Picnic knows almost to the second just how long a delivery will take. With data including order size, weather conditions and even the position of the front door, the online supermarket can predict precisely how much time a runner (delivery driver) needs. ‘If the front door’s on the left, then it’s handy to stack the shopping crate on the left in the electric van. That’s only possible if we actually have data about the front door’s position’, notes Michiel Muller, co-founder of Picnic, opening the dialogue with Joyce Bliek, Digital Business Solutions Director with the Port of Rotterdam Authority.
In this new world, ports will not win by competing against each other, but can actually make a difference by cooperating in the digital arena
Bliek nods in agreement as Muller explains the essence of digitisation: mapping out business processes precisely to enable continuous improvement. ‘That’s what we do at Picnic. People are working hard every day to optimise small sub-processes. And that’s only possible because we’re fully digitised. Companies that aren’t digitised are driving through a dark tunnel. Often if their performance turns out to be below expectations in a given quarter, they really have no idea why. That’s not how things work for us. When we sit down with our investors at the end of the quarter we can present the background to the figures in detail, showing exactly which initiatives will produce improvements going forward.’
Digitisation is also vital for the Port of Rotterdam Authority. ‘For precisely the same reasons: so that we can operate more effectively and efficiently. And most importantly for the port: with more safety’, responds Bliek. She cites the reduction in the port’s waiting times as an example. ‘We’re investigating how to let vessels manoeuvre through the port more quickly. Many of those using the port constantly have to wait for each other. Why? Because they’ve all built-in a waiting time just in case things go wrong. Now that we can share and analyse data in real time, we can take better decisions earlier with these users, which helps us to make a difference.’
Picnic was founded as a supermarket with only an online channel, just four years ago. The Port Authority has its roots in a port whose history stretches back hundreds of years. Does this make things difficult? Bliek: ‘We’ve collected enormous quantities of data over the years, but only to keep the port running at its very best. To make real-time decisions based on data, as Picnic does, demands an entirely different type of operational management than we’re accustomed to in the port. A digital transformation of this type places huge demands on an organisation not designed for digitisation from the beginning.’ Muller agrees. ‘We began with a blank sheet of paper and with people who took digitisation as our starting point. That’s a distinct advantage over having to digitise an existing organisation.’
The average staff age in Picnic’s head office is below thirty, significantly less than at the Port Authority. Muller: ‘Age isn’t that important, actually, but what you do expect with young people is curiosity and a desire to conquer the world. They have also grown up in a digital world. They certainly cannot imagine a time, as I can, when we needed to find a public phone to make a call when travelling. Growing up in a digital world makes you think differently.’
Bliek is actively on the lookout for such ‘digital natives’, but she has learned a couple of tough lessons along the way. A few key digital talents left because they couldn’t make the difference they’d hoped to achieve. ‘We’re constantly looking for the best of both worlds. Although we do want to use the available knowledge, we’d like to view it through today’s digital lens. That works best when you assign someone who knows the business, to work alongside a person with digital skills. Then both need to have an innate curiosity, but at the same time the desire to make a difference in this new digital world. I’m constantly making those matches.’
For Bliek, Picnic is the ultimate example of a company which could create the right business culture. A culture where staff use data to create the transparency and insight needed to achieve continuous improvement. Muller reaches for his phone immediately, opening an app offering information for each hub (local distribution point) on issues like the number of orders, new customers and whether deliveries have been on time. ‘Everyone has access to this data. If we think the data shows it’s important to improve our processes, everyone has to be able to participate. Everyone can identify points for improvement in their own work, through their own experience and knowledge. For example, it was customers in our fulfilment centres who came up with the suggestion to stop placing the most popular items on the top shelves, which kept creating bottlenecks. An econometrist wouldn’t always notice that from behind his computer screen.’
Growing up in a digital world leads to a different way of thinking
Picnic can also learn a lot from the Port Authority. Muller: ‘Of course the Port Authority has been around for decades, and has taken a global lead in port digitisation. What Rotterdam does really well is to use that knowledge, skill and technology in creating other business models.’ Among them he mentions the start-ups in which the Port Authority invests, and the digital tools the Port Authority makes available to other ports. One such example is Pronto, a platform monitoring incoming and outgoing shipping traffic to achieve the best possible coordination of activities like berthing, loading, unloading and bunkering. The first Pronto pilot projects have now started in other ports, in cooperation with Shell and Maersk. Muller: ‘We’ve just launched a partnership with Nespresso to supply and collect coffee cups. We’re also looking into taking returns from online stores like Wehkamp. We’re only at the start with all this. We’ve built a complete infrastructure of our own, and we can also use this to help third parties.’
