What is green warehousing? How sustainable warehouses can satisfy stakeholders, improve the bottom line, and prioritize the planet

What is green warehousing? And why is it important in the modern business climate? As the Information Age advances and as Earth continues to suffer the effects of climate change, well-informed consumers demand environmental and social responsibility from businesses, including green warehousing.

Sustainability in business—demonstrated by companies that operate with concern for natural and human resources—can mean increased customer loyalty. Incorporating green logistics into warehousing as part of the supply chain can also yield better business productivity and improve a business’s bottom line.

Applying green trends in warehousing offers nearly immediate return on investment (ROI) plus longer-term global improvements while satisfying stakeholders’ desires.

Today’s green warehousing practices

As warehouse managers consider green warehousing in today’s business climate, they need to know how to measure results and where to find available, effective products and practices.

Key performance indicators in green warehousing

In global supply chains, warehouses produce environmental pollution mostly from heating, cooling, and lighting. Generally, the bigger the warehouse, the larger the carbon footprint. Warehouse managers can measure the carbon footprint of their operations by considering key performance indicators: emissions, natural resource use, and amount of waste and recycling.

Studying total carbon dioxide emissions, as well as energy consumption, water consumption, and rate of product or material use, will reveal areas where companies can apply green initiatives.

For example, a warehouse with a high electricity bill might discover that alternative lighting sources—like natural light, automatic lights, or other renewable energy options—offer savings. Likewise, the discovery that a warehouse consumes large quantities of water from a natural source might inspire change. By installing water flow reduction mechanisms or a rainwater capture system, warehouses can reduce, offset, or optimize water use.

Green warehousing technologies and products available today

After assessing their warehouses to identify logistics solutions for environmental sustainability, businesses have various green warehousing products to consider that will promote sustainable logistics:

• A warehouse management system (WMS)
• Order-picking technology
• Bar coding
• Radio frequency identification (RFID)

A WMS allows for the digital coordination of stores, distribution centers, and warehouses while coordinating shipping and transportation. Better inventory control through a WMS means green warehouses can operate with the ideal amount of product, thereby reducing excess inventory and maximizing storage space.

Technology to enhance order picking through automation or digitizing can increase accuracy and speed up warehouse orders. Order-picking technology has the added benefit of reducing paper consumption.

Also reducing the need for paper are the sustainable distribution practices of bar coding and RFID. These technologies improve processes and increase the visibility of goods throughout the supply chain.

Additional sustainable products include skylights to let in natural light, ceiling fans to control warehouse temperature, energy-efficient lights and fixtures, green building materials, and building insulation. Eco-friendly warehouses reduce waste, another important principle of sustainable business.

Challenges facing green logistics today

Implementing green initiatives along the supply chain is difficult. But with the right tools and management practices, companies can confront any number of challenges:

• The vastness of the global supply chain: Supply chain logistics covers a wide range of shipping types, routes, sizes, configurations, and more. Lessening environmental impact across the entire network can be challenging.
• Fewer green solutions for warehousing: Compared to other parts of the supply chain, such as transportation, fewer green solutions exist for warehousing. Yet many of the available solutions prove effective, and the number of solutions is growing.
• The up-front costs of green warehousing solutions: These costs might prevent some operations from converting. However, the initial investment for green logistics often pays off with time.

Even if the path to green warehousing presents challenges, companies wanting to stand out from their competitors can prioritize sustainability to make a difference in the world and in their accounts.

Effectiveness of green warehousing

In a global market, businesses need to stand out from their competitors. Success hinges on providing consumers with what they want: companies that go green in all aspects of their operations. A green supply chain satisfies stakeholders’ desires while positively impacting operations and finances.

Green warehousing for the bottom line

Thanks to the digital proliferation of information, customers know the environmental impact of their buying habits. Those who want to reduce their carbon footprint seek out companies that prioritize green initiatives, from raw material source to warehouse to packaging to transportation. Conscientious consumers are willing to pay more for green products and services.

Businesses gain a competitive advantage by reducing environmental impact through supply chain management, including through green distribution. And publicizing details of these sustainable practices—such as using solar panels or green building materials—creates customer loyalty because the buyer perceives the company as environmentally responsible.

