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Reducing emissions requires efficient supply chain solutions


Reducing emissions requires efficient supply chain solutions

In November 2021, the United States Department of State and the United States Executive Office of the President released a new long-term strategy for reducing CO2 emissions. The report laid out the ambitious goal of achieving net-zero emissions no later than 2050, which will require significant change, adaptation, and transformation across almost every sector, and in particular the manufacturing and transport industries.

These ambitious targets build on last year’s summit, where the US pledged to reduce net greenhouse gas emissions by 50-52% in 2030, in line with the European Council’s requirements. According to experts around the world, these new, increased goals are essential when it comes to meeting objectives set for the middle of the 21st century.


Around the world, the food and beverage sector is responsible for about one third of all greenhouse gas emissions, largely due to their complex supply chains. Without taking significant action to address supply chain emissions, meeting emissions targets will be a challenge. Mitigation efforts will require a significant shift in the way supply chain issues are considered within the sector, particularly when it comes to agriculture and land use.

The largest direct source of greenhouse gas emissions, is the US transportation sector, having overtaken the power sector back in 2015. It is responsible for 29% of all US greenhouse gas emissions, according to an EPA report released in 2021. As part of the drive towards Net Zero, President Joe Biden signed an Executive Order on Strengthening American Leadership in Clean Cars and Trucks in December 2021. This set a target of 50% of cars and light trucks to be zero-emissions by 2030 and directed NHTSA to finalize emissions targets for medium- and heavy-duty vehicles by December 2022.

These strategies, targets, and directives are a clear indication that the US approach to CO2 emissions is hardening, and that decisions are being made that will have significant impacts on those responsible for supply chains.

However, reducing emissions is not solely linked to vehicles, and clean technologies and lower-emission cars and trucks cannot be the only solution, even in the transportation sector. A huge part of achieving these ambitious goals will come from significant improvement in efficiency throughout the entire logistics process, including, of course, the decisive areas of warehouse and transport management. Warehouse management solutions (WMS) and transport management solutions (TMS) have become key elements that not only improve general efficiency, but are also essential to creating a more effective and seamless supply chain process, optimizing transportation and, in turn, reducing emissions.

Warehouse management solutions

The warehouse is the heart of the entire logistics system, and its management has a direct impact on the rest of the links in the supply chain including, unsurprisingly, on transportation. An effective WMS not only guarantees more efficient use of physical warehouse space but also optimizes the movement of goods and materials inside the warehouse, ensuring cost savings and reduction of emissions right from the outset. But a WMS is not just about managing what goes on in the warehouse itself. It improves the organization of transportation and creates significant improvements in this area by synchronizing warehouse operations with arrivals and departures of carriers, transferring the newfound efficiency of the warehouse to transport, and onwards to the entire supply chain.

Transportation Management Solutions

Increased focus on emissions and environmental improvements reinforces the strategic value of TMS tools as well. According to analysis by Gartner and Supply Chain Digest, among others, TMS tools can offer immediate savings of anywhere between 15% (for the annual transport costs) and 30% (for personnel and management). Greater efficiency also undoubtedly has an effect on the reduction of emissions throughout the entire logistics chain. The two-pronged benefits of using technology to improve your supply chain operations is a decisive element for companies in the immediate future.

Transportation and Climate Initiative

Many leading companies looking to take proactive and practical steps towards decarbonization participate in the Transportation and Climate Initiative (TCI), a scheme similar to the European Lean & Green platform. The TCI is a regional collaboration of 13 Northeast and Mid-Atlantic states and the District of Columbia that seeks to improve transportation, develop the clean energy economy, and reduce carbon emissions from the transportation sector.

As with the Lean & Green initiative in Europe, many companies who operate under the jurisdiction of the TCI take advantage of Generix’s WMS and TMS solutions to achieve greater efficiencies in warehouse and transportation management; solutions without which it would be extremely difficult to reduce and ameliorate the energy costs of transport.

In short, logistics is in the process of a significant transformation to meet the demands of an increasingly demanding market, as well as to address environmental targets and requirements. There are a number of technological tools already standard in the world of logistics that have completely changed the productivity of the sector, and which will be essential to be able to take the next steps towards productivity, efficiency, and decarbonization.

