Lenzing's Digital Supply Chain Strategy will Focus on Sustainability

By Logistics Tech Outlook | Friday, March 27, 2020

Robert van de Kerkhof, Chief Commercial Officer, Lenzing

Optimizing earnings and sustainability, a producer of high-quality fibers from sustainable materials creates a digital supply chain initiative.

FREMONT, CA: As Lenzing Group has established its name around generating high-quality fibers from sustainable products such as recycled wood and cellulose fibers, the organization is no stranger to sustainability. When it decided to focus on its digital supply chain transformation, sustainability in addition to profitability and end-to-end supply and demand visibility was crucial. With all this in mind, Lenzing chose to deploy JDA Sales & Operations Planning from JDA Software, to boost the complexity of its supply chain system, fueling its development and management position while promoting operational efficiency.

Based in Austria, Lenzing supplies the global fashion industry with high-quality specialty fibers. Its botanical cellulose fibers, which promote the manufacturing of textile and nonwoven products, are renowned for their creative characteristics, including a lesser effect on the environment relative to conventional materials.

Lenzing has manufacturing sites in all major markets and a network of sales and marketing offices around the world. The prosperity of the company is based on consistent customer orientation in combination with innovation, technology, and leadership in quality. Dedicated to the values of sustainable management with very high environmental norms, Lenzing is one of the most sustainable companies in the industry with countless global sustainability certifications for its business processes.

“The fashion industry is the second largest polluter on a worldwide basis,” said Robert van de Kerkhof, Chief Commercial Officer, Lenzing. “Not only do the production processes generate waste, but the end products are typically not biodegradable and are rarely recycled. Lenzing's goal is to leverage innovation in both our products and processes to minimize our environmental impact, while still meeting the dynamic needs of our customers and the end consumer. So it was very important that our supply chain strategy with JDA supported sustainability as well.”

The objective of Lenzing was to produce an end-to-end scheduling method that fits demand and supply exactly, minimizing inefficiencies and maximizing profitability. JDA Sales & Operations Planning addresses these requirements by adopting a cross-functional strategy to integrated company scheduling that combines all moving components across the supply chain with a mutual focus on meeting market-wide demand, with a focus on both instant and long-term strategic objectives. Lenzing has substituted its current instruments like Excel spreadsheets and manually intensive procedures with JDA Sales & Operations Planning to handle its complicated business model.

“We got our cloud-based JDA deployment up and running quickly, which helped us rapidly realize a return on investment. For example, we reduced planning and decision-making times by 50 percent, leveraging JDA's what-if tactical planning capabilities and improved profitability as critical resources were allocated to the most financially promising markets and product applications. And, most importantly, as forecasting accuracy improved, we minimized waste, and the entire supply chain became leaner,” said van de Kerkhof.

This unique level of transparency and visibility helped Lenzing understand the customer and end-user needs, generating a more precise prediction and a much more flexible and responsive supply chain. With a new level of decision support and cross-functional alignment, the organization transformed its S&OP system effectively, fueling its growth and management role while also driving operational efficiencies.

“Lenzing is a best-in-class example of a company that truly understands its customers but also the importance of reducing its environmental footprint and making a difference,” said Johan Reventberg, President, EMEA, JDA. “Keeping sustainability top of mind with its vision for its supply chain transformation was critical, and we are proud to have supported Lenzing on their journey.”

As part of its practical application of JDA Sales & Operations Planning, Lenzing considers the opportunity to transform its own company, as well as the entire fashion industry, through digital techniques such as JDA's. Their objective is to increase connectivity and collaborative capacities outside their company by building closer ties with their supply chain partners to leverage JDA alternatives. Lenzing ultimately envisages linking the entire value chain and minimizing its effect on the environment. 

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