
Centre (5C)
Acceptable
This goal is
more ambitious, than
most current
city logistics
projects, but
should be
achievable,
based on
some pilots.
Involved Consortium Partners have
either experi-
Realistic
The ambition
is based on
the tacit
knowledge of
innovative
logistics service providers
and involved
retailers.
Timing
Assuming a
demo project
starts at 2012
we expect the
first results by
2013 and the
objective is
met in 2014
Should be
achievable,
given the
current cli-
Starting in
2014, given
the experiences we
4
Human
Capital
Pool of MSc
students developing and
acquiring 4C
skills
≥ 18 supply
4C workers
Science
Publications
in scientific
journals
≥ 10 scientific
papers of
which 2 in top
journals
ORTEC
At least 2
SME companies involved
SME Involvement
ences or ambition in this
direction.
This number
of highly
skilled workers can easily
be absorbed
by industry;
yet we focus
on 4C roles
Given the
practical orientation, we
cannot aimed
at much more
mate on this.
obtain in
coming years.
The MSc
supervision
team is very
experienced.
Every year
about 4 students will
become
available.
The faculty
involved has
shown its
capability to
get industrydriven research in top
journals and
others
We build on
the foreseen
demo projects
linked to
4C4D to get
more SME
involved
The companies involved
are committed
to get demo
projects started as they
see a more
immediate
impact thereof
Given the
time lags
between
submission
and publication, we expect the first
papers in
scientific
journals in
2014 and top
journal publications in
2015.
1 SME from
the kick off
and at least
one more in
2013
Relation to government policy
All the objectives of the project strongly support government policy, for example sustainable city logistics is very important for the Netherlands, noticing also initiatives as the “Ambassadeur Stedelijke
Distributie”, “Lean and Green Award”, etc. The project relates to local governmental policy goals, i.e.
it will contribute to reduction of nuisance in cities, reduction of local emissions (and therefore an improvement of the air quality) and an increase of the livability and accessibility in the cities. And the
project should add to the reduction of disturbing policy restrictions (e.g. time-windows and vehicle
restrictions) for the (participating) companies, due to an increase in possibilities due to collaboration
and innovative business models, (i.e. city distribution and the regulations is one of the top irritations
of the Dutch trucking industry). Besides, the project contributes to other policy goals, for example
reduction in CO2 emissions, fewer trucks on the roads (at peak hours).
Governmental policies are taken into account during the project, because the policies determine the
playing field for the carriers and retailers. We do not aim at changing the policies, but we aim at
showing (local) authorities the carriers’ best practices (both in valorization activities and in demonstration projects), in order to make it possible that governments start to reward carriers for their results
(by providing privileges).
Orientation
Researchers from TU Delft, TU Eindhoven and TNO in the consortium participated in earlier public-
5
private collaboration projects such as KLICT and Transumo. The focus in these projects was primarily
on planning concepts and implementation at individual companies. No attention has been paid to
business models, which may have been a reason why some projects with the aim to implement supply chain collaboration, have not resulted in sustainable relationships. With our focus on business
models, the 4C concept sold as a service, three research projects aimed at developing 4C service
content and one on ICT as enabler, we expect to remove obstructions that have been faced in earlier
research. The principal applicant from Tilburg University is working at both university and at ORTEC,
leading consultancy firm on logistics optimization in the Netherlands. He is very familiar with the focus
on valorization and exploring the scientific results in demonstration and other projects. From his relationship with leading companies like Ahold and TNT, he is very familiar with the current research
topic.
Another reason why we expect to be successful is that all researchers believe in industry-driven research. They all have either a strong track-record on publishing relevant research in top journals or
already a strong link with leading industry-driven companies (like TNO and ORTEC). TNT and Ahold
can be seen as leading companies in supply chain optimization and collaboration. TNT, as number
one in the Dow Jones Sustainability Index, has a very strong profile and incentive for innovative city
logistics concepts, and is very committed to this project.
6
B. Activities and Work Packages
R&D
Activity 1: PhD project Consolidation and coordination at urban retailers
4 years
Activity 2: PhD project Consolidation and coordination at logistics service providers
4 years
Activity 3: Consolidation and coordination at the city level: innovative business models
for city logistics
4 years
Activity 4: MSc student pool
Valorization
Activity 5: Implementation and knowledge dissemination – 3,25 years
Deliverables/
Milestones:
Papers in scientific journals, conference contributions, PhD theses, workshops,
demonstration projects and presentations for practitioners.
Activity 1: Consolidation and coordination at urban retailers
Description:
Abstract
Within urban environments, a major source of transport demand arises from the large number of retailers. Clearly, the historical evolution leads to fewer inventories in the retail outlets. Specifically, the
interplay between inventory and handling processes versus (shelf) space usage leads to inventory
ordering and demand for transport. Many inefficiency examples exist where the (same or different)
LSPs visit the same street multiple times per week, but each time visiting another retailer for small
orders. Finally, many goods are delivered following a very fast service pattern while the necessity, in
many cases, is not there.
In this work package, we focus on consolidation at one retailer and coordination between retailers.
Retail deliveries are typically driven by inventory management systems that aim at inventory cost minimizations (e.g. the automated ordering system at Albert Heijn). As such, they only consider the costs
of ordering versus holding. Retail practice and academic research show that shelf space utilizations,
handling costs, transportation costs, etc. are rarely considered in the ordering decisions. Considering
the true costs of shipping inventory in the stores, leads to more consolidation at the retailer itself, resulting in less transport shipments with higher utilizations. Considering multiple retailers leads to significant coordination issues. In redesigning the usually specific delivery schedules, the visits to the
stores physically close to each other could be clustered, but keeping the overall week schedule balanced. By looking at consolidation at retailers and coordination between retailers, we are able to examine the opportunities and incentives that companies have to modify their delivery schedules (e.g.
night time) and the associated logistical versus environmental cost trade-offs. Collaboration options
between Etam Retail Services and Ahold (e.g. Gall&Gall) are investigated.
Research proposal
Retailers are faced with an ever increasing requirement on their ability to provide high and diverse
service offerings in their stores (e.g. broad assortment, no stock outs, etc.). Store managers have to
deal with these higher service requirements at increasingly lower costs leading to increased pressure
on the efficiency and effectivity of retail store operations. Faced with this increasing challenge of
providing the right product in the right place at the right time and at the right price (Fisher et al., 2000),
many retailers are concentrating on improving the efficiency of their operations. Effective management
of store operations is crucial to the retailer’s own success (Pal and Byron, 2003) and often critical for
the performance of the entire supply chain. Many believe that the last mile of the retail supply chain up
to the shelf represent both the highest supply chain cost and the biggest customer service risk (Supply
Chain Effectiveness Survey, 2002). An essential objective for retailers is to provide a high availability
of their products at low operational costs. This ultimately challenges retailers to formulate good plans,
7
well executed (Fisher, 2009).
Inventory management remains a key strategic weapon for many retailers. The academic research
and studies on inventory management systems is rather abundant (see Silver (2008) for a recent review). However, much of the research remains rather theoretical and there is still a gap between theory and practice. Many of the retail inventory management models and methods use assumptions that
were developed for application areas other than retailing. It is often assumed that unmet demand is
backordered, while in retailing, unmet demand is typically lost. The inventory control problem of many
grocery retailers has several other features in common, additional to lost sales. Demand for products
is stochastic; the store orders on a periodic basis and receives replenishment according to a fixed
schedule. For example, some products are ordered daily, others are order every second or third day.
Typically, the replenishment lead times are rather short in the grocery sector. The orders placed in the
morning are often received at the end of the day, or the beginning of the next day. In any case, the
replenishment lead time is typically shorter than the length of the review period. Furthermore, the orders are usually constrained to batches of fixed sizes (the case packs), generally dictated by the manufacturer from the need to coordinate inventory and transportation of several items. Upon order receipt
at the store, the replenishment stock needs to be stacked on the shelves, and this activity is part of the
shelf stacking process at the stores. Shelf space allocation of many products is limited, dictated by
marketing constraints, and surplus stock, which does not fit on the shelf, is temporarily stored in the
stores’ backroom, often a small place, poorly organized (see Van Donselaar et al., 2010).