For the manufacturing and transport industries, the path to Net Zero does not have to be a painful one. The tools and processes that are vital for reducing emissions also come with significant benefits and improvements for productivity and efficiency.

Supply chains are central to the fight against climate change. Decarbonization and emission reduction efforts also help improve sustainability, as well as making supply chains more resilient for the future.

If you want to reduce your carbon footprint through our solutions, contact us!

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.


SFM Prepares for the Future and Surpasses Industry Benchmarks

Business is booming and the warehouse is bustling with activity. For some reason, however, productivity levels are well short of targets. No matter how much labor is thrown at the problem, the gains in throughput are marginal at best.

SFM is a distributor of Pro Audio & Pro Visual live entertainment and media production equipment that operates a 50,500 sq. ft. warehouse in the heart of Montreal Island. When management had to find ways to redress the company’s productivity levels, they turned to LIDD Consultants for solutions. 

SFM asked LIDD to find out why throughput levels were not meeting expectations and to make recommendations to improve their operation. Among the recommendations were various design and engineering solutions as well as the implementation of a Warehouse Management System (WMS).

What follows is the story of how the consultants transformed SFM’s operation, leveraged the powerful Solochain WMS, and enabled the distributor to greatly surpass industry benchmarks in just a few weeks after the new WMS went live.

LIDD Consultants Protects SFM’s Capital

SFM’s management knew that they could no longer delay when they lost their capacity to keep their “Same Day Shipping” promise. An effective marketing tool for the company that generated demand and had enabled growth, the promise had also been a way for the distributor to stand out in a fiercely competitive industry.
LIDD was therefore called upon to assess the following issues:

Insufficient throughput: 

-Productivity levels are well below industry standards.

-Same day shipping is no longer possible.

Inaccurate inventory counts:

-Wall-to-wall physical counts take a month to be completed instead of a weekend.

-The reconciliation of these counts with system data is impossible to achieve.

Many at SFM thought that the cause of their problems was that they had outgrown their warehouse’s capacity. With a multi-channels operation and 12,000 SKUs stored in a 50,500 sq. ft. facility, it was a plausible hypothesis. Insufficient storage space could explain why warehouse employees were stepping on each other’s toes in the aisles, why items were being put away in available locations instead of their designated slots, and why productivity levels and inventory accuracy were suffering.

Of course, were that hypothesis true, SFM would need new real estate, which comes at high expenditure.

Thanks to LIDD’s audit, however, SFM was able to protect its precious capital. LIDD’s analysts demonstrated that the current facility had the needed storage capacity and that the causes behind. SFM’s problems mainly were:

Inefficient warehouse processes:

-Excessive clerical work at reception slows activities down and causes congestion around the dock.

-Inconsistent replenishment activities and inaccurate inventory management are affecting picking efficiency.

Suboptimal layout:

-Inconsistent rack profiles and difficult to access storage areas make picking complex and slow.

Inadequate software architecture:

-SFM’s systems lack the functionalities needed to properly support activities in the warehouse and to keep precise track of inventory.

LIDD made recommendations to redress the situation within the current facility, saving SFM’s capital from being squandered on expensive real estate. LIDD then implemented the design solutions, which included:

1. A new facility layout
2. New rack profiling
3. Optimized pick paths
4. Ergonomic packing station 

LIDD Leverages Solochain’s Functionalities

The design solutions implemented by LIDD significantly improved SFM’s operation. The distributor’s inadequate software architecture was however preventing its operation from reaching the productivity standards set by the industry.

Following on the consultants’ recommendations, SFM tasked LIDD with the implementation of Solochain, a powerful Tier 1 WMS by Generix, and its integration with their JD Edwards ERP system. LIDD experts knew that the built-in flexibility and inventory management capabilities native to Solochain made the WMS a particularly good fit for SFM’s operation.

For one, Solochain excels at streamlining inbound processes, a notable thorn in SFM’s foot. It eliminates most clerical tasks and manual data entries, which prevents errors, delays, and congestion at the receiving dock. The system also produces real-time receipts for received items and systematically verifies goods received against goods ordered, keeping databases clear of problematic discrepancies.

By enabling inventory consolidation at reception, Solochain also simplifies putaway activities. Putaway is also made more efficient thanks to automatically created tasks that indicate the localization for each product and instruct workers on FIFO inventory.

