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27 Aug 2021


Reduce emissions and transportation spend, integrating transportation optimization into S&OP processes

Dr. Marc Schleyer
Kinaxis


The past year has drastically changed not just our daily lives but also the way we do business.

The supply chain industry has had to face significant new challenges caused by multiple national lockdowns and an overall transformation in the market needs and mindset. But this time of tremendous challenges has also opened up new opportunities – across all sectors, supply chain decision-makers have recognized the growing importance of establishing enhanced supply chain transparency, digitization and efficiency.

But how can these be ensured in a dynamic market environment? The answer lies in gaining broader transparency through end-to-end supply chain processes, adopting the newest technology and keeping an eye on innovative solutions.

To achieve this, Kinaxis and 4flow have partnered to build a native embedded RapidResponse application that could integrate transportation optimization earlier into the supply chain and enable S&OP processes to leverage the power of concurrent planning.

But let’s set the scene before we dive into the details of our new solutions.

 

Increasing importance of transportation today

In today’s supply chains, transportation is becoming increasingly important. This has a strong impact on process efficiency, overall costs and sales successes for customers in many industries.

In fact, transportation makes up a large part of the overall end-to-end supply chain. Depending on the industry, transportation costs range from 30 to 60 percent relative to warehousing costs.

Semiconductor shortages, extreme weather, container availability, fuel shortages due to pipeline cyber attacks, closed borders and pandemic lockdown restrictions – businesses are facing unprecedented challenges globally across their supply chains. All modes of transportation have been constrained with issues such as significant spikes in demand, rising fuel costs, reduced available transportation capacities and challenging extensions of transit times and delays. 

Now more than ever, companies need to incorporate transportation optimization into their supply chain planning and S&OP processes. Having the right tools to secure material availability, increase shipment utilization and ultimately reduce the number or required shipments in the supply chain is crucial for success.

 

Emissions reduction, sustainability and its strategic priority

Considering transportation constraints early in the S&OP processes helps businesses to achieve more efficient results and reduce costs while also reducing emissions.

With the current global commitment to net zero carbon emissions, sustainability has become a strategic priority for the industry. As mentioned by a study in The Guardian, this has reached the point that sustainable corporations now even perform better financially than the competition.

 

Combining the power of concurrent planning with transportation and load building optimization

But what does this theory mean in practice? Well, welcome to the Kinaxis Transportation Load Optimizer by 4flow.

The Transportation Load Optimizer is a new Kinaxis RapidResponse application designed to drive efficiency and significantly reduce freight spend and CO2 emissions for greater sustainability.

It brings the power of transportation and load building optimization to concurrent planning. This enables companies to know sooner and act faster with Kinaxis while also considering transportation constraints.

While legacy S&OP systems just improve approximate utilization, the Transportation Load Optimizer shifts and groups demands to minimize total logistics costs.

By adding an automatic step within the netting, the Transportation Load Optimizer reduces transportation spend and CO2 emissions. Shipments are preponed and postponed, consolidating scheduled receipts and creating fuller, more efficient loads. The applied optimization algorithms are based on real-world constraints, including freight rates and actual transportation capacities, leading to actionable planning results. Additionally, this reduces the need for manual intervention when creating call-offs.

Planning with Kinaxis RapidResponse and the Transportation Load Optimizer by 4flow. Example of inefficiencies of planning without transportation constraints versus with transportation constraints.Benefits of Kinaxis Transportation Load Optimizer by 4flow: Improved efficiency, lower transportation spend, better asset utilization, lower emissions.

 

See what’s possible

Full transparency and efficiency in your end-to-end supply chain processes is now possible. To see how your company can gain a more accurate view of its load transportation costs to improve sustainability and profitability, check out our brochure or watch our recent Transportation Load Optimizer webinar.

 

 

 








 

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News & Trends
 

Last update 10 Mar 2023
Global manufacturing output returns to growth as supply chain constraints ease and mainland China reopens
   Source: J.P.Morgan Global Manufacturing PMI   -  IHS Markit



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