An empirical study of Broekmeulen et al. (2004) gives a distribution of the costs (collected for a number of Dutch retail chains). Focusing on the last mile of the supply chain, we note that the handling
costs at the store level together with the transportation costs dominate the other inventory cost in the
retail stores (see Figure 1). As the transportation activities are done within an urban area, it is expected that these costs are more likely to increase, leading to a larger share in the cost pie. Complete
retail models that consider all these relevant aspects are not available at this moment. On top of this,
no models exist that assist different retailers in order to align their operations to each other. This research work package will focus on two important aspects: (1) consolidation at a single retailer and (2)
coordination between different retailers. We detail out each of these two research questions.
Figure 1: Cost structure of a retail supply chain (Broekmeulen et al. 2004)
Research question 1: Consolidation at a single retailer
Currently, models that assess the overall operational costs in retail stores on multiple dimensions are
not available. Much of the academic model-based research in retail operations has focused on issues
such as inventory, marketing, or planograming decisions separately (see e.g. Corstjens and Doyle,
1981; Dreze et al., 1994; Urban, 1998; Cachon, 2001).
At a retail store, different operational processes interact with each other. Specifically, key activities are
inventory management, product handling and (shelf) space allocations lead to demand for transport.
Proper control of store operating expenses typically requires balancing transportation, inventory, shelf
space and handling costs. Retail inventory management systems usually only consider inventory or-
8
dering costs versus inventory holding costs. Moreover they only look into each product individually
rather than at multiple products (i.e. single item inventory models versus multi item inventory models).
This research question extends the current state of knowledge in two directions:
1. The current single item inventory replenishment models do not consider the transportation
costs in the objective function. Identifying how the transportation costs can be added to the
model and obtaining the optimal policy for this setting will be the focus of this extension of the
established lost-sales inventory models.
2. Clearly, transportation is done with trucks having a finite capacity over multiple items. The
single item inventory models thus need to be extended to consider multiple items together. On
top of this, other capacity requirements in the stores (e.g. people availability) need to be taken
into account.
Concluding, we develop and solve several lost-sales single and multi item inventory control models,
which take into account the key characteristics of the retail environment: transportation costs, batch
ordering, handling costs, shelf space and backroom operations. We use stochastic dynamic programming to model and solve the inventory control problem. Since optimal policies have rather complex structure, we also propose heuristic policies.
Research question 2: Coordination between different retailers
Retailers are often located relatively close to each other, e.g. in the same shopping street. In almost
all cases, retailers act independently of each other. Specifically, it would be interesting from a
transport consolidation point of view, to coordinate the inventory ordering process among different
retailers. Delivery schedules need to be adapted among different retailers employing different inventory policies.
From a scientific literature point of view, decision questions with regards to the level of centralization
need to be addressed. Chen et al. (2001) studied a distribution channel where a supplier distributes a
single product to retailers, who sell the product to consumers. The demand in each retail market arrives continuously at a constant rate that is a general decreasing function of the retail price in the market. They characterized an optimal strategy, maximizing total system profits in a centralized system.
Interestingly, they also showed that the same optimum level of profits can be achieved in a decentralized system, but only if coordination is enforced via pricing mechanisms. In their paper, the authors
also provide numerical examples to illustrate the value of coordination. Alternatively, many authors
(Waller et al., 1999) focus on the value of VMI (Vendor Managed Inventory) to facilitate coordination
among retailers. VMI is one of the most widely discussed partnering initiatives for improving multi-firm
supply chain efficiency. In retail supply chains, there is seldom any coordination of orders from the
different buyers. Orders often arrive simultaneously, making it impossible to fulfill all delivery requests
on time. With VMI, greater coordination supports the supplier’s need for smoother transportation without sacrificing the retailer’s service and inventory objectives. The general framework within which the
above issues are considered is usually production logistics rather than distribution logistics.
In this research question, we build on the inventory-routing literature, within the framework of distribution logistics. This literature is characterized by the simultaneous relevance of routing and inventory
issues. Many models have been proposed for ordinary inventory and lot sizing problems where no
routing issues are considered, or transportation costs are just considered as a fixed cost (Hahm and
Yano, 1995). More specifically, when several destinations are involved, the Joint Replenishment Problem is relevant (Anily and Federgruen, 1990). Conversely, for problems involving routing aspects only,
several problem types have been studied (Fisher, 1995). Baita et al. (1998) give an excellent overview
of the inventory-routing research considering dynamics where repeated decisions have to be taken at
different times within some time horizon, and earlier decisions influence later decisions. Clearly this
fits the retail environment as described earlier in this work package.
References
 Anily, S. and Federgruen, A. (1990) One warehouse multiple retailer systems with vehicle routing
costs. Management Science 36, 92-114.
 Broekmeulen R, van Donselaar K, Fransoo J and van Woensel T. 2004. Excess shelf space in
retail stores: An analytical model and empirical assessment. BETA working paper 109, Tech-
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nische Universiteit Eindhoven, Eindhoven.
Cachon G (2001). Managing a Retailer’s Shelf Space, Inventory, and Transportation. Manufacturing & Service Operations Management 3: 211-229.
Chen F., A. Federgruen and Y. Zheng, Coordination Mechanisms for a Distribution System with
One Supplier and Multiple Retailers, Management Science, Vol. 47, No. 5 (May, 2001), pp. 693708
Corstjens, M., P. Doyle. 1981. A model for optimizing retail space allocations. Management Science, vol. 27, pp. 822-833.
Dreze X, Hoch SJ and Purk ME. 1994. Shelf management and space elasticity. Journal of Retailing 70, 301-326.
Fisher, M.L., Raman, A., McClelland, A.S. 2000. Rocket Science Retailing Is Almost Here-Are You
Ready?, Harvard Business Review, July-August, 115-124.
Fisher, M. 1995. Vehicle routing. Handbooks in Operations Research and Management Science,
Vol. 8: Network Routing. eds. M. O. Ball, T. L. Magnanti, C. L. Monma, and G.L. Nemhauser, pp.
1±33 Elsevier, Amsterdam.
Fisher, M. 2009. Rocket Science Retailing: The 2006 Philip McCord Morse Lecture, Oper. Res.
57(3), 527-540.
Hahm, J. and Yano, C. A. 1995. The economic lot and delivery scheduling problem: powers of two
policies. Transportation Science 29, 222-241.
Urban, T. (2002), The interdependence of inventory management and retail shelf management,
International Journal of Physical Distribution & Logistics Management, 32(1-2), p.41.
Pal, J.W. and Byron., J.W. 2003. The five Ss of retail operations: a model and tool for improvement, International Journal of Retail & Distribution Management, 31(10):518-528.
Silver, E.A. 2008. Inventory management: a tutorial, canadian publication, practical applications
and suggestions for future research.
http://haskayne.ucalgary.ca/haskaynefaculty/files/haskaynefaculty/2007-03.pdf
Supply Chain Effectiveness, survey. 2002. Prepared by Kurt Salmon Associates.
Van Donselaar K., V. Gaur, T. Van Woensel, R.A.C.M. Broekmeulen, J.C. Fransoo. 2010. Ordering Behavior in Retail Stores and Implications for Automated Ordering, Management Science.
Waller M., M.E. Johnson, T. Davis. 1999. Vendor-managed inventory in the retail supply chain.
Journal of business logistics.
Planning:
Start: 2011
Completion: 2015
The length of the project is 4 years. For the practical elaboration of this research project, we propose
the following planning.
Year 1: In the first phase that takes about a year throughput time, the focus of the Ph.D. student is on
acquiring skills through an educational program and understanding of the different modeling concepts
through literature research.
Summary:
•
Literature study on models and optimization
•
Education (courses of the research school BETA and the “Landelijk Netwerk Mathematische
Besliskunde”)
Year 2+3: After the preparation phase, the second phase is dedicated to in-depth research and the
derivation of results to be published in a number of papers. The in-depth research involves the elaboration of Research Questions 1 and 2. During the second phase, software will be developed that enables extensive experimenting. The software will be applied to a number of real-world cases. The
throughput time of the second phase is about two years.
Summary:
•
Formulation and analysis of new quantitative models
•
Education
10
•
Writing of three papers
Year 4: The third and last phase with a duration of one year is dedicated to finalizing the research,
papers and writing a Ph.D. thesis.
Summary:
•
Writing of one paper
•
Writing of the Ph.D. thesis
Work distribution:
The proposed project will be organized as a Ph.D. project. The group members and times spent per
person are as follows.