For both Picnic and the Port Authority, not only does digitisation lead to optimising their own processes, but it achieves this for the entire supply chain. Bliek: ‘Companies gain more insight into the supply chains running through our port. When companies like Nike or Dole have a better ability to predict and plan their flows of trainers or bananas, they can operate much more effectively and efficiently and deliver just-in-time. They’ll then know when it’s smarter to send freight by road or inland shipping. Digitisation is a must if we want the supply chains that run through our ports to be competitive.’
Bliek continues: ‘Does digitisation also help us to compete successfully with other ports? It’s actually the new parties in the industry who are causing the competition in the digital world, just as Picnic is a new competitor in the retail industry. Ports will not win out in this new world by competing against each other, but can in fact make a difference by cooperating in the digital arena. The Port of Rotterdam is part of a global network. Our clients also visit other ports. Together we can help them to be effective, safe and efficient worldwide’.
Muller believes many improvements can still be achieved in Picnic’s supply chain. Among these are predicting demand. ‘The data from our loyal customers tells us fairly accurately just what we’re going to sell next week. Suppliers can already attune their processes to this. Making good predictions increases the reliability, quality and efficiency of the supply chain. It’s a challenge that we’re sometimes working with chain partners who are not as digitised as we are. These are the people we need to help.’
Muller and Bliek agree that digitisation will completely change their sectors, although the changes sometimes appear to progress agonisingly slowly. Muller: ‘With Picnic, we operate in a huge market where small shifts have a tremendous impact. The online sale of food has grown from 1 to 3 per cent of the total food market in just a few years. What if that share grew to 10 or 20 per cent? This will have huge consequences for traditional business models.’
As well as the digital transformation, the Port Authority is also dealing with the energy transition. ‘The port as it is right now will no longer exist in thirty years’, notes Bliek. ‘The question is not whether this change will come, but at what rate. We’ve seen both national and international investment companies injecting hundreds of millions of euros into logistics innovations over the past year and a half. That’s a sign that digitisation is now gaining momentum.’
What do companies still needing to move to digitisation have to do? ‘First map out all the existing processes. Divide up all these processes and select the parts where that first step would be the easiest. Show successes, whether they’re cost savings, sustainability or convenience’, advises Muller. ‘Set up your own testing ground and start experimenting. Be sure to employ people who can make a difference with digitisation’, adds Bliek. ‘And simply start. The best time to make a start on digitisation was yesterday. The next best time is today.’
Picnic is the fastest-growing food retailer in the Netherlands and Germany. Customers order their shopping through the Picnic app, with free home delivery using a sophisticated distribution model. Picnic launched in Amersfoort in 2015 with four delivery vans. Now it has 800 vans driving to a strict schedule daily for customers in 100 cities. Picnic began in 2018 in the German state of Nordrhein-Westfalen, delivering in cities including Duisburg, Düsseldorf, Bochum and Mönchengladbach.
Born entrepreneur Michiel Muller (b. 1964) was one of the founders of several disruptive companies like Route Mobiel (vehicle breakdown service) and Tango (unmanned fuel stations). He founded Picnic in 2015 with Joris Beckers, Frederik Nieuwenhuys and Bas Verheijen, and the company was proclaimed as the fastest-growing one in the Netherlands in 2019. Alongside being an entrepreneur, Muller is also an investor and chair of Erasmus Trustfonds, the Erasmus University Rotterdam Fund.
Change Manager Joyce Bliek has been with the Port of Rotterdam Authority for 17 years. She began as a consultant and was responsible for the Port Authority’s container and breakbulk activities for seven years. In 2015 she was invited to establish Rotterdam Logistics Lab, a corporate start-up to accelerate developments in the port using new digital technologies. Within the Port Authority she has been Executive Manager of the Digital Business Solution Unit since January 2018, and is responsible for digital change.