September 12, 2023

Sustainability in the Age of AI: Skipped's Green Approach to Inventory Management

Tarsi Luo
Chief Executive Officer

One field of technology has the potential to revolutionise sustainability more than any other: artificial intelligence (AI).

Sustainability has become a critical business issue over recent years. In the field of inventory management, a number of sustainable practices and techniques have been adopted to move goods and materials across the world. As global supply chains get more complex and interdependent, technology is increasingly used to drive sustainability and achieve better environmental outcomes.

Sustainability is an environmental, social, and economic goal that aims for long-term coexistence between people and the world they inhabit. Several technologies have been adopted to achieve this goal, including various tools to streamline supply chains and minimise waste. One field of technology has the potential to revolutionise sustainability more than any other: artificial intelligence (AI).

AI has been successfully adopted by many industries, from education and healthcare to finance and logistics. When AI systems are automated and integrated effectively, they can help to boost efficiency, reduce waste, and improve decision-making across the supply chain. When technology is used effectively to manage inventory, businesses can expect benefits on several fronts.

With a global push towards greener operations, 48% of companies have experienced increased pressure to adopt a more sustainable supply chain.

The Environmental Costs of Traditional Inventory Management

Inventory management includes a range of processes and techniques used to manufacture, store, and distribute goods. This field helps to ensure the availability of the right goods at the right places at the right times. The traditional systems used to reach these goals can be effective, but they also have multiple problems when it comes to sustainability.

Conventional inventory management is a complex process that involves manually tracking and managing inventory levels between locations and time periods. This process is time- and resource-intensive, as it involves lots of counting, recording, updating, and tracking. In the modern world, this is rarely the best option.

Inventory management includes three broad categories, all of which have environmental challenges:

Stock control

Accurate stock control is the foundation of inventory management. For the supply chain to be effective, it's vital to maintain enough inventory while avoiding excess. Traditional systems use various methods to calculate stock, analysing previous periods, forecasting future demand, and factoring in lead times to ensure healthy flows. These manual methods are often insufficient, with lack of stock leading to unfulfilled demand and overproduction leading to waste.

The global cost of inventory distortion, including understock and overstock, is an estimated US$1.1 trillion. This has a pronounced economic and environmental impact.


Inventory management typically involves a heavy focus on transportation. Traditional systems use manual techniques to manage vehicle fleets and shipping routes, which can lead to problems. Whether it's poor route planning, insufficient vehicle tracking, or half-filled loads, inefficiencies easily lead to cost blowouts and missed deadlines. Traditional transportation practices can also lead to insufficient or excessive stock levels, all of which have a direct impact on carbon emissions.

Resource management

Inventory management is heavily dependent on resources, including things like real estate, infrastructure, and equipment. While perfect distribution may be the aim, physical property is needed to house and secure stock during production, warehousing, and retail. Under traditional management systems, supply chains are often compromised due to a lack of integration and control. For example, ineffective property management leads to higher energy consumption, and poor fleet management leads to higher fuel costs.

The AI Revolution in Inventory Management

When adopted and implemented carefully, AI can optimise numerous business processes at all stages of the supply chain. For example, item-level tagging can increase inventory accuracy, automated software tools can analyse and correlate demand, and AI-powered robots can work without salaries. All these benefits help to improve efficiency, avoid waste, and promote sustainability. AI delivers value throughout the inventory cycle, from delivery and stock management to data processing and customer service.

The following benefits are among the most critical:

Precise demand forecasting reduces overproduction

Balancing supply and demand is critical to any healthy supply chain. Insufficient production and supply can lead to underutilised resources and energy waste, and excessive production and supply can create bottlenecks and system stresses. These scenarios are unsustainable, both for the business in question and for the wider world. AI technology enables more precise demand forecasting, with businesses able to optimise distribution and streamline flows between interdependent systems.

AI-enhanced supply chain management greatly improves forecasting accuracy. Forecasting errors can be reduced by 20-50%, lost sales by up to 65%, and inventory reductions by 20-50%.

Real-time data analytics optimise transportation

During different phases of the supply chain, goods are either stored at static locations or transported between these locations. Inefficient movements between factories, warehouses, and shops are a major reason for waste. This creates unwanted expenses, from driver salaries and maintenance costs to toll charges and higher fuel costs. AI can be part of an effective transportation solution, with real-time data analytics able to streamline fleet management, vehicle movements, and other aspects of logistics.

