Reduce operational costs with an environmentally friendly warehouse
Businesses across the globe are looking at more than just their transportation carbon footprint and are looking to their warehouses to go green, help the environment and in turn save operational costs.
A McKinsey report stated that more than 90% of companies’ environmental impact comes from their suppliers, which is why it’s important for wholesalers and distributors to look at more than just their transportation impact and take a look at their warehouse space to understand how they can lower their impact. The severity of global warming is continually increasing, which is why many consumers are looking to sustainable supplier and product alternatives so they can reduce their impact on the planet. This explains why McKinsey found that a business’s second reason for addressing sustainability is corporate reputation, helping them to be the supplier of choice. However, surprisingly, they found that the number one reason for businesses going green is to improve operational efficiency and lowering costs.
The Head of Green Financing of the EEF Scheme said: “Our analysis has shown that there is a huge market potential for energy savings from business investment in energy efficiency equipment amounting to over £190 million in warehouses alone.” This means that there could be huge cost savings in investing in efficient technology, equipment and procedures, and in focusing on a greener business strategy.
Money saving benefits of having an eco-friendly warehouse
The number of environmentally-friendly changes you can make to your warehouse are endless and vary from expensive and time-consuming refits and strategic changes, to many small, low-cost switches that can make a big impact on not only the planet but your bottom line.
Making green changes involves more than just turning the lights off (although this is important!). It’s about looking at how you can minimise the amount of energy you use to operate - and this is where the costs savings come in.
Motion sensor lights & LED light bulbs
The lights you use in your warehouse are genuinely important in reducing your impact. Changing to LED light bulbs is one example, but maximising the time when the lights are off will have the biggest impact and this is something that can be achieved by motion sensor lights. This will maximise the use of natural daylight and only use energy when necessary.
The best way to reduce energy is to use a renewable energy source; solar panels are no longer the huge investment they once were.
Regularly check and renew your window and door sealants to ensure the heat inside is not wasted.
Reuse & recycle
Businesses often reuse materials such as wood pallets and plastic containers, but it’s worth considering what other items you already use and whether those could be reused, or whether a greener alternative could be chosen. Some companies have implemented a customer packaging return policy whereby customers can either return the packaging their goods came in or have it collected when a new delivery is made. Similarly, it’s worth looking at how the packaging that arrives at your warehouse from suppliers could be reused in your own operations or returned for a lesser impact on the environment and reduction in cost of buying new materials.
Digitise your processes and go paperless
This is relevant to both your warehouse and office space. By simply reducing the amount of materials you use, you’ll produce less waste. Embracing technology to digitise your information will help you go paperless and create more effective warehouse management processes with minimal manual documents.
In order to improve your warehouse efficiencies, you need to begin optimising your purchasing processes to ensure you only purchase the stock you need and can sell to avoid valuable warehouse space being taken up with dead or slow-moving stock.
Optimised warehouse layouts
Data gained through inventory tracking can be used to design optimised warehouse layouts. This, in turn, cuts labour and energy costs. Design your warehouse with your fast-moving products in mind so they’re more accessible, helping to reduce travel and picking times.
Make use of vertical space in your warehouse to directly affect your bottom-line, and ensure all bin locations are correctly labelled to deliver further improvement in picking, navigation and stock accuracies. Your improved efficiencies will also result in an improved relationship with your suppliers and customers as you can deliver a faster and more effective service.
Data drives greener operations
All these changes, especially when looking to optimise your warehouse space and picking process, can only be done effectively with accurate data. Without understanding your current processes, efficiencies and potential environmental impacts, you won’t know where to begin to make improvements. Plus, it won’t be as easy to note the cost and productivity benefits without company performance data to benchmark against and set goals from. Be sure your business software has an integrated Business Intelligence solution that will give you the reporting dashboards and tools you need to analyse your company's performance so you can set targets and drive improvements.
Creating a greener warehouse
Implementing and investing in greener solutions has huge promise for your bottom-line, but also provides other perks such as business reputation, branding and client relationships. Cost savings are often realised years after implementation, but every little helps at each stage of the distribution process and supply chain to help reduce our impact on the environment, build sustainable and conscious companies and also improve efficiencies and your bottom line along the way.