Inventory management: With green supply chains to increase sustainability

Green supply chains replace traditional supply chains in logistics. Sustainability and environmental protection are increasingly part of the company’s policy – also for the background of customer and employee loyalty. Our new blog post explains how the food industry in particular can make its inventory management processes more environmentally friendly.

Green zeitgeist influences consumer behaviour

Strike for the climate, give up plastic, protect forests from deforestation, announce the fight for food waste … Sustainable use of resources and the protection of the environment are becoming increasingly public awareness. However, these issues find their way not only into the headlines, but above all into the minds of consumers. The green lifestyle influences purchasing behaviour: Whether a product makes it into the shopping cart depends on its eco-balance for more and more consumers. “Ecos” are no longer ridiculed, but receive broad support. Buying “organic” is now part of the good tone. A change of heart in which companies should not wave off disinterestedly. After all, the “sustainable consumer” is well aware of the company’s position on environmental and resource protection issues. And it is precisely this positioning that has a significant impact on the brand and corporate image. For example, nestlé, the world’s largest food producer, has been criticised for its use of resources.

The food industry and the retail sector are among the sectors that have to deal intensively with sustainability. One of the most serious problems at the moment is the destruction of food. In trade and industry, about 550,000 tons or 1.85 million tons of food end up in the garbage every year. Often these are products whose best-before date has expired or is about to expire but which are still edible. This type of food waste is not acceptable to the consumer and to businesses – neither from an environmental nor an economic point of view.

Green Supply Chain Management with Digital Solutions

Against this background, the birth of the term “green supply chain management” seems hardly surprising. The so-called green supply chains are environmentally friendly approaches designed to reduce the environmental footprint at every stage of the traditional value chain. From procurement to distribution and storage to production and transport – processes can be made greener in each of these parts of the supply chain. Economic efficiency and sustainability are not mutually undecided. On the contrary, the best example of this is inventory management. Here, the use of digital solutions not only ensures greater efficiency and thus higher revenues, but also the reduction of the ecological footprint. Software-assisted procurement and scheduling is therefore a double profit for environmentally conscious companies.

Either- or? Reduce spoiling rates or ensure the availability of goods

But how can digital inventory management solutions ensure more sustainable procurement and scheduling in practice? The basis is intelligent algorithms that provide precise forecasts and thus enable efficient purchase of goods. The forecast calculation takes into account, among other things, minimum durability data. The software is designed in such a way that goods whose best-before date is reached earlier leave the warehouse first. Using an expiration list, the solution also predicts which stored items will not be sold on time before the expiration date is reached. This will allow companies to counteract this at an early stage. In this way, the solution prevents the spoiling of food. Not only yoghurt, vegetables, meat and others can spoil but also non-resistant articles from the sanitizing sector, such as silicones or seals.

Supermarkets, however, face particular challenges, as the extended opening hours also require the shelves and refrigerated counters to be filled accordingly. After all, no retailer wants to lose the customer to the competition. Therefore, grocers face the difficult choice of either keeping the spoilage rate low or ensuring a high availability of goods. This “either-or scenario” can be prevented: Experienced software vendors are able to program the solution in such a way that inventory data can be changed during the day. With this real-time inventory management, demand forecasts can also be calculated several times a day. Normally, demand is only forecast once a day and a new calculation is carried out overnight.

Organizing transport logistics in an environmentally friendly way

Another adjustment screw that can be turned for a greener supply chain is CO2emissions in transport logistics. In 2016, road freight transport was a producer of 51,315 million tonnes ofCO2. Carbon dioxide is considered one of the main drivers of climate change. For this reason, many logistics companies have set the goal of reducing theirCO2emissions. Smart inventory management software also provides support for this: with the function of truck optimization. Deliveries are grouped as efficiently as possible to avoid empty journeys. In addition, software solutions enable optimum utilization of trucks. For this purpose, the software calculates on the basis of order lead times of the manufacturers which deliveries can be collected together on which date. In addition, digital inventory management tools ensure that a truck does not have to drive off because an important item is missing in a branch. Such “emergency rides” cause high costs and harm the environment.

Last but not least, digital inventory management solutions help companies save paper. Instead of handling long paper lists, companies in the areas of ordering and scheduling can completely dispense with paper and work digitally – thus contributing to the protection of the rainforest and thus also to the reduction of the greenhouse effect.

Green supply chain: How Alnatura is meeting its sustainability targets

The pioneer in the Alnatura organic food segment shows what a green value chain can look like in practice. The company was founded in 1984 and now operates more than 120 branches with its Alnatura Super Nature markets. Depending on the season, the individual stores offer an assortment of 6,000 to 7,500 items, consisting of fresh products, baked goods, various dry products as well as drugstore articles and textiles. Completely built in environmentally friendly wood construction, the 30,000m2 warehouse in Lorsch is divided into a high-bay warehouse and a manual warehouse and offers space for 50,000 parking spaces. Shortly after the start of operations at the distribution center, the bio-supplier introduced Remira’s LogoMate scheduling and inventory management software. The software helps Alnatura achieve its sustainability goals. Products that soon reach the best-before date leave the distribution center first. LogoMate also ensures that only busy trucks drive to the stores.

Interested in Green Supply Chain Management and would like to learn more about how LogoMate contributes to sustainable inventory management? Then contact us. We look forward to hearing from you.

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