Name
Dr. T. van Woensel
Prof. Dr.Ir. J.C. Fransoo
Ph.D. Student
Discipline
Operations Management
Operations Management
See below
Hours/week
4
1
40
Dr. Tom van Woensel is the workpackage leader and will take care of the daily supervision of the
Ph.D. student. The second supervisor will be Prof. Dr. Ir. J.C. Fransoo. Every three weeks, meetings
with the student and the two supervisors will be scheduled to monitor the progress of the research
project. The promotor of the Ph.D. will be Prof. Dr. Ir. J.C. Fransoo, the intended co-promotor is dr.
van Woensel. The Ph.D. candidate for this project can be someone with a M.Sc. degree In Operations
Research or Applied Mathematics (e.g. combinatorial optimization) and a strong interest in practical
problems or someone with a M.Sc. degree in industrial engineering and strong mathematical skills.
Expected results/deliverables/milestones:
It is expected to have a number of scientific research papers (as a guideline one paper per year or
four papers) and a doctoral thesis. Moreover the PhD student will have to present his research on a
number of international conferences and meetings (e.g. INFORMS) and participate in workshops and
presentations for practitioners.
Activity 2: Consolidation and coordination at urban logistic service providers
Description:
Abstract
In this work package, we focus on improving the carbon footprint at urban environments while decreasing the overall cost from an LSP-perspective. There are different methods and initiatives to be
considered in more detail: collaboration between LSP: (a) using a cross-dock location just outside the
urban area and combining deliveries from multiple LSPs in one round, (b) moving distribution from day
towards night time, to avoid traffic jams during the day, (c) convincing small customers in the real city
center (‘high street’) to be delivered by the same LSP.
In the past several experiments have been done on a ‘case study’ basis, but more fundamental research is lacking. Therefore, commercial success of these initiatives is limited. Based on these experiences, the newest technology in transportation and collaboration modeling, we are able to examine
new opportunities and incentives for improving urban environment distribution, which can be applied in
a European context as well.
Research proposal
The demands and requirements of transportation, in particular towards urban environments, are increasing. In particular the local rules and legislation have a strong impact on the way LSPs can optimize their transportation schemes. Time-access regulations and vehicle restrictions are increasingly
used, especially in Western Europe, to improve social sustainability in urban areas. These regulations
considerably affect the distribution process of retail chain organizations as well as the environmental
burden. In (Quak and De Koster, 2009) the impact of several local regulations on the transportation
costs is considered. Also the ‘Binnenstadservice’ project was based on earlier research on sustainable
11
urban distribution (Quak and Tavasszy, 2010). Dablanc (2007) considered several methods for goods
transport in European cities.
In this project we will not consider systematically the effects of possible new local regulations, but we
will take the current (or most likely in the near future) regulations as a starting point. The need for a
more efficient way to transport urban freight is getting bigger and bigger, due to the fact that congestion and emission is increasing in a city, customer are getting fragmented collection and deliveries,
and overall the transportation companies are facing an increase in delivery costs. Delivering goods
within urban environments is a challenge for a long history. Many retailers, outlets and consumers
have their own logistic service provider (LSP) to deliver the goods. As a result, a considerable amount
of LSPs visits the same street at the same day, but for different customers, different product types or
different contracts. Since many streets in (historical) city centres are narrow, these different vehicles
cause congestion in the shopping streets during the time-window periods as vehicles have to wait for
another vehicle to be unloaded before being able to drive through the narrow streets. Consolidation on
street level could be effective to solve these problems.
New techniques and insights have become available to support collaboration between different LSPs
or different distribution networks. Collaboration of course implies methods and pricing between the
involved parties, to maximize the engagement and an honest way of sharing cost and benefits. In his
PhD – thesis, Cruijssen (2006) explores methods to exploit synergy in transportation. Also
Groothedde (2005) focuses on exploring new techniques in network solutions and collaborations between LSPs.
Research question 1: Relation between distribution structure and emission
In the last years, the impact of local legislation rules on the total distribution cost for an urban environment has been considered (e.g., see Quak and De Koster, 2009). Also, several databases for
emission behavior have been organized for multiple National and European cities (e.g., by DHV,
2010). However, in general, the emission impact of individual deliveries, with their characteristics on
size, product type in an urban environment is missing. If this information would be known, it would give
insight what the effect is when an LSP can avoid a small number of deliveries in a city by outsourcing
them. More precisely, this will give a relationship between the amount of deliveries of an LSP and
impact on cost and emission for a certain geographical area. Comparing geographical areas on several characteristics (local regulations, spatial area) will give a method to compute the impact for areas,
which were unknown until now. The answer on the first research question enables the carriers to estimate the environmental benefits of collaboration for a certain geographical area for a certain type of
product and a certain volume. This information is useful to make an estimation on the sustainability of
collaboration (or other city logistics initiatives). Based on this information the societal value of different
forms of LSP collaboration should be easier to estimate (in a consequent manner).
Research question 2: Collaboration between LSPs
The horizontal collaboration between LSPs is a well-known topic. Groothedde has explored new techniques in network solutions and collaborations between LSPs (Groothedde, 2005). For sustainable
urban distributions, cross-docking locations just outside the area, are considered to be an interesting
model (Quak and Tavasszy, 2010), but requires more investigation to be successful. In particular the
pricing model between the LSPs requires attention. A first model, made by Cruijssen (Cruijssen, 2006)
is based on game theory. This model gives a method how to allocate synergies to participants in a fair
and sustainable way using the Shapley value (Shapley, 1953). Further research (Cruijssen et al.,
2010) has shown that for instance supplier-initiated outsourcing (called ‘insinking’) is very promising.
Besides the size of the synergies and the allocation method also the order in which and the offer with
which potential partners are invited should be determined. In practice typically collaborations start
small and then grow and game theory provides a theoretic framework to model this process. Given the
characteristics of urban environments, cross-docking options and the important role of environmental
synergies further research in this area can be done and looks promising. Based on the strong group in
game theory at the Tilburg University (P. Borm and others) we expect to bring this strong method a big
step forward. Moreover, the potential overall benefit (in cost and emission) should become clear in the
overall supply chain over multiple LSPs. This requires to adapt a strategic VRP-modeling to compute
12
the potential benefits, e.g., in relationship to amount of stops, cross-docking locations, and service (is
it possible to reach the cross-dock location in time), without knowing all the details about the deliveries
(Figlozzi, 2009). It should also help the LSPs to find suitable partners for collaboration (at different
stages in the collaboration). With this information and model, LSPs should be better equipped to find
the right local (and / or regional) partners to make their (city) distribution more efficient, and at the
same time share the benefits (and potential costs) in a fair way. A specific case that is considered is
network collaboration; in case several LSPs collaborate in a network and exchange their volumes at
low peak periods (for example the nights), trucks can enter cities next morning fully loaded for one
city. Currently, TransMission (a consortium partner) makes urban deliveries like this, and, for example
consolidates the volume of different local LSPs for one region and one LSP; this results in bundling in
which over 85% of the goods delivered in for example Amsterdam come from network partners of the
local TransMission LSP. In this research question we examine ways for carriers to collaborate in networks and so to bundle deliveries for regions.
We will also look at possibilities for LSPs to collaborate in distribution concepts, such as the use of
LHV (longer and heavier vehicles, i.e. ecocombies) for distribution. These ecocombies contain one
truck and two city-trailers in the national distribution, whereas for the distribution in cities the citytrailers are decoupled and can be separately pulled by a single truck. This truck can run on (for example natural gas, consortium partners Cornelissen and Ahold are already experimenting with this concept). In this research we examine how collaboration between LSPs can be used for designing shared
decoupling locations at city borders for these ecocombies and whether it is possible to deploy the
natural gas truck (or pool of trucks) (fewer local emissions and noise nuisance) for the collaborating
LSPs (and how to govern and set up such a form of collaboration). We foresee that these best practices on this case study will be obtained by involving MSc. Projects.
Research question 3: Combining different transportation flows of LSPs
Based on the fundamentals of questions 1 and 2 we consider different aspects of combining transportation flows in this work package’s third research question. Based on the model on collaboration between LSPs (RQ2) and the relationship between emissions and deliveries (RQ1) we develop best
distribution practices from a city perspective; examples could be (depending on the results of questions 1 and 2):
(a) What are the impacts of moving transportation from day to night time (e.g. decreasing the pollution
due to less congestion, fewer problems with vulnerable road users, noise nuisance, etc.)?
