Terra Technology (Norwalk, Conn.) today introduces its online Sustainability Calculator designed to help manufacturers determine the environmental impact of reducing excess stocks through better demand prediction and inventory optimization. Terra’s sustainability calculator uses three simple steps to measure the environmental benefits of reducing inventory and to help companies understand the magnitude of these savings relative to corporate sustainability goals.
Carbon and water embodied in the estimated $8 trillion of global inventory is the equivalent of roughly 11 percent of the total annual global carbon emissions and 40 percent of global water use. While some inventory is important to ensure product availability, excess inventory stemming from forecasting error represents an enormous environmental and financial burden. By reducing unnecessary inventory, manufacturers significantly decrease their environmental footprint while lowering costs and improving return on capital.
Cutting inventory eliminates carbon emissions and water use from many parts of the product lifecycle, including manufacturing, raw materials, packaging and distribution. For most companies, manufacturing represents less than 10 percent of the total life cycle footprint, so achieving truly impactful reduction requires that sustainability programs reach beyond factory walls. Moreover, manufacturers that depend on agriculture or livestock for production are more likely to find that raw materials account for 80-90 percent of their total footprint.
Visit Terra’s free online Sustainability Calculator to learn about the environmental and financial benefits of reducing your company’s inventory footprint.