Reducing emissions and transportation costs

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.

To achieve this, Kinaxis and 4flow have partnered to build a native embedded RapidResponse application that integrates transportation optimization earlier into sales & operations planning processes (S&OP) to leverage the power of concurrent planning.

The increasing importance of transportation management today

In today’s supply chains, transportation is becoming increasingly important. Optimized transportation processes that are integrated into S&OP planning have a significant impact on process efficiency, overall costs and sales successes for customers in many industries.

Transportation makes up a large part of the overall end-to-end supply chain. Depending on the industry, transportation costs can be up to 200 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 your 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.

More sustainability and lower transportation costs – Advantages of planning with the transportation optimizer

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

The switch from conventional S&OP solutions to Kinaxis enables companies to know sooner and act faster while also considering transportation constraints.

While legacy S&OP systems just improve approximate transportation utilization, the TLO 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 impact on inventory and availability is taken into account.