(b) Consolidation at street-level, for example deliver small high-value stores in one street by the same
LSP and in another street by another LSP (based on cross-docks at the city border), this would
improve the utilization of the trucks at the ‘high street’ and decrease waiting times at the narrow
streets.
To get insight in possible solutions for these combinations of transport flows insights are necessary in
the special characteristics and volume. Based on research questions 2 and 3 combined, this third
question examines the possibilities of different pricing structures and the benefits of avoiding busy
hours (and so less pollution) could lead to more generic answers for collaborations between LSPs in
urban and inter-urban transport networks. This third research question is answered in parallel with the
third research question of WP3.
References
 Cruijssen, F. (2006), Horizontal Cooperation in Transport and Logistics, PhD. Thesis, Tilburg
University, Tilburg,
 Cruijssen, F., P. Borm, H. Fleuren and H. Hamers (2010), Supplier-initiated outsourcing: A
methodology to exploit synergy in transportation, EJOR 207, pp. 763-774.
 Dablanc, L. (2007), “Goods transport in large European cities: Difficult to organize, difficult to
modernize,” Transportation Res. Part A, v41, pp. 280-285.
 Groothedde, B. (2005), Collaborative Logistics and Transportation Networks, PhD. Thesis,
Delft University of Technology, Delft.
 Figlozzi, (2009), Planning approximations to the average length of vehicle routing problems
with time window constraints, Transportation Research Part B-Methodological 43, pp. 438-
13
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447.
Quak, H.J. and M.B.M de Koster (2009), Delivering Goods in Urban Areas: How to Deal with
Urban Policy Restrictions and the Environment, Transportation Science 43, pp. 211 – 227.
Quak, H.J, and L.A. Tavasszy (2009), Customized solutions for sustainable city logistics: lessons learned after one year Binnenstadservice. In: Van Nunen, J. P. Rietveld and P.
Huijbregts. Transitions in sustainable mobility. Springer (to appear)
Shapley, L. (1953), A value for n-person games. In H. Kuhn and A. Tucker (Eds.), Contributions to the Theory of Games 2, pp. 307-317, Princeton University Press, Princeton.
Planning:
Start: 2011
Completion: 2015
The length of the project is 4 years. For the practical elaboration of this research project, we propose
the following planning.
Year 1: In the first phase that takes about a year throughput time, the focus of the Ph.D. student is on
acquiring skills through an educational program and understanding of the different modeling concepts
through literature research.
Summary:
•
Literature study on models and optimization
•
Education (courses of the “Landelijk Netwerk Mathematische Besliskunde”)
Year 2+3: After the preparation phase, the second phase is dedicated to in-depth research and the
derivation of results to be published in a number of papers. The in-depth research involves the elaboration of Research Questions 1 and 2. RQ3 will be done in parallel with WP3, resulting in case studies
on carriers’ current practices in city logistics (and the business models that are used) and writing a
paper on it.
Summary:
•
Formulation and analysis of new quantitative models
•
Education
•
Writing of three papers
Year 4: The third and last phase with duration of one year is dedicated to finalizing the research, papers and writing a Ph.D. thesis.
Summary:
•
Writing of one paper
•
Writing of the Ph.D. thesis
Work distribution:
The proposed project will be organized as a Ph.D. project. The group members and times spent per
person are as follows.
Name
Dr. R. Peeters
Prof. Dr. G. Kant
Ph.D. Student
Discipline
Operations Research
Operations Research
See below
Hours/week
4
1
40
Prof. Dr. Goos Kant is the work package leader. Under his overall leading the daily supervision of the
Ph.D. student will be done by Dr. R. Peeters. Every three weeks, meetings with the student and the
two supervisors will be scheduled to monitor the progress of the research project. The promoter of the
Ph.D. will be Prof. Dr. Goos Kant, the intended co-promotor is dr. Peeters. The Ph.D. candidate for
this project can be someone with a M.Sc. degree In Operations Research or Applied Mathematics
(e.g. combinatorial optimization) and a strong interest in practical problems or someone with a M.Sc.
degree in industrial engineering and strong mathematical skills. Dr. H. Quak (responsible for WP3) will
14
be involved for specific questions of WP2, also to guarantee the close links between the work packages.
Expected results/deliverables/milestones:
It is expected to have a number of scientific research papers (as a guideline one paper per year or
four papers) and a doctoral thesis. Moreover the PhD student will have to present his research on a
number of international conferences and meetings (e.g. INFORMS) and participate in workshops and
presentations for practitioners.
Activity 3: Innovative business models for 4C in city distribution (4C4D)
Introduction
City logistics practices seem to be dominated by failing (and often subsidized) initiatives and typically
concern very local approaches (Quak, 2008). Rather paradoxically, with the aim to reduce urban
freight’s nuisance, local authorities make efficient city distribution more difficult, resulting in problems
and irritation for carriers as well as an increase in emissions. Local regulations like time windows are
often not harmonized between cities, resulting in vehicle utilization problems, inefficient transport operations, extra emissions and serious additional costs for carriers and shippers (see Quak and De
Koster, 2007; 2009). The symptoms of this lack of co-ordination are clear; for example, the handful of
economically feasible city distribution centers in Europe handle only a small percentage of all last mile
freight, while the rest (we suspect >95%) moves unchanged under harsh regulatory conditions. Urban
freight transport problems are complex and compound, however, as a solution for one actor forms the
base of a new problem for another actor (Browne and Allen, 1999). Clearly, a higher level of coordination is needed to arrive at economically feasible, sustainable structures for higher volumes.
Work package 1 and work package 2 focus on finding new approaches for distribution, starting from
respectively the retailers’ and the LSP’s perspective. It is likely that there will be both interference or
opportunities between the business models of these actors, as well as interference with the regulations and pricing regimes imposed by local authorities. Here we integrate these perspectives together
into a cross-chain consolidation center (4C) perspective. In this work package we aim at finding feasible business models for collaborative activities between LSP’s and retailers, that enables to efficiently
make last mile deliveries in a sustainable way, taking into account the relevant public sector policies.
We identify feasible collaborative business models using in interaction with the first 2 work packages
and examine the dynamics of building up collaborative structures through revenue management. Finally, this work package will bring the insights from the feasible business models together in a design,
together with the participating companies, of a cross chain collaboration center for city distribution
(4C4D).
Business models for last mile city distribution
Academic research (as well as political interest) in the field of city logistics has increased over the last
two three decades. And although this increasing interest is encouraging, it is striking that a vast majority of research and initiatives did not lead to an actual improvement in city distribution nor in improvements of the sustainability of urban freight transport activities (see also Quak, 2008, Dablanc, 2007
and Browne et al. 2005). Quak and Tavasszy (2010), Browne et al. (2005) and Quak (2008) mention
several reasons for the failure to improve city distribution, that eventually boil down the fact that many
initiatives are not viable, a good business model is lacking. Many initiatives are set up by local authorities, by researchers or by new formed NGO’s, and carriers are quite often not involved. In our research we will examine and design the business models for the last mile city distribution together with
the participating companies, the carriers. According to Teece (2010) a business model should outline
how a business enterprise delivers value, considering the revenues, costs and profits. Osterwald
(2004) distinguishes four areas (including nine building blocks) that a business model must address;
Chesbrough (2010) argues that this approach to construct maps of business models (see Figure 1) is
useful to experiment with different business models. This will be our starting point to develop collabo-
15
rative business models for city distribution.
Figure 1 Decomposition of a business model (Chesbrough, 2010)
The organizational models from WP1 and WP2 will be evaluated, as well as possible combined organizational models that emerge from these WPs.
The business models that are used for current innovations in city distribution in the Netherlands (with
the participating partners) are examined based on case study research approach (see Voss et al.
2002, Eisenhart, 1989 and Yin, 2003). An example of a case that will be studied is LinX at Cornelissen
and another example is the TNT mobile depot: deliveries for multiple rounds are brought to the city
center by a trailer, and delivered to the final customer by bike or other equipment or the Cargohopper
in Utrecht (by Hoek Transport, part of TransMission).