Meanwhile, Solochain’s profiling capabilities enable more efficient picking methods, such as batch-order picking. Picking activities can be further optimized thanks to the system’s wave planning capability, which groups into waves orders that share the same transporter, exercise date, and/or destination. Management also benefits, as warehouse managers can monitor an order’s status in real-time, from anywhere.

Once a SKU has reached a predetermined quantity threshold in a given slot, a replenishment task is automatically created. All replenishment tasks indicate where items are to be picked, which saves workers time and guarantees that inventory is well managed. The system can also prioritize tasks relative to established thresholds for specific SKUs.

Meanwhile, Solochain’s powerful inventory management module offers SFM the solutions it needs to regain control over its inventory:

-Provides visibility into inventory by item, location, zone, and inventory status;

-Assigns inventory conditions such as ‘Serviceable’, ‘QAonHold’, ‘Rework’, etc.;

-Automatically attributes product property upon reception;

-Dynamically updates the ERP system when inventory is modified;

-Assigns each SKU a specific slot and integrates the localization’s dimensions;

Tracks lot and serial numbers.

Solochain also supports the execution of inventory counts, which had been the cause of many headaches for SFM’s management. One way in which the WMS helps attain greater accuracy is through the configuration of special cases, such as product-class specific tolerance, second counts for specified sets of SKUs, and products for reconciliation. Another great feature is that it can schedule daily inventory count tasks, which makes it possible to avoid costly wall-to-wall counts altogether.

Blowing All KPIs Out of the Water

Solochain went live at SFM on September 9th, 2019.

Only three weeks after it was launched, SFM’s operation was reaching productivity levels well above all industry benchmarks.

A clear sign that things were looking up was seeing SFM almost immediately regain the capacity to honor their “Same Day Shipping” promise. Today, the distributorships an average of 30 order lines/hour, well above the industry standard for excellence set at 21 lines/hour.

Other outstanding KPIs include:

-Items make it from dock to stock in 87 minutes on average.

-Pick-lines are picked at a rate of 19.3 per hour – the industry standard for excellence is 16.2 lines/hour.

-SFM ships close to 99% of their order lines on the same day.

-The shipping error ratio has been brought down to 0.017%.

SFM’s inventory accuracy problems were also quickly solved. Since launching Solochain, the distributor has maintained inventory accuracy levels above 99.6%. SFM has also eliminated wall-to-wall counts in favor of daily count tasks, thus saving on resources, time, and money.

Worthy of note: Solochain’s levels of accuracy at SFM are such that, when Deloitte performed SFM’s audit at the end of the fiscal year, the auditor did not request a new wall-to-wall count. Instead, Deloitte entirely relied on SFM’s available systems data — a first in Deloitte’s Canadian audit practice!

Looking to the Future

When Covid related restrictions forced markets everywhere to a partial shut down, SFM had to layoff almost half of their warehouse employees. Yet, with Solochain to support their activities, their productivity levels during that period were down by only 5%.
Today, as the world slowly returns to a semblance of normal, SFM is preparing for the future. Thanks to a redesigned facility, re-engineered processes, and an upgraded software architecture, the distributor now has every confidence it can double its revenues over the next five years.

A significant portion of the projected revenues is expected to come from a new 3PL channel dedicated to the distribution of Pro Audio and Pro Visual equipment from major manufacturers worldwide. Opening this new channel, says management at SFM, would never have been possible without the help of LIDD Consultants and the Solochain WMS.


About Generix

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. From Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) to Manufacturing Execution Systems (MES) and more, software platforms can deliver a wide range of benefits that ultimately flow to the warehouse operator’s bottom line. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

About LIDD

Founded in 2009, LIDD is a global professional firm that provides supply chain advisory, technology, and design services to supply chain operators. Companies in the consumer products and retail industries turn to LIDD to leverage the firm’s whole-spectrum expertise in planning, manufacturing, and distribution operations.

With offices in Montreal, Los Angeles, Toronto, and Seoul, LIDD counts over 90 employees. The firm’s experienced consultants and engineers bring global best practices, excellence in project management, and an obsession with timeliness to all their projects. LIDD is committed to the development of strategies that drive growth and leads complex implementations to successful results.

From facility engineering to network design to software selection, capital is precious. Make LIDD part of your success story. Visit us at Join LIDD’s community on Facebook, LinkedIn, & Twitter.