We’re all keen to see a green recovery from Covid and manufacturers and retailers will be working hard to cut carbon footprints in 2021 says Eric Carter, Solutions Architect at Indigo Software. When Amazon starts TV advertising to announce ‘Net Zero by 2040’ targets, it is time to take note. Consumers are more ethical and more conscious about their impact on the environment – as reflected in the way they shop for goods and services.
According to a recent Accenture study, 99% of chief executives say sustainability is critical to future success. Of particular interest now is the circular economy. It could transform sectors like fashion and homewares, but actually, every industry can consider adopting circular business models to reduce their environmental impacts. For example, Husqvarna is a power tools manufacturer and has launched vending machines for urban communities. Customers can rent what they need for a particular job rather than buy products for intermittent use only.
Many retailers are giving customers the chance to sell pre-loved items back to them in exchange for store credit, which means they can benefit from the resale process too. Ikea launched a Buy back scheme recently to reduce waste going into landfill and sellers are rewarded with vouchers.
Luxury clothing manufacturers are also getting involved with circular commerce offerings. Why buy an expensive handbag when you can rent a selection for the season? According to the subscription-rental model, consumers pay a monthly fee to access a set number of products which can be exchanged continuously or purchased at a reduced price. The same principle applies for re-commerce, where pre-loved items are recovered and re-sold.
This is where software like a warehouse management system (WMS) becomes indispensable. Circular economy logistics models are rather like processing customer returns on a vast scale and the same principles apply. Goods need to be booked in and accounted for, quality checked, listed for sale as quickly as possible and dispatched to the customer. In addition to processing returns, there are other ways a WMS can improve circular economy warehouses:
Store more stock in the same space
A WMS enables up to 30% more inventory to be stored in any warehouse using dynamic location setting. A WMS directs operatives to wherever there is a slot available and guides pickers to where the stock is held for efficient order processing.
Pick route optimisation and planning
A WMS automatically evaluates the possible routes available to pick a stock item and will direct operatives to fulfil their order pick instructions using the most efficient travel path based on location.
Perpetual inventory (PI) stock counting
A daily PI or cyclical counting process supported by a WMS means warehouse managers can eliminate routine stock counts. It is the most effective way to maintain high inventory accuracy, minimise shrinkage and ensures business as usual whilst counting is in progress.
All manufacturers and retailers should consider how to incorporate circular economy principles into their business. Whether they opt for rental, re-commerce or subscription services, efficient logistics, run by a warehouse management software system, will be essential for maximising profits.