The case studies’ outcomes should be translated to other situations (i.e. other cities and other carriers
in and outside the Netherlands) – this will be done in close cooperation with activity 5: valorization.
The business models can be used by carriers to start (or continue) successful city distribution activities. The case studies and the resulting generalizable business model answer the question what (private) carriers can do to organize their final distribution in an efficient and environmental and financial
sustainable way. The four areas that have to be considered in a business model are: product, customer interface, infrastructure management, and financial aspects. The designed business models
add to current literature on city logistics as it provides answers on what can be successful (and what
not) and for which reasons (from the carrier-perspective, in contrast to the many opportunistic initiatives). Currently, this way of examining city logistics initiatives is hardly done (in practice nor in research). Quak and Tavasszy (2010) make a first attempt in using the business model approach to
examine a city consolidation centre. Next, it also adds to the literature on business models, since the
business models that are required for successful city distribution require compliance with the complex
environment these activities take place in (many stakeholders with conflicting interests and local authorities’ regulation). This implies that interactions with authorities, receivers, residents and other relevant stakeholders have to be included in the business models as well, although the (carriers’) value
proposition in the business model will not directly affect some of these stakeholders.
One of the problems in city logistics activities is that many stakeholders do not have an incentive to
change their behavior. In Quak, Agatz and Van Nunen (2008) the idea is discussed to ‘seduce’ stakeholders to cooperate with carriers in such a way that carriers can organize their last mile more efficient
and at the same time more sustainable. An example of how the use of revenue management practices
can lead to lower costs and better performance can be found in Agatz (2009) as well as in Marmorstein et al. (2003) and Talluri and Ryzin (2004). We will examine the dynamics of building up collaborative structures (between carriers, retailers, receivers and authorities) through revenue management.
We extend these business models by examining how alternative value propositions (see also figure 1
and Teece, 2010) could result in a better business model for the carriers, the receivers (and maybe
even the authorities). Currently, carriers do not have direct contact with actors that are active at the
city level (i.e. the local authorities and the receivers), see also figure 2. Many carriers face serious
problems in delivering receivers in cities, due to the combination of governmental time windows and
16
the time slots defined by the receivers. We examine how this could be improved by introducing smart
incentives to make collaboration work in practice.
Figure 2 Relations between stakeholders (adapted from Quak, 2008).
Finally, this results (also based on the results of the other activities, i.e. the two PhD researches and
the trial-and-error approach in the demonstration projects that have to start, how in a certain city a
Cross Chain Collaboration center for City Distribution (4C4D) could be designed. Finally we develop a
4C4D architecture based on the business model approach explained earlier in this work package.
This activity aims at combining scientific research and practical use of the results. The case studies
will directly help participating companies in improving their final distribution, whereas the later results
will help them innovate in their city logistics activities. There is a very strong connection between the
research in this work package and the valorization and dissemination activities in work package 5,
since the same persons are involved (although the organizations differ).
References
 Agatz, N. (2009) Demand Management in E-Fulfillment. PhD thesis, ERIM, Rotterdam.
 Browne, M., M. Piotrowska, J. Allen and A. Woodburn (2005). Urban freight consolidation centres – final report. TSG, University of Westminster, London.
 Browne, M. and J. Allen (1999).
 Chesbrough, H., 2010, Business Model Innovation: Opportunities and Barriers, Long Range
Planning (forthcoming).
 Dablanc, L. (2007). Goods transport in large European cities: difficult to organize, difficult to
modernize. Transportation Research Part A 41(3), 280-285.
 Eisenhardt, K.M., 1989, Building theories from case study research, Academy of Management
Review, 14, 4, 532-550 (1989).
 Marmorstein, H., J. Rossomme and D. Sarel (2003). Unleasing the power of yield management in the Internet era: Opportunities and challenges. California Management Review 45(3),
146-167.
 Osterwalder, A., 2004 The Business Model Ontology – PhD thesis, university de Lausanne.
 Quak H.J. and L.A. Tavasszy (2010/1, forthcomming). Customized solutions for sustainable
city logistics; lessons learned after one year Binnenstadservice, in: J. van Nunen, P. Rietveld
en P. Huijbregts (eds.) Transitions towards sustainable mobility, Springer, Berlin.
 Quak, H. J., J. Van Nunen, and N. Agatz (2009). Customized policies for sustainable urban
distribution, in E. Taniguchi and R. G. Thompson (eds.), City Logistics V, 335-350, NOVA Science Publisher, New York.
17
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
Quak, H.J. and M.B.M de Koster (2009). Delivering Goods in Urban Areas: How to Deal with
Urban Policy Restrictions and the Environment, Transportation Science 43, pp. 211 – 227.
Quak, H. (2008). Sustainability of urban freight transport. PhD thesis, ERIM, Rotterdam.
Quak, H.J. and M.B.M de Koster (2009). Exploring retailers' sensitivity to local sustainability
policies. Journal of Operations Management, 25(6), 1103-1122..
Talluri, K. and G. van Ryzin (2004). Revenue management under a general discrete choice
model of consumer behavior. Management Science, 50(1), 15-33.
Teece, D.J. (2010) Business Models, Business Strategy and Innovation, Long Range Planning, forthcoming.
Van Duin, J.H.R., L.A. Tavasszy and E. Taniguchi (2007). Real time simulation of auctioning
and re-scheduling processes in hybrid freight markets. Transportation Research part B, 41(9),
1050-1066.
Voss, C., N. Tsikriktsis and M. Frohlich, Case research in operations management, International Journal of Operations & Production Management, Vol. 22 No. 2, 2002, pp. 195-219
Yin, R.K., 1989, Case study research, London, Sage.
Planning:
Start: 2011
Completion: 2015
The length of the project is 4 years. For the practical elaboration of this research project, we propose
the following planning.
Year 1:
 Case studies on carriers’ current practices in city logistics (and the business models that are used)
and writing a paper on it.
Year 2+3:
 Understanding of revenue management practices in other industries through literature research.
 Formulation and analysis of revenue management practices in city distribution.
 Design of innovative business models and revenue management practices for city logistics (and
writing a paper on it).
In the 4the year the last research question (the development of a 4C4D architecture) is undertaken,
based on the business models examined in the previous years.
Close collaboration with all other activities is required in developing the business models for a 4C4D
architecture. The research in this activity will be in close collaboration with the valorization of the results with (participating) companies (activity 5).
Work distribution:
The proposed project will be organized as follows:
Name
Dr. H.J. Quak
Prof. Dr.Ir.L.A. Tavasszy
Discipline
Logistics
Logistics
Hours/week
4
1
Dr. Hans Quak is the workpackage leader and will take care of the research. Besides, he will be available for the support of the the Ph.D. student from activity 2. The researcher will collaborate with Prof.
Dr. Ir. L.A. Tavasszy.
Expected results/deliverables/milestones:
This activity is expected to result in at least four research papers, like conference proceedings, book
chapters and journal papers. We expect to organize frequent workshops and presentations for practitioners (in combination with TNO, see activity 5).
18
Activity 4: MSc student pool
The student pool should be the connecting element between the scientific partners and the partners
from industry. The student pool is coordinated by TU/e. MSc students will be involved to evaluate and
improve carriers’ urban freight transport initiatives, retailers’ inventory decisions and carriers’ distribution activities. The MSc students work in this project to support the development of scientific
knowledge by gathering data, developing tools and doing research themselves (with existing tools
from ORTEC or TNO). The students also play an important role (at a later stage in the R&D project) in
implementing research results (acquired by PhD students) in practice in the context of demo projects
set up by the companies participating in this research project.
Defining relevant research projects (by and for companies that are suitable for an MSc thesis) takes
serious efforts, as well as supporting the students from both industrial partners and universities. Selecting, preparing and allocating students from the participating universities to the research projects
and the demo projects is a substantial effort.
Work distribution:
We aim at at least 18 MSc projects that are evenly spread over the three universities; this implies that
all work package leaders will coordinate 6 MSc student projects over the 4 years of this project.
Expected results/deliverables/milestones:
At least 18 MSc projects
Activity 5: Implementation and knowledge dissemination
The results of the research projects must be translated into working solutions at participating companies and into parts of the services provided by new 4C companies. There are multiple ways to achieve
this:
1. The MSc students play an important role to validate and implement the new scientific ideas into
practice, and close the bridge between theory and practice (see activity 4).
