2. Sergio Barbarino Principal Engineer Procter & Gamble R&D February 12 th, 2009

3. 3 Three billion times a day, P&G brands touch the lives of people around the world

4. 4 Procter & Gamble – Globally Sales $83.5 Billions # Brands~300 # Billion-$ brands24 # of employees:138.000 # of Mfg sites:140

5. Study on Logistics Emerging Trends

6. 6 What will the future look like? My interest is in the future because I am going to spend the rest of my life there. Charles Kettering Inventor (1876 - 1958)

7. 7 Trends… Prediction is very difficult, especially about the future. Niels Bohr Danish physicist (1885 - 1962)Niels Bohr

8. 8 High volatility of World’s market  Crude price in last 36 months Crude price in last 3 months oil price unpredictability

9. 9 SUSTAINABILITY in every aspect of society and business ENERGY COST will influence business and consumer’s habits WORLD’S DEMOGRAPHY The developed world will have a very aged population, less available work force, more automation, request of services The developing world shows large population growth and the an increased presence of higher “western-like” living standard. IT SOLUTIONS visibility, tracing and automation 4 Emerging Trends 4 Trends

10. 10 TRENDS’ INFLUENCE Change in transportation mode Road transport volume will continue to rises Intermodal solutions to cover long distances No alternative to road for short distances Insufficient infrastructure capacity expansion Focus on efficient use of energy Risk of “whiplash effect”

11. 11 Less miles driving Maximization of capacity: Full truck load from 60 to 90% Innovation in packaging and pallet design 2 drivers Use for uncongested/cheap paths Use of mega-trucks TRENDS’ INFLUENCE

12. 12 Toughest legislation Limitation to reduce footprint Increase of security restrictions Prevention of road accidents and fatalities Container scanning TRENDS’ INFLUENCE

13. 13 Collaboration, pooling and outsourcing Vertical and horizontal along the supply chain Governments to influence local collaborative set-ups Co-location of suppliers, producers and competitors (Silicon Valley, Toyota City, automotive park in Munich) TRENDS’ INFLUENCE

14. 14 Localization and decentralization Reduction of total travelled distance (RM & FP): Reduce cost Improve environmental footprint Bypass transport capacity contraints Local “lean” supply chain from producer to customer TRENDS’ INFLUENCE

15. 15 Direct to customer deliveries Home/at point delivery efficient Increase of automation Innovative delivery solutions Last mile delivery Automation Innovative business models Home delivery TRENDS’ INFLUENCE

16. 16 P&G Logistics Operations in Western Europe > 50 Distribution Centers > 200 MM km’s/year > 70 MM Liters Diesel/year < 10% via Rail/Intermodal

17. 17 Centralized manufacturing - most categories have MORE THAN 1 manufacturing sites for the entire WE. Big portion of pallets move cross borders P&G Logistics Operations in Western Europe

18. 18 P&G Re-thinks Its Transportation Model What is our business going to look like in 2015? What if oil rises to 200$ per barrel? What if you cannot ship trucks on weekends? What if there are continuous road congestions? How do you still meet retail customer requirements?

19. 19 Rail/Intermodal, a Major Opportunity in Western Europe Our aim is to increase our rail transportation from 10% to 30% by 2015. Our Success criteria are: * Service, * Cost, and * Sustainability

20. 20 Lyon Project TINA T T rain, I I ntermodal … a N N ew A A pproach

21. 21 Rail/Intermodal Pilot Projects Two rail/intermodal pilot projects up and running since July 2008 Belgium - UK: Train Muizen – Zeebrugge UK/France/Belgium – Iberia: Train Dourges – Perpignan Both with great success

22. Video

23. 23 Excellent cooperation between shipper, container-operator and rail-provider → The key to success! Great win on sustainability without trade-off on cost and service Now ready to further explore intermodal on European scale Intermodal Pilot Belgium  UKWhat have we learned?

24. 24 What’s needed to expand rail/intermodal on a European scale? Infrastructure −Available at the right place −Harmonized European Network (Rail-Tracks, Safety systems, …)Service −Capacity −Lead-Time (Transit Time) −Reliability (On-Time)Cost −Affordable −Competitive with other transportation modesSustainability −Promote Success ModelsCollaboration −Shippers −Intermodal Infrastructure and Transportation Providers

25. Thank you