Lighten Your Inventory Footprint
Lighten Your Inventory Footprint with Accurate Forecasts
It might be the single most impactful action you can make towards meeting corporate sustainability goals. The savings are real and relevant. Cutting 10 days of inventory is equivalent to a one-time 33% reduction in your annual carbon and water footprints. As well as recurring carbon benefits from reduced transships, expedites, deadhead miles, and less warehouse space.
Inventory is essential – it keeps the supply chain moving but comes at a cost. Not surprisingly, most people see inventory in terms of capital – it accounts for roughly 15% of a manufacturer’s costs of goods sold. Cutting excess inventory shortens the cash-to-cash cycle and improves the financial health of the entire value chain. While in the spotlight from a financial perspective, inventory is essentially invisible when it comes to carbon and water use and yet plays a key role in creating a sustainable supply chain. It applies to all products, whether they are environmentally friendly, harmful or somewhere in between.
Piles of inventory in the supply chain are not just piles of capital, but also piles of carbon and water. We believe there is an opportunity to re-evaluate inventory within a new context of an “Inventory Footprint” comprised of capital, carbon and water. And given its scale, reducing inventory levels by controlling volatility might just be the single most important activity to achieve corporate sustainability goals.
By sensing demand, companies earn the right to confidently cut safety stock and lighten their inventory footprint.