2. TNO and ORTEC are involved in this Dinalog-project. They also have the intention to explore and
implement the new ideas into practice. In the project budget 60k euro is reserved for valorization
and knowledge dissemination. The consortium plans to hire TNO for valorization, demonstration,
and knowledge dissemination in the person of Hans Quak. TNO is the right partner for valorization, since this is the role TNO naturally fulfills (bridge between science and practice). This person
will be responsible for a valorization plan (which should be finished within 3 months after the Dinalog subsidy is awarded. The valorization plan will be updated every year and discussed with Dinalog. The valorization plan includes concrete actions based on the research progress and the
opportunities in the market.
3. Involved companies will learn from the techniques during seminars and workshops (organized at
least at a yearly basis by the research institutes involved. Money is reserved for organizing seminars and workshops in the budget (if possible in cooperation with participant TLN). Seminars and
workshops are a good way to disseminate the knowledge to a broader audience. The companies
can start up to implement the ideas, given their interest in this topic. We organize at least one
seminar per year. This will also be the platform to present and review the valorization and
knowledge dissemination plan.
4. We will apply demonstration projects in the future, which is also a good method for a next step in
the implementation of the ideas and results. Examining possibilities for demonstration projects together with (participating) companies is one of the responsibilities of the valorization coordinator
(proposed H.J. Quak, TNO). We expect to initiate at least one demonstration project per year
(which is not necessarily financed by Dinalog; we expect that companies are willing to invest in
good ideas themselves).
5. The knowledge institutes are responsible for making easy to use tools and manuals available,
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next to the scientific outputs (with help of TNO and ORTEC, if this is necessary). Concretely this
will result in the following outputs:
a. A tool to evaluate inventory decisions for retailers (WP1)
b. A tool to evaluate combined inventory-routing decisions in collaboration (WP1).
c. A tool to find the CO2 footprint as well as the local emissions (and nuisance) of a single delivery (for different city-types) (WP2).
d. A tool (or manual) on setting up horizontal collaboration in urban environments (WP2)
e. A manual for creating a business model to initiate financially viable urban last mile deliveries (WP3)
f. A tool (or manual) for collaboration between carriers and the receivers (and in case it
is relevant authorities) (WP3)
g. An useable (easy to implement) architecture for a 4C for city distribution (all WPs under coordination of WP5).
Work distribution:
Proposed to hire TNO (for 60k euro in 4 years) in the person of Hans Quak. He will then be the valorization coordinator. The other WP leaders are involved in valorization (product development based on
the research as well as presenting at seminars and workshops).
Prof.dr. G. Kant : overall project manager
Dr. T. van Woensel: WP Consolidation and coordination at urban retailers and coordinator activity 4.
Dr. R. Peeters: representative WP Consolidation and coordination at logistics service providers
Dr. H. Quak: representative WP Consolidation and coordination at the city level (TU Delft) and responsible for valorization (i.e. activity 5 – TNO).
Expected results/deliverables/milestones:
Valorization plan (finished in month 3 after the Dinalog subsidy is granted. The valorization plan includes a overall plan for the 4,5 years the project runs and a specific action plan for year 1. The valorization plan as well as the execution of the plan is supervised by the steering committee (see D) of this
consortium. Implemented solutions, achieving the goals and results, as described in Section E.
Planning
Planning
2015-Q3
2015-Q2
2015-Q1
2014-Q4
2014-Q3
2014-Q2
2014-Q1
2013-Q4
2013-Q3
2013-Q2
2013-Q1
2012-Q4
2012-Q3
2012-Q2
2012-Q1
2011-Q4
2011-Q3
2011-Q2
In the figure below we give an overview of the project plan.
Activity 1
Activity 2
Activity 3
Activity 4
Activity 5
Overview of the project plan.
All relevant more detailed information can be found in the work packages descriptions above. We also
refer to the project organization described below as well as the evaluation and monitoring process that
is aligned with this project plan.
.
20
Role
4C Retail
4C LSPs
Leading
company
Core members
Other partners
Research
partners
ETAM Retail
Services
Ahold
TNT
ORTEC
ORTEC, TNO
PhD Consolidation and coordination at urban retailers
PhD Consolidation and coordination at logistics service
providers
TransMission
4C Business
Model
Cornelissen
MSc student
pool
TU/e
Valorization
Peter Appel
TransMission
TNO
All companies
All partners
TU Delft
All knowledge
institutes
TLN
TNO
TNO
21
C. Consortium and Project Organization
Research team (see Annex at the end for short CV and publications of the R&D Researchers):
Name partner
Role and input
Specific competence
Involved in managing large
projects, also in commercial and industrial context.
Expert on logistics in urban
areas and sustainable logistics
Expert in transport optimization, involved at EMLog
and TNT Go Academy.
Expert in optimization
techniques, also links to
gaming theory for pricing
Expert on logistics in urban
areas and sustainable logistics
Expert on logistics in urban
areas and sustainable logistics
Experience with supervision over many MSc students, in related projects.
TNO is the natural party for
valorization and knowledge
dissemination. Experienced person and expert.
Prof. dr. G. Kant
Overall project manager
Dr. T. van Woensel
Researcher WP1
Prof. dr. G. Kant
Researcher WP2
Dr. R. Peeters
Researcher WP2
Prof. dr. L. Tavasszy (TUD)
Researcher WP3
Dr. H. Quak (TUD)
Researcher WP3
Dr. T. van Woensel (TU/e)
Coordinator WP4 MSc Student
pool
Dr. H. Quak (TNO)
WP5 leader: Implementation
and knowledge dissemination
Dhr. G. Buitenhuis
Ahold
Manager Transport Europe
Dhr. M. Zwart
Cornelissen Transport
Director
Dhr. J. Otter
ETAM Retail Services
Manager Distribution Centre & Facility Services
Dhr. J. Poppelaars
ORTEC
Principal Consultant
Dhr. P. Appel
Peter Appel Transport
CEO and Owner
Dhr. P. Heijne
TNT
Project Director City Logistics TNT
Dhr. P. Tjalma
TransMission
Managing Director
Mevr. Drs. Ing. B.P.A.M.
van de Loo
TLN – KDN
Deelmarkt secretaris
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D. Evaluation and Monitoring
The project will be evaluated on the measurable outputs described above. Each PhD project follows
the evaluation process that is standard at universities. On top of that, we evaluate the progress
against the targets three times a year during our regular project meeting at Dinalog. This meeting
ensures that the individual projects are aligned, relevant information can be exchanged, in particular
with respect to empirical data for case studies and tools that can be implemented. This evaluation
process starts in Q1-2012, i.e. after a year. The 4C4D meetings start in Q1-2011 with a kick-off meeting to assess our objectives and to refine and adjust when needed. These meetings will also be used
to share best practices (from participating companies) as well as from other Dinalog projects (if applicable). Also during this meeting the valorization plan (WP5) will be presented and adjusted, if necessary.
We will set up a steering committee with representatives from the companies and universities involved (but others than the WP project leaders), and the director of Dinalog. The steering committee
meets every year shortly after the project meetings. The key role of the steering committee is to ensure that the Dinalog objectives are met. We propose the following evaluation and monitoring structure: the steering committee will supervise the project progress, based on project outcomes. The
steering committee will not supervise the academic progress, but the project outcomes, i.e. easy to
use manuals and tools based on the project planning and the valorization plan (see E. Valorization
and knowledge dissemination). Supervision on academic progress will be done by the PhD supervisors. The supervision will be based on the project planning (which has to be made after the project
subsidy is awarded by the work package leaders. The WP leaders will report the progress to the
steering committee and prepare the meetings. The steering committee reports to Dinalog.
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E. Valorization and Implementation Strategy
Valorization and knowledge dissemination
In financial project structure, money (60k euro) is reserved to hire TNO for valorization and
knowledge dissemination activities (see also activity 5, in B). The aim of the project is to make the
results easy to use, for example step by step frameworks or manuals on:
 how to use a business model to execute (sustainable) urban freight transport;
 how to collaborate between LSP
 a tool for evaluating transport and inventory decisions,
 etc.
