Shifting Toward a Circular Economy


The current linear approach to materials management – extraction, manufacturing, consumption, and waste – is no longer sustainable. We now recognize that resources are finite, waste is inevitable, and by-products require proper management. The circular economy model offers an alternative approach, aiming to reduce both costs and carbon footprint by reinstating used materials. The energy and industrial sectors, in particular, can benefit from this process, which involves reengineering or reconditioning surplus and damaged materials before redeploying them in new projects. This leads to a significant reduction in carbon footprint and inventory value.


Managing surplus materials inventory is a crucial aspect of any business, regardless of its size. In order to streamline the process, there are a few things you can do.


What is in your surplus inventory?


Once you have identified the surplus materials that are not needed in the next 18 months and are not strategic, it is important to segment them properly. There are different categories of surplus materials, and each one requires a different approach.

New/unused materials can be sold or donated to other organizations that may have a use for them. Used and re-usable materials can also be sold or donated, but they may require reconditioning before they can be used again.

Materials that are not usable even after reconditioning should be disposed of properly. This may require special handling if the materials are hazardous or contain toxic substances. It is important to follow all applicable laws and regulations when disposing of surplus materials.

By properly identifying and segmenting surplus materials, you can improve efficiency and reduce costs in the long run.


Who in-house can see your surplus materials?


Improving internal communication is a crucial aspect of any successful business. By ensuring that all warehouses and affiliates are aware of the availability of surplus materials, you can prevent redondant orders at the group level. This can be achieved by including transfer prices in the partnership agreements, which will help to clarify ownership issues and minimize confusion.

In addition to this, it is also important to improve inventory visibility using digital solutions. These solutions can help to track materials and inventory levels, providing real-time data that can be used to optimize production processes and reduce surplus materials. In fact, implementing digital inventory solutions can lead to a reduction in overall materials surplus by up to 30%.

Overall, by improving internal communication and implementing digital solutions for inventory management, businesses can optimize their production processes and reduce waste, leading to increased efficiency and profitability.


How are you marketing your excess inventory?


Managing excess inventory can be a challenging task for any business. However, taking a proactive approach to dealing with surplus materials is key to keeping your inventory levels in check. One effective way to manage surplus inventory is to first assess whether you have any in-house users for the materials. If not, it is important to explore other options such as posting them on platforms or selling to a reseller. This will help to free up valuable space in your warehouse and prevent your inventory from becoming stagnant.

Another option is to hire an external service to sell the materials on your behalf. This can be particularly useful if you do not have the resources or expertise to sell the materials yourself. By working with a reputable service provider, you can ensure that your surplus inventory is sold in a timely manner and at a fair price.

Ultimately, managing surplus inventory is about striking a balance between keeping your inventory levels in check and generating additional revenue for your business. By following these steps and exploring different options for managing surplus materials, you can effectively streamline your inventory management processes and improve your balance sheet.


Register on BADGERS to join the circular economy.
Location: Nigeria

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