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Business innovation

Knowledge Transfer Partnership (KTP) transforms a global logistics company's position in the multi-billion Third-Party Logistics (3PL) industry.

Hidden formula

Panalpina KTP Associate

Panalpina World Transport Ltd is one of the world's leading providers of supply chain solutions. The company combines products of air freight, ocean freight and logistics, to deliver tailor-made end-to-end solutions. To enhance their logistics provision the company sought a 'hidden formula' solution for lean inventories. This would enable them to buy and manage customer inventories and offer a unique logistics service to customers.

Part funded by a KTP grant, Professor Aris Syntetos, Professor of Operational Research and Operations Management, Cardiff Business School, partnered with the company to develop (and implement) an innovative business model, supported by a strong quantitative tool. This solution would:

  • develop a demand-driven inventory-forecasting tool to facilitate inventory reductions at customer businesses
  • develop a commercial model, enabling Panalpina to cost-effectively manage customer inventories.

The partnership recruited a KTP Associate, Nicole Ayiomamitou, to manage the project and transfer the academic knowledge and expertise into the company.

The partnership has produced some very exciting results. We have taken real inventory data from Panalpina and developed a very effective algorithm based on leading-edge mathematical thinking. As a result, we now have a new application that allows us to forecast the demand of a company’s products and plan their inventories accordingly.

Nicole Ayiomamitou Panalpina

Innovative solution

We have built a very strong relationship with Panalpina over the last few years through KTPs and Panalpina’s continuous contribution to our research, teaching and engagement activities. The partnership brings benefits not just in terms of sponsorship and funding, but by providing ‘real life’ case studies for use in our postgraduate courses and offering our researchers a taste of impactful research.

Professor Martin Kitchener Dean of Cardiff Business School

The KTP developed a new inventory forecasting application ‘Demand Driven Inventory Dispositioning’ (D2ID), a novel exercise in the industry which has transformed the way the 3PL business is conducted. This has helped Panalpina to analyse their customers’ supply chain and identify opportunities to reduce inventory, free up cash and improve service levels. With this tool, Panalpina has become the first global logistics company in the world to actively manage customers’ inventory.

Graded ‘outstanding’ by Innovate UK, the KTP has supported the University's longer term strategic partnership with Panalpina. A second project, a multi-Associate KTP, is about to commence which will focus on new manufacturing technologies and their impact on inventory management (such as 3D printed inventories). The company has also sponsored a seminar room at Cardiff Business School’s Postgraduate Teaching Centre and supported student placements and excellence awards.

In addition to this, developments are underway for a new Panalpina funded Logistics Research Centre at Cardiff Business School with the appointment of Professor Syntetos as the Panalpina Chaired Professor of Manufacturing and Logistics, who will oversee and coordinate the activities of the centre.