The knowledge institutes make efforts (supported by ORTEC and TNO) to make easy and useable
products for carriers and retailers based on the academic results. This will also be supported by the
MSc students pool. TNO will actively support (not-participating) companies in using the developed
product (together with the developing knowledge institutes). These manuals together result in best
practices book, where all manuals are bundled and show cases are described. The participating
companies can direct research during the project meetings and at times researchers are working at
the participants´ or with the participants.
Valorization and knowledge dissemination are very important (according to the project participants).
Valorization and knowledge dissemination is a separate activity in this proposal (activity 5, see part
B) in which all project partners participate. After receiving the Dinalog subsidy, making the valorization plan is one of the first activities (see planning and activity 5). The consortium will hire TNO to be
responsible for valorization. We distinguish several activities:
 Make results available in academic world: the consortium partners will publish results in journals
and presents results in City Logistics conferences (responsibility of research partners).
 Make results available in Europe: city distribution and urban freight transport is a topic for many
European cities, governments (including the EU) and carriers. Organizations such as Polis and
Eurocities will be used to spread the results (TNO responsible, TNO already has a good position
to spread the results in Europe, due to the many European partners from European research projects). Next, TNO will bring in the results in other European networks and projects.
 The results are shared with institutes (or instances) in the Netherlands that are active in city distribution or the support companies that support SMEs in this field. The consortium partners have
good contacts with the Ambassadeur Stedelijke Distributie (for valorization useful until 2013, after
that year the ASD stops). The results will also be actively transferred to Agentschap.nl, CROW,
VNG and other institutes that are active in urban freight transport (advice), TNO will be responsible for spreading these results (obviously, other partners play a role here as well, TNO will coordinate the activities and steer by making, updating and following the valorization plan.
 Actively communicate results to companies active in city logistics.
For participating companies and start-ups valorization possibilities lie in:
1.
Consultancy and Advice on cross chain collaboration, such as:
a. Business models for collaboration in the last mile
b. (Collaborative) transport and inventory decision
c. Innovative urban freight transport solutions
d. Collaboration between LSPs
2.
Products:
a. Models
b. Manuals
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Implementation
The results of this research and development project have to be applicable for the participating companies. The private companies that are involved in this project are already leaders in innovative (city)
distribution, especially from a technological point of view. The outcomes of this project have to be
translated in workable 4C solutions that are applicable in cities, and that make the vehicle technological solutions more financially feasible in short term. Eventually a 4C company that (partly) coordinates the currently very fragmented final distribution in urban areas should be implemented (and
probably run by a LSP).
Concretely, this project’s outcomes will result in financially healthier city distribution solutions (year 2)
and cooperation between different LSPs (year 3) in last mile deliveries. Finally, the project results in
at least one 5C (a city cross chain collaboration centre), that differs from the existing city distribution
centre initiatives, which have failed frequently in the past. The 5C is run by one of the project partners
(year 4), for example: collaboration (due to coordination) between food deliveries and express deliveries in a city by a LSP (in electric trucks). The benefits of the collaboration and coordination deliveries in urban areas should be so evident, that (at least) the participating companies start to do so.
Possibly, extra budget is required to involve more partners in the collaboration, we intend to enroll
new partners in the 5C idea during the project.
Next, the consortium partners plan to implement new innovative ways to make urban freight transport
more sustainable. At this moment, we do not need extra funding for implementing these projects, and
in case extra budget is required, we plan to start (Dinalog) demo-projects.
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ANNEX CV’s of INVOLVED RESEARCHERS
Prof. dr. G. (Goos) Kant
Professor of Operations Management and IT – Tilburg University
Teacher at TiasNimbas Business School on Transport Optimization (EMLog and TNT Go Academy)
Managing Director and Partner at ORTEC
Editor-in-Chief STAtOR (Quarterly journal, focused on applications of scientific Statistics and
Operations Research results in practice).
Education
 Ph.D. in Computer Science – June 1993, Utrecht University, Subject: Network Optimization
and Graph Algorithms, Promotor: Prof.dr. Jan van Leeuwen
 M.Sc. in Computer Science – August 1989, Utrecht University, Supervisor: Prof.dr. Jan van
Leeuwen
Research
The research of Kant is mainly focused on transportation planning, linked to related processes as
inventory management and retail operations. Research includes both primary and secondary
transport, as well as operational and tactical planning. In the latter case, the goal is to optimize
the frequency and delivery days towards the customer, while balancing the utilized capacity over
the week and clustering the rounds per day. Kant has published over 20 papers in academic
journals, has over 150 citations in the last 7 years, and his h-index is 9. The research of Kant in
the last years involved Master Thesis projects at leading companies like TNT, Schiphol, Heineken, Coca-Cola and ORTEC. Kant was awarded as runner-up for the Global Franz Edelmann
Award 2007 (award for best applied optimization technology world-wide).
Teaching
Kant is responsible for the Master Course “OR/MS in Practice” at Tilburg University, involved in
teaching at the TiasNimbas EMLog and TNT Go Academy for transport optimization, as well as in
guest lectures at several other universities and institutes. Kant is involved in lectures at several
academic and non-academic conferences and seminars. He is co-author of the recently appeared
publication “Het Nieuwe Plannen”, based on the Dutch Logistic Price Award for ORTEC (2009).
Five Selected Publications
1. Hoendervoogt, A., G. Kant and P. Hulshof, Heuristic Approach for the Inventory Routing
Problem with Workload Balancing, Working Paper, Tilburg University, forthcoming.
2. Kant, G., M. Jacks and C. Aantjes (2008), “Coca-Cola Enterprises Optimizes Vehicle Routes
for Efficient Product Delivery”, Franz Edelmann Award Paper, Interfaces 38 (2008), pp. 1 –
11.
3. Kant G. (2006), “Ruim Baan! OR en IT in Transport en Logistiek”, Inaugural speech, Tilburg
University, The Netherlands.
4. Poot, A., G. Kant, A.P.M. Wagelmans (2002), “A savings based method for real-life vehicle
routing problems”, J. Oper. Res. Society 53 (2002), pp. 57 – 68.
5. Verweij, A.M. (2000), “Selected Applications of Integer Programming: A Computational
Study”, PhD. Thesis, Utrecht University, Co-promotor.
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dr. ir. ing. M.J.P. (René) PEETERS
Assistant Professor of Mathematics and Operations Research, Tilburg University
Education
 Ph.D. in Mathematics and Operations Research, June 1995, Tilburg University, Advisor: Prof.
Dr. Willem Haemers
 M.Sc. Technical Mathematics, June 1991, University of Eindhoven
Research
The research is done in the field of combinatorial optimization and combinatorial graph theory.
Especially complexity issues and applications of combinatorial optimization and linear algebra
techniques to graph theory have his attention. Together with Maaike van Krieken and Hein
Fleuren he worked on the development of a solver for the set partitioning problem.
Teaching
Peeters participates in a number of courses (Bachelor and Master level) as faculty in the Department of Econometrics and Operations Research in Tilburg University.
Five Selected Publications
1. Haemers W. and R. Peeters (2010), The maximum order of adjacency matrices with given
rank, submitted to Designs, Codes and Cryptography.
2. Van Krieken, M., H. Fleuren and R. Peeters (2004), A langrangean relaxation based algorithm for solving set partitioning problems, Center Discussion Paper 2004-44.
3. Peeters R., The maximum edge biclique problem is NP-complete, Discrete Applied Mathematics, 131, 651-654.
4. Peeters R. and P.J.B. Galesloot (2002), Estimating daily fat yield from a single milking for
herds with an automatic milking system, Journal of Dairy Science, 85, 682-688.
5. Peeters R. (2002), On the p-rank of adjacency matrices of distance-regular graphs, Journal
of Algebraic Combinatorics, 15(2), 127-149.
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dr. Tom VAN WOENSEL
Associate Professor of Operations Management and Logistics (Chair in Transporation Planning
under uncertainty)
Executive Board Member European Supply Chain Forum
Member of the OPAC Group board (responsible for Education portfolio)
Member of the BETA Research School for Operations Management and Logistics
Education
 Ph.D. in Applied Economic Sciences (Operations Management) - January 2003, University of
Antwerp, Advisor: Prof. Dr. Nico Vandaele
 Doctoral Program in Applied Economic Sciences - July 2000, University of Antwerp, degree:
Magna Cum laude
 M.Sc. Applied Economic Sciences (Quantitative Economics) - July 1997, University of Antwerp, UFSIA, degree: Cum laude
Research
The research is mainly focused on transportation planning under uncertainty and retail operations. Despite numerous publications dealing with efficient offline routing scheduling methods,
very few addressed the inherent stochastic and dynamic nature of reality. Consequently, we
mainly work in a priori setting, with a strong focus on adding stochasticity and dynamics related to
traffic congestion, customer demand, etc. into the company’s transportation decision problems.
