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The Perfect Balance: How To Manage Inventory As Sustainably As Possible

warehouse with stacked boxes

Do you know how much waste your business accumulates each year? 

Today’s consumers are hyper-aware of the state of the environment. They’re motivated to take action and willing to break ties with companies that don’t incorporate sustainability into their operations. 32% of consumers in the United States prioritize supporting companies actively working to reduce their environmental impact.

All of this means that failure to manage your business’s influence on the environment can cost you time, money, and loyal customers.

Inventory optimization and proper demand planning combined with green warehouse practices can reduce your organization’s waste and lead to a cleaner future. Not only is this a win for the environment, but you’ll save your business money as well. 

Keep reading to learn more about sustainable inventory management best practices.

Work With Local Suppliers and Vendors

Working with local vendors and suppliers can offer your company many benefits. First, you stand to save on gas emissions for transportation and energy consumption when your supplier is close by. You can also reduce downtime while increasing order fulfillment efficiency by working with local suppliers. 

Plus, inventory snafus are easier to fix when your supplier is local—you can avoid overstocking and stockouts by keeping just enough inventory on hand.

If working with local vendors isn’t an option, you can take some pointers from companies like Nestle. The Nestle Responsible Sourcing Standard is a document that describes the company’s efforts of encouraging responsible practices in its supply chain. In it, Nestle asks its partners to meet non-negotiable sustainability standards and procedures.

If you can identify potential strengths and weaknesses within your supply chain, you can create or revamp effective, sustainable inventory management practices.

​​Understand Customer Behavior

If you want to practice sustainable inventory management, you need appropriate sales forecasting and business analytics tools. These can help you optimize inventory and ensure you’re not overpaying for products that won’t sell. 

Inventory management tools combine sales forecasting and integrated business intelligence functionality so that you get a birds-eye view of your business operations and data. 

Run an Eco-Friendly Warehouse

You can’t sustainably manage inventory if you run an inefficient warehouse. Green business practices begin with the structure that houses your most valuable assets—your products. 

Reduce, Reuse, Recycle

The “three Rs” can help you cut down on the amount of waste your business generates. Applying these simple principles inside of your company’s warehouse can go a long way.

First, focus on increasing the life of your packing material. You can organize bins to recycle everything from packing peanuts, cardboard, bubble wrap, paper, and plastic. Today, most companies ask customers to return orders in their original packaging material. This is because you can reuse this collapsible material many times. By reusing materials like this, companies save money and reduce waste, which is the first step to managing inventory sustainably.

Utilize Solar Power

Renewable energy is the cheapest source of power, and solar power is becoming more popular than expected. By 2040, experts estimate that solar power will become more affordable than natural gas and coal. 

Solar-powered lighting options provide sustainable, safer lighting. They also have a longer lifespan than traditional fixtures, so you won’t need to worry about replacing your lights every couple of years.

Retail giants like Amazon know this, which is why they’ve deployed solar systems within 50 fulfillment centers worldwide.

Ensure Proper Insulation

When your insulation is poor, air will escape your warehouse easily. Losing warm or cool air in this way will force your insulation costs up, not to mention waste valuable energy.

Implementing geothermal energy systems can help you maintain comfortable temperatures within your warehouse. Another green move is to replace older doors with automated ones with motion sensors to conserve precious energy. 

In rooms that remain inactive or unoccupied most of the time, you can install a programmable thermostat to reduce energy waste.

Implement Energy-Efficient Light Fixtures

Most retail businesses require a vast amount of warehouse space, which means adequate lighting is essential. There are several ways you can lower your lighting costs while becoming more environmentally friendly, such as using LED light bulbs. LEDs can reduce power consumption by 50%—while lighting better and longer.

Another way to reduce energy consumption is to install skylights in your warehouse. With ample sunlight entering the facility, you won’t need as many lights on during the day.

Finally, consider installing motion sensors for your lights so that they only turn on when someone walks into the room. This way, you won’t need to remind your employees to turn off the lights when they leave a room.

First In, First Out 

First In, First Out (FIFO) is the opposite of Last In, First Out (LIFO) and is a sure way to reduce your potential amount of overstock or obsolete inventory. In this inventory management system, you use the first or oldest stock first. You only use the newest inventory after using or shipping out all other merchandise in the warehouse. 

By selling older products first, you’re less likely to lose money when your products become obsolete or expire. If you sell products that spoil or quickly become out-of-date, FIFO is especially valuable and can improve your flow of goods.

Use an Inventory Management Platform

A complete inventory and order management solution like Flxpoint automates routine inventory tasks, simplifies order fulfillment, and easily integrates your accounting software. With all of your inventory and order data in one place, you don’t have to spend hours manually managing your inventory using spreadsheets.

An intelligent inventory management system will reduce the amount of time you spend managing your inventory so you can focus on building a more sustainable—and successful business.

Start Practicing Sustainable Inventory Management Today

Why waste money, space, and time if you can manage your inventory more efficiently?

By creating a plan to achieve sustainable inventory management, you can reduce your business’s waste, excess inventory, and lost investments—while taking care of the Earth along the way.


Taylor Bryant

Content Writer

Taylor Bryant is a content writer for Flxpoint. She writes long-form content about current tactics and trends in the e-commerce and dropshipping industries, e-commerce platforms, and the SaaS tools they integrate with.

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