Integrated software platform supports supply chain redesign

Lennox International is a manufacturer of high-efficiency HVAC systems for commercial and residential customers. After evaluating its supply chain, the company adopted a software platform (Manhattan Associates, manh.com) that provides end-to-end supply chain commerce integration.

Since Lennox owns all of its distribution, it is a manufacturer as well as a national distributor. Lennox implemented an enterprise resource planning (ERP) system but still needed a distribution system to support strategic changes. Lennox redesigned its supply chain to move from a national distribution network to a more regional distribution, hub-and-spoke network to support more than 6,000 dealers and 140 company-owned service centers.

“We needed an integrated system that would work with the transportation system, warehouse management system and labor management. This new system drives our processes to be more disciplined and that, in turn, improves our accuracy,” says Keith Nash, vice president of supply chain logistics. “Because of the redesign, our quality is higher, our costs are lower and our customer cycle time is definitely lower.”

Nash says the software dissolves operational silos, breaks down the walls between channels and promotes holistic and strategic decision-making. In the three years since the redesign, the company has seen a more than 50% increase in productivity, an improvement in shipping accuracy from 98% to 99.97% and an increase in inventory accuracy from 97.5% to 99.53%.

Nash says the company is moving into using the supplier’s supply chain event management system, which will give customers visibility to milestone events including the exact arrival time of the product.