He published over 30 papers in academic journals (including Management Science, Production
and Operations Management, Computers and Operations Research, Transportation Research,
European Journal of Operational Research, Journal of Mathematical Modeling and Analysis, and
International Journal of Production Economics) and several chapters in international books.
Teaching
Van Woensel participates in a number of courses (Bachelor, Master, Phd level and Executive
teaching) as faculty in Eindhoven and in the Université Catholique de Louvain. He also held visiting teaching appointments at the University of Antwerp (Belgium), Lessius University College
(Belgium) and the MIT-Zaragoza Logistics Center (Spain).
Five Selected Publications
1. Van Donselaar K., V. Gaur, T. Van Woensel, R.A.C.M. Broekmeulen, J.C. Fransoo, Ordering
Behavior in Retail Stores and Implications for Automated Ordering, Management Science,
forthcoming
2. Gabali, O., T. Van Woensel, A.G. de Kok, C. Lecluyse and H. Peremans, Time-Dependent
Vehicle Routing Subject to Time Delay Perturbations, IIE Transactions, forthcoming
3. Gür Ali O., S. Sayın, T. Van Woensel and J. Fransoo (2009), Pooling Information Across
SKUs for Demand Forecasting with Data Mining, Expert Systems with Applications, Volume 36, Issue 10, Pages 12340-12348
4. Van Woensel T. and F.R.B. Cruz (2009), A stochastic approach to traffic congestion costs,
Computers and Operations Research, 36, 6, pp. 1731-1739
5. Van Woensel, T., R. Creten and N. Vandaele, Managing the environmental externalities of
traffic logistics: the issue of emissions, Production and Operations Management journal,
Special issue on Environmental Management and Operations, 2001, Vol. 10, nr. 2
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Prof.dr. L.A. (Lori) Tavasszy
senior advisor Mobility & Logistics at the research institute TNO in Delft
Professor in Freight and Logistics at the Delft University of Technology
Prof. dr. ir. L.A. Tavasszy (Lóri) is senior advisor Mobility & Logistics at the research institute TNO
in Delft and Professor in Freight and Logistics at the Delft University of Technology. He studied
Civil Engineering at the Delft University of Technology with specialisations in transport modelling
and spatial development. He completed his PhD. study in 1996 on a strategic model of freight
transport flows within Europe. His research has since then focused on the modelling of linkages
between logistics, freight transport and spatial development.
He has extensive experience in project management for Dutch and European clients in the area
of logistics, transport forecasting and policy analysis. Member of Association for European
Transport; Chair of Committee, Freight & Logistics of the European Transport Conference; Scientific Committee Member Mo.Ve Mobility Forum (2003-2005); International Member of Transportation Research Board Freight Modelling Task Force (2005-2007); Board of Management Transport
& Mobility Leuven; Expert Member of National Council for Transport, Waterways and Public
Works; Member of ERTRAC (European Road Transport Research Advisory Council) Working
Group on Long Distance Freight Transport; NECTAR (Network on European Communications
and Transport Activities Research); Academic member of Logistics knowledge council of Dutch
shippers' association EVO.
Reviewer for various Journals and conferences (ETC, TRB, ERSA, WCTR, TVW, TRAIL, JTEP,
EJTIR, JTP, TRC); editorial board of EJTIR and Netherlands Transport Science journal, advisory
board of ETRR.
Awards: 1998 Yokohama Prize at World Conference for Transport Research in Antwerpen, Belgium Lectures on freight transport modeling and policy at the Faculty of Civil Engineering and
Faculty of Systems Engineering and Policy Analysis of Delft University.
Guest lectures abroad at several institutes (MIT Boston, MA; RAND, Santa Monica, Cal.; UCNL,
London, UK; UGD, Gdansk Poland; Leuven University, Belgium; RUG, Groningen, NL, DTU
Denmark, ITMMA, UFSIA, Antwerpen University).
Five selected publications
1. Tavasszy, L.A., Smeenk, B., C.J. Ruijgrok (1998), A DSS for modelling logistics chains in
freight transport systems analysis, International Transactions. in Operational Research,
Vol. 5, No. 6, pp. 447-459. Republished in K. Button, P.Nijkamp, A. McKinnon (eds), Classics
in Transport Analysis: Transport Logistics, Edward Elgar Publishers, 2003
2. Tavasszy, L.A., C.J. Ruijgrok, M.J.P.M. Thissen (2003), Emerging global logistics networks:
implications for transport systems and policies, Growth and Change: A Journal of Urban
and Regional Policy, Vol. 34 No. 4, pp. 456-472
3. Groothedde, B., C.J. Ruijgrok, L.A. Tavasszy (2005), Towards collaborative, intermodal hub
networks. A case study in the fast moving consumer goods market, Transportation Research E, Vol. 41 Issue 6, pp. 567-583
4. Koike, A., L.A.Tavasszy, K. Sato (2009), Spatial Equity Analysis on Expressway Network
Development in Japan, Transportation Research Record 2133, 46-55 Tavasszy, L.A, I.
5. Tavasszy, L.A., F. Combes (2010), Endogeneous value of time in freight transportation models, in: van de Voorde, E., T. Vanelslander (eds.): Applied Transport Economics, a management and policy perspective, Uitgeverij de Boeck: Antwerpen
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H.J. (Hans) Quak
advisor Mobility & Logistics at the research institute TNO in Delft
Assistant Professor in Technology, Policy and Management, section Transport Poloicy and Logistics’ Organization at the Delft University of Technology
H.J. (Hans) Quak Ph.D. has been working at TNO Mobility and Logistics from 2007 on. He
especially focuses on logistics in urban areas and the external effects. Besides he has been
involved in several research projects on sustainable logistics and the influences of external
factors (e.g. transport policy or climate change) on the logistics organization in companies. He
was project manager of the Transumo-project ‘Transition towards sustainable urban freight
transport’ and (co)authored several reports and papers on freight transport, logistics and (local)
policy in these areas (e.g. logistics hotspots in the Netherlands, city logistics and road pricing).
Hans is also appointed as assistant professor for one day a week at the Delft University of
Technology (Technology, Policy and Management, section Transport Policy and Logistics'
Organization).
Before, from 1997 to 2002 Hans studied Business Administration at the Erasmus University
Rotterdam after which he started as a Ph.D. candidate at the Rotterdam School of Management
in January 2003. In his Ph.D. research he focused especially on urban freight transport (city
logistics), urban access restrictions, sustainability and retail logistics. Hans successfully defended
his PhD thesis ‘Sustainability of Urban Freight Transport’ in March 2008. Hans published papers
in international top journals, such as Journal of Operations Management (best paper 2007 finalist
award) and Transportation Science. Next to the research activities, Hans was also responsible for
courses in the International Business Administration program. Hans presented his research at
several (international) conferences and published in international journals and (reviewed) books.
Five Recent publications
1. Quak, H.J. and M.B.M de Koster (2009). Delivering goods in urban areas: How to deal with
urban policy restrictions and the environment, Transportation Science, 43(2), 211-227.
2. Quak, H. J. and M. B. M. De Koster (2007). Exploring retailers' sensitivity to local sustainability policies. Journal of Operations Management, 25 (6), 1103-1122.
3. Quak, H.J. (2010, forthcomming) Urban freight transport; the challenges in making it more
sustainable, in C. Macharis en S. Maria Melo (eds.) Sustainable city distribution, NECTAR.
4. Quak, H. J., J. Van Nunen, and N. Agatz (2009). Customized policies for sustainable urban
distribution, in E. Taniguchi and R. G. Thompson (eds.), City Logistics V, 335-350, NOVA
Science Publisher, New York.
5. Quak H.J. and L.A. Tavasszy (2010, forthcoming). Customized solutions for sustainable city
logistics; lessons learned after one year Binnenstadservice, in: J. van Nunen, P. Rietveld en
P. Huijbregts (eds.) Transitions towards sustainable mobility, Springer, Berlin.
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