Sustainovation: Smart Inventory for a Greener SME Future in Malaysia Danish Wafiq, Masri Sulaiman, Nurshamimah Samsuddin
University of Malaya, Honda Malaysia Sdn. Bhd., Universiti Teknikal Malaysia Melaka
Abstract
In the era of Industry 4.0, Malaysian Small and Medium Enterprises (SMEs) face increasing pressure to balance operational efficiency with environmental responsibility in line with both market demands and regulatory expectations. This study introduces the concept of Sustainovation-the fusion of sustainability and innovation-within the domain of smart inventory management. By leveraging technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), and cloud-based systems, the research investigates how SMEs can shift from conventional inventory methods to eco-friendly, data-driven practices. A mixed-methods approach is adopted, comprising surveys with 150 SMEs, interviews with 20 experts, and three in-depth case studies. Findings suggest that adopting smart inventory solutions can reduce excess stock by up to 35%, minimize waste by 25%, and cut logistics-related carbon emissions by approximately 18%. However, barriers including high implementation costs (reported by 68% of SMEs), lack of technical expertise (54%), and limited digital infrastructure remain significant. From a legal perspective, the study also highlights the growing importance of compliance with Malaysia^s Environmental Quality Act 1