Are you hoping to attract more customers this year? Then you better ensure your sustainability strategy is up to scratch.
Demand for ‘green’ retail is growing, with research showing that sustainability is a top priority for modern shoppers, ranked alongside the quality of products and the speed of service.
A third of shoppers confirm that they are now more sustainable-minded in the wake of the pandemic and six out of 10 millennials would pay more for ecological and sustainable products, according to data from GlobalWebindex.
Even as the economic crisis deepens and the cost of living rises, consumers are still opting to shop with brands that have a clear focus on sustainability, even if it costs them more.
So as well as being the right thing to do for the planet, taking action to be more sustainable also makes good business sense – and overhauling your approach to inventory is a great place to start.
How Inventory Planning Can Lead to Supply Chain Sustainability
Here are five ways inventory planning can make your brand more sustainable…
1. It cuts carbon emissions
Inventory planning means using cutting-edge technology to accurately forecast sales demand and get reliable buying recommendations, so that you can order the right items at exactly the right time (yep, that means no more overstock or stockouts!).
The best inventory planning tools factor in your various warehouse and inventory locations, so that you can ensure you can not only ensure you have the right stock, in the right variants but also ensure it’s at the right locations.
This makes it possible to put an end to expediting and transfers between warehouses, which could significantly cut your carbon emissions.
2. It reduces waste
Did you know retailers account for about 8 million tons of waste in the U.S alone? Switching to eco-friendly packaging for your products is great, but there’s more you can do to minimize waste.
Inventory planning ensures you only buy the stock you can sell, dramatically reducing the risk of ‘waste’ products that have to be liquidated or disposed of. Next-gen inventory planning also factors in the shelf life of items to maximize freshness and minimize risk of obsolescence.
Inventory Planner provides you with a handy Aging Analysis Report, so you can avoid having to waste or dispose of unused, old or out-of-fashion items.
3. It minimizes warehouse space
It’s estimated that up to 22% of inventory is unnecessary. That’s bad for sustainability because the more inventory you hold, the more power and heat you use to store and process it.
You can dramatically boost your sustainability by only carrying inventory you need (and will actually sell). Relying on spreadsheets and guesswork to work out exactly how much inventory you need is notoriously risky and unreliable, but market-leading inventory planning software makes it simple and accurate.
4. It stops transport-related inefficiency
Transporting your inventory is a necessary evil – but packing containers and vehicles inefficiently means generating excess carbon. Inventory Planner is the key to optimizing your use of shipping and transport containers.
Use it to scale your PO to a specific volume or weight, to ensure you fill every last square inch of freight capacity. This is good for sustainability, but it’s also good for your bottom line as you can take better advantage of economies of scale with international shipments.
If you have physical retail space, you can use Inventory Planner to set a maximum stock level for retail stores which reflects the shelf space available. This avoids transporting goods unnecessarily.
5. It stops small batch orders
When you run out of stock, or an unexpected order comes in, you can end up running small batches (which generate higher emissions per unit of output) and breaking with your usually-sustainable processes to get the order fulfilled.
Properly (and accurately) planning your inventory is a way to proactively avoid this. It’s important to factor in lead times when planning and it can be sensible to plan for the slowest/cheapest shipping method.
Use your Inventory Planner data to plan using your actual lead time (not just the timescale given to you by suppliers).
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