FUTURE INNOVATIVE PROJECTS

8.5.1 LINE AUTOMATION

There are some parts of the logistics warehouse that can be automated.

For example, in the area where large distribution cartons are stored, the sorting of finished products that arrive from Serbia also takes place. Different SKUs arrive with different characteristics between them (size, color, etc.), then the operators sort the different pallets and they are then taken to the warehouse.

In the future they want to create a line where instead of having unloading of the goods coming in from Serbia and several people sorting the different pallets by hand, they want to create a line where they directly unload these cartons and when they get to the bottom there will be bays that will sort the cartons according to SKUs, so people just have to pick up the carton and take them to the warehouse. This automates a part of the business, makes it faster, and there will be less use of people to do this unloading of goods coming from Serbia.

8.5.2 CIRCULAR ECONOMY AND SUSTAINABILITY PROJECTS⁸¹

81 https://www.ilgiornaledellalogistica.it/case-history/i-progetti-realizzati-in-golden-lady-company-economia-circolare-e-sostenibilita/

In recent years, Golden Lady Company has placed environmental sustainability and circular economy at the center of its business strategy by investing much of its human and financial resources.

Golden Lady Company has developed three types of projects aimed at environmental sustainability:

- Production of innovative environmentally sustainable yarns - Reduction of packaging use

- Use of environmentally friendly fuels for transportation

8.5.3 ENVIRONMENTALLY SUSTAINABLE YARNS

Most of Golden Lady Company's stockings and tights are made from two types of yarns: Polyamide and Polyester, synthetic fibers of fossil (petroleum) origin with textile characteristics superior to natural fibers but with a much lower cost.

The fibers are obtained through a process of polymerization, which is a chemical reaction that leads to the formation of the polymer chain, that is, a molecule consisting of a sequence of repeating equal parts, from simpler molecules called monomers.

At this production stage, the circular economy project was carried out by reusing waste yarns, used socks or yarns obtained from the processing of plastic materials, usually primary packaging that is no longer usable, for the production of new yarns to produce new socks and tights without resorting to the use of the fossil-derived polymer.

The use of these environmentally sustainable yarns also has a major impact on logistics inside and outside the company. The suppliers of raw materials change, which are no longer traditional chemical companies but companies that recycle and process waste plastics.

Internal logistics within plants aimed at recovering and accounting for all waste material and reconditioning it for easy collection, storage and transportation to recycling

companies change.

Thus, in the future, there will be an increase in logistics related to the collection of used plastics at the expense of purchasing and transporting virgin fossil and natural materials, such approaches require managing more uncertainties, as the supply and the quality of used materials cannot be forecasted like classical raw materials.

In partnership with Calzedonia, a project is already underway to create a yarn reuse line;

a machine will arrive in Casalmoro in December that will take used socks, split the elastomer from the polyamide, and with the recovered polyamide will be reused for other socks.

8.5.4 PACKAGING: REDUCTION AND REUSE OF PACKAGING

The finished product is packaged in many different types of packaging (primary packaging) depending on the customer, channel, country, location, etc.; each pack, produced by third-party suppliers, arrives at the plant contained in cardboard trays (fourth-tier packaging) stacked in wooden crates that allow for storage and internal handling in warehouses and departments.

Initially, the packs were stacked and delivered on wooden pallets, contained in

cardboard boxes, wrapped in a layer of stretch film. The fourth-tier packaging reduction project resulted in the replacement of the fourth-tier, protective, self-supporting

disposable cardboard packaging that wraps the packs in multiples of 500 packs and the stretch film used to stabilize the pallet, resealable and reusable wooden crates were introduced for storage and round trips with suppliers that contain the same number of packs but with a significant reduction in the paper flaps that separated the layers of stacked cartons.

This solution made it possible to go from a fourth-tier packaging waste of 24 kg of cardboard per 20,000 packs to a waste of 9 kg. Considering the plant in Casalmoro (Mantua, Italy), for example, produces and packages about 50 million pairs of socks per year, with the new solution the reduction of cardboard waste is around 40 tons/year and 1 ton/year of plastic film, as told by the Plant Director of this site.

Also, as the goods are taken from the gravity shelves, the cartons are emptied and at this point the workers throw these cartons on the ground, there is then an employee who picks up all these empty cartons. At one time, a few months ago, the empty cartons were thrown directly into the garbage, a separate collection was still done so it was still recycled but not reused.

Nowadays, on the other hand, the company recovers these cartons, opens them up, sorts them according to various sizes and brings them back to the packaging department so they can be reused. So there is no longer the use of the containers that used to come and pick up these cartons to recycle them because now the company continuously reuses them. Whereas before the company owned two containers to throw away the paper that were emptied every week, now they only have one container that is emptied every two weeks.

Another step they would like to take soon is to minimize the type of cartons, from 20 sizes to 5, so it will become easier to recycle and reuse them and therefore also easier management.

So, in addition to no longer throwing cartons away but recovering and reusing them, there are also plans to rationalize the number of carton types.

In a few months in this way there has been an obvious cost saving, about 20 to 30 thousand €.

8.5.5 USE OF ENVIRONMENTALLY FRIENDLY FUELS

In recent years, Golden Lady has revolutionized its transportation logistics. Until a few years ago, Golden Lady owned a fleet of 23 vehicles, which it used to transport goods to its main customers in Italy and Europe.

With the progressively increasing parcelization of sales volumes, increased frequency of deliveries and greater complexity of customer needs, Golden Lady necessarily had to turn to the specialized transportation market to remain competitive.

Transportation is handled by outside companies, the choice was made to completely outsource transportation using the couriers who best serve the routes they are interested in, this was done for pure savings and service improvement, so we could focus on the company's core business which is sock production.

But, also for ecological impact because when the company owned its own fleet, they would deliver the products to the customer and return empty and this was a waste of fuel and personnel. Since they have been using couriers, the saturation of the trucks is dedicated to those who do it for a living, so there is also a CO2 savings related to the fact that they have left this part to those who do it for a living.

The green turn that Golden Lady wanted to introduce in inbound transportation took the form of the purchase of its own vehicle powered by Liquefied Natural Gas. The

advantages of LNG over a Euro 6 diesel are significant, starting with a 15% reduction in fuel consumption, 70% reduction in nitrogen oxides, 96% reduction in particulate matter, and finally a halving of noise emissions.