Undoubtedly, the supply chain industry can be seen as one of the most polluting industries in the world. In fact, Mckinsey reports 90 percent of commercial companies’ environmental effects come from the supply chain. Unfortunately, lack of visibility and inefficient inventory management can even worsen the situation.
To understand the size of the problem, let’s take a look at two industries known to be extremely unsustainable: Retail and Food & Beverage with both having a shockingly high percentage of the stock ending up in landfills.
Retail and Fashion
Many retail stores, especially in the Fashion industry, are in a rat race for their inventory to keep up with customer demand. Also, the Covid-19 outbreak caused such massive disruptions to the supply chain that many retailers continued overstocking in order to avoid shortages.
But the truth is that extra stocks piled up and was never sold. It got to the point where 30% of the clothes produced each season are never sold and unsold items usually ending up burned or in a landfill. Not only that companies lose a tremendous amount of money to overproduction, but the environmental cost is high too with Fashion industry alone makes up 10% of humanity’s carbon emissions.
Food& Beverage industry waste
Food waste is a common issue in developed countries. Nearly 40% of all food in America is wasted, which sums up to about 119 billion pounds of food wasted every year. The problem is very extensive in the food & beverage industry, actually, commercial food waste makes up about 61% of all food waste in the US.
Part of the waste is caused by loss of inventory, with estimations that 20 percent of fruit and vegetables are lost during production. That is a massive amount of food wasted due to the lack of inventory tracking.
Another main reason is compliance with expiration dates and correct storage to preserve the food properly. Just accidentally using a pack of food with expiration at a later date, can make another one reach expiration without use, and thus thrown away as waste. For a business, those tiny mistakes add up to very high losses, regardless of how minor they seem.
With increasing awareness of the importance of reducing the climate effect, companies are turning to technology to become more sustainable. One of the best ways to improve sustainability in various industries is to improve supply chain visibility for accurate asset tracking.
How asset tracking can help your business become more sustainable
Asset tracking technologies provide businesses the visibility they need to better manage their entire supply chain and with it reduce waste. By giving businesses an accurate picture of their inventory, they can make better data-driven decisions.
Source the right amount of inventory
Asset tracking systems allow businesses to source the right amount of stock really needed. When decision-makers have accurate inventory data they can avoid guesstimation, know how much stock they truly need. This helps avoid both understocking and overstocking, saving additional needless transport.
Reduce shrinkage and better keep your stock
By tracking assets in real-time, businesses can prevent losses, internal theft, and external theft and that way reduce their overall need for reordering stock to replenish the items that are gone.
Asset tracking platforms give businesses the ability to predict demand on an item level in real-time. For example, if a store sees a certain item is not selling well they can avoid sourcing it further; while bring more of the items that people do buy and are moving well. Such insights like not only improve sustainability but also improve customer satisfaction by giving them what they really want.
Compliance with expiration dates
When it comes to sensitive inventory, such as food &beverage, asset tracking can have a huge role in stock saving. In addition to having an accurate picture of the available inventory, the asset tracking platform can be compliant with expiration dates to help optimize the use of items and prevent throwing food away.
Technologies such as BLE beacons can help maintain assets by tracking not only their amount and location but also status such as temperature, humidity, and more. This is extremely important for sensitive inventory such as food or medication as many of those items go bad due to inappropriate storage which eventually leads to waste.
Track reusable transport items
Asset tracking systems can also help track Reusable Transport Items such as pallets, boxes, plastic containers, and more. Tracking reusable transport items can help businesses make sure less of those go missing and more can be reused.
Overall, asset tracking systems drive businesses to improve their supply chain sustainability. It allows businesses to make better decisions, protect their assets, and avoid the overproduction and waste caused by supply chain blind spots.
For many years, lots of companies avoided implementing asset tracking systems into their business from the fear of expensive and complicated deployment. Thankfully, nowadays, implementing asset tracking solutions got much more affordable and easier with companies such as Chainlane, which help you with every step and fully integrates with your business's existing systems.