Automated warehousing solutions reduce energy consumption

Waste can manifest in many ways, from real estate and transportation expenses to excessive energy usage in warehouses. Optimising stock levels is not just about keeping suppliers and customers happy; it's also about reducing in-house expenses. Energy usage is a significant expense for all businesses, and AI can be part of the solution. Automated warehouse management systems are an effective way to control energy usage and ensure sustainable environmental outcomes.

By 2025, the global warehouse automation market is projected to reach US$69 billion. More flexible supply chains are likely to boost efficiency and lower energy wastage.

AI-driven algorithms enable better stock rotation

Effective stock rotation is an important issue for all businesses. To ensure healthy rotation, it's important to measure supply levels, forecast demand, and manage distribution channels throughout the product life cycle. This progression can be hard to define, however, with the ongoing relationship between expense, turnover, and shelf life not always obvious. AI can be an important part of the solution, with technology able to integrate diverse datasets and improve stock rotation. Without the data and automation capabilities of AI, stock control is a complex and time-consuming process that's prone to manual error.

Skipped's Green Approach

At Skipped, we have adopted a unique AI-driven approach to inventory management. Our services can minimise waste throughout the supply chain, from retail sales to warehouse management and transportation. More than an added benefit, environmental and social sustainability is integrated into our business model.

Our AI-driven platform functions as a real-time e-commerce network, helping you to enjoy the benefits of perfect distribution. Our collaborative fulfilment platform puts brands and retailers in control, with AI-driven systems enabling the sale and supply of out-of-stock products and variants.

The storage and transportation of goods are the most important causes of environmental hazards and CO2 emissions in the logistics supply chain. Skipped provides solutions to both of these problems, controlling stock levels and optimising transportation with every order.

Not only is this great for sales and customer relationships, but it also provides a number of sustainability benefits:

Control stock levels and minimise waste

At Skipped, our platform helps to keep everything available and in stock — all the time. We help you eliminate out-of-stock scenarios by connecting with other retailers, and we allow you to gain additional sales by meeting unfulfilled demand. We use AI systems to identify disparity between supply and demand across a large network to fill gaps and drive sales. Margins are shared between retailers, and technology works in real time based on consumer demand.

These systems provide complete control over stock levels, helping you to improve efficiency and reduce waste across the board. Healthy inventory management also leads to reduced property and rental expenses, lower energy bills, fewer human resources, and better profit margins.

Optimise transportation and reduce costs

At Skipped, we use AI technology to optimise the sales process. Our systems use data analysis and networking to improve all aspects of stock control and order fulfilment. This offers a range of sustainability benefits, especially when it comes to the physical movement of goods.

The transportation industry creates massive carbon emissions, which is a significant environmental problem. While trucks and other vehicles help to drive the modern world, the systems used to manage them are often inefficient and wasteful. From half-filled trucks to inefficient journey planning, many of these problems can be addressed with AI-powered logistics. At Skipped, our platform helps to improve distribution chains, leading to fewer trucks on the road, reduced fuel consumption, and lower carbon emissions.

The Bigger Picture: The Sustainable Retail Landscape

Inventory management systems have a huge impact on the retail ecosystem. As more efficient systems are developed and driven by AI technologies, companies have a unique opportunity to benefit. Modern inventory management systems help to tighten distribution networks and balance the relationship between supply and demand. This is great for customer relationships, business reputations, and profit margins, and it's also more sustainable for the planet.

As climate change and social disparity become more entrenched in society, consumers are increasingly motivated to make a difference. Regardless of geographic location or industry sector, consumers continue to drive demand for sustainable practices. Businesses have a unique opportunity to adopt and promote these practices, which can be accelerated through the use of AI. Not only is this positive for the planet, but it's also the best way to streamline your operations and align with the needs of the market. At Skipped, we are proud to be part of the solution.

Final Thoughts

We live at a fascinating time in human history. While industrialisation has created huge advances in human civilisation, it has also led to numerous environmental and social problems. We are surrounded by incredible challenges and opportunities, many of which lie at the intersection of technology and sustainability. Now more than ever, companies need to consider the environmental impact of their operations and adopt technology-based solutions capable of driving positive change.

If you want to embrace sustainable solutions for the health of your business, your community, and the wider environment, please contact Skipped for more information.

Tarsi Luo
Chief Executive Officer

From drones, pharmaceuticals, to baby products, Tarsi has seen and conquered through the toughest and the most complicated challenges there is in FMCG. She is one of Australia's most influential under-40 CEOs and a highly sought after business leader in APAC on marketing, manufacturing and exports.


We acknowledge the Traditional Custodians of the lands on which we work and live, and pay our respects to Elders past, present and future.