Benefits of moving to a green economy

Green logistics plays an important part in a larger undertaking: to move the world toward a green economy. A green economy focuses on low carbon emission, is efficient with resources, and is socially inclusive.

Benefits of a green economy include reduced pollution, enhanced efficiency of energy and resources, a slowdown in the loss of biodiversity, and preservation of the services that the ecosystem provides.

A successful green economy allows economic growth and improves people’s ability to coexist with nature. Economic growth might move slowly at first, but the benefits play out in the long run. Lasting benefits of sustainable development include reducing the risks associated with climate change, energy shocks, and water scarcity.

Green practices can also reduce poverty and help developing countries via new export opportunities. Businesses that embrace responsible supply chain practices stage themselves for success in emerging markets.

Results of a greener warehouse on a company’s ROI

Although the benefits of green warehousing might seem intangible or too far off, supply chain managers who invest in going green see a fast ROI.

Energy-efficiency measures, such as switching lighting sources to reduce electricity consumption, have a quick payoff. Installing a WMS could deliver an ROI in a matter of months.

Importance of green warehousing

Because supply chains are a major source of environmental impact in the consumer sector, sustainability in the industry can have a positive impact on the environment.

Importance of green practices for warehouses

As stakeholders demand that businesses reduce their carbon footprints, green practices become increasingly important for eco-friendly warehouses. They must keep up with government regulations, meet insurance requirements, and satisfy the demands of customers.

A green warehouse aims to lessen its environmental impact through practices such as an automated warehouse, lean warehousing, and green building.

Green warehousing to reduce a company’s environmental footprint

Companies can focus on decreasing the carbon footprint of their warehouses through various methods:

• Decreasing demand for electricity: Companies can accomplish this by reducing heating, cooling, and lighting demands, by generating power on site, or by taking advantage of energy management systems.
• Reducing waste: Companies can limit waste by ensuring efficient inventory management, going paperless, and using eco-friendly packaging.
• Building warehouses efficiently: By cutting back on the size of warehouses, building vertically, or using green building materials, companies can diminish their footprints on the land itself.

Goals of green warehousing

As a strategy, sustainable logistics aims to reduce environmental costs, resource waste, and business risks—moving the world toward a green economy. And with a strategic approach to supply chain sustainability in the warehouse, a company can accomplish many of its green goals.

The future of green warehousing

The warehousing industry continues to evolve, finding new ways to improve operations and reduce environmental impact. Green warehouses, whether new or retrofitted, have allowed leaders to emerge among warehouse operators, and the principles they use can help transform warehouses around the world.

Projected features of new green warehouses

New green warehouses prioritize efficiency and sustainability. Features of eco-friendly warehouses include the following:

• Recycling areas
• Solar panels or other power-generating features
• Xeriscaping and drought-tolerant plants
• Green building practices
• Skylights
• Roofs and walls that are appropriate for the climate
• Low-emitting paint
• Energy-efficient lighting
• Regionally sourced building materials

Leaders in the green warehouse movement

Warehouse operators that stand out in the warehouse industry for embracing green warehousing practices include many well-known brands. For example, retail and outdoor recreation services consumer cooperative Recreational Equipment Inc. designed a net-zero energy distribution center in Arizona.

Another outdoor apparel company, Patagonia, embraced sustainable concepts and materials for energy efficiency in its Nevada warehouse construction and expansion. And Amazon, an online retailer and cloud services provider with fulfillment centers worldwide, states that it is working to reduce greenhouse gas emissions and improve resource efficiency across the globe.

Conscientious companies, including Agility, operate under guidance from the United Nations’ Sustainable Development Goals to end poverty and protect the planet. Two of those goals promote affordable, clean energy and climate action, and both apply to green warehousing.

Tips for green warehousing

As you look for ways to create a more sustainable business, consider these green warehousing tips:

• Use natural or efficient lighting.
• Go paperless.
• Reduce warehouse waste.
• Reduce heating and cooling needs.
• Employ warehouse automation.
• Use eco-friendly packaging.
• Use green building materials.