Sustainable warehouse management

Sustainability is all about balancing and addressing the environmental, economic and social aspects of business, their operations and outputs. Many organizations consider sustainability as one of their important strategic values but they find it very hard to implement in their existing businesses. Now here we can discuss how we can set up a warehouse in a sustainable fashion to be more effective in the business.


Sustainability is a strategy and concept used for balancing and integrating environmental, economic and social dimensions, commonly termed as TBL or Triple Bottom line in decision making. Sustainable management of business acts as a road map in achieving the present needs of the society without compromising the opportunities of future generations.

Most of the warehousing companies have very little regard for the environmental impacts of their actions and they do not try to understand the social consequences of their business activities. All these companies mainly concentrate on factors such as customer satisfaction and cost effectiveness as their main performance indicators. Few argue that being involved in transportation and storage of goods, these companies have to recognize the importance of transforming their business models into sustainable models. One more argument to this is that vehicle emissions are one of the major sources of pollution.

We can clearly understand the sustainability concept only when we go through any case study. So let's go through a case study of the issues of sustainability in warehousing organization and how can they overcome those by turning their models into sustainable one?

Here we discuss about a real-life sustainable warehouse management project in Auckland for an ISO certified warehousing company. This company provides storage for chemical and food items in Auckland and Christchurch for many of the customers and delivers the goods to many manufacturing and retails businesses all over the country. And many transportation companies work with this company for their delivery process. This organization started growing rapidly so they decided to increase their capacity by making more warehouses. This time they decided to redesign their business process for their new warehouses that follow sustainability approach as they got some problems with their last process like shortage of skilled workers and recent developments in environmental regulations, health and safety, etc...Major issues like employee retention, compliance and environmental footprints and financial returns are associated with location of the warehouse. So the location of warehouse would have a major impact on economic, environment and social dimensions of the business. Currently the company's entire distribution system is dependent on road transportation network. Vehicle pollution being one of the biggest causes of environmental pollution in newzealand, the warehouses should be located such that the pollution generated is minimal. A sustainable warehousing organization would not only concentrate on economic factors like rent and operating costs, but also balances the environmental and social effects that occur within the warehouse boundaries as well as its surrounding vicinity. This whole study places an emphasis on finding a suitable location for the warehouse. The selection mainly depends on the supply and delivery locations of the end users and the customers, skilled staff availability and their job satisfaction.

Here we start our main task of turning things into sustainability in warehousing. Sustainable warehouse management system can be divided into simpler and more manageable parts for modeling but it turns to be not sufficient when in isolation as it is the relationship and interaction between the parts that are important. After a careful study it is observed that management of complex feedback systems can only be done using system dynamics/ systems' thinking modeling methodologies.iThink is one such modeling tool that supports system dynamics and used for modeling dynamic relationships such as social issues (health, recruitment, working hours, wage, training, etc...); environmental issues(recycling, carbon minimization, air pollution, etc...) and economic issues(Investment, warehouse rent, handling costs, etc...).Apart from location some of the other decision parameters are capital investment, number of employees, employee training, Transportation decisions, carbon minimization. Then a sustainability scoreboard will be created to monitor all the performance indicators like cash flow, warehouse utilization, social and environmental impacts on surroundings, order processing times, carbon emissions, and employee job satisfaction. Here we can present a diagrammatic view of sustainable warehouse model. In a warehouse, goods processing involves inward moment of goods and orders. Once the orders get processed, they will get transported to the respective destinations. Even this delivery of goods results in carbon emissions. In order to offset these carbon emissions, any one of the carbon minimization activities has to be performed.

Before seeing dynamics of a sustainable warehouse lets discuss about the each element used.

Stock: This represents the accumulation of physical or non-physical quantity, like number of orders.

Flow: This represents an activity which fills up or depletes stock. Here the arrow indicates the direction of to or from a stock. It's like inflow and outflow of goods.

Converter: This can hold values or serve as external input to the model. It also converts inputs to outputs through user defined functions.

Connector: They provide links between model elements.

Here we can see economic model, environmental model and social model.

Economic Model : Here the stock that is central to the economic model is warehouse inventory. When a customer sends an order, it will be added to the order backlog. The number of staff will determine the number of orders being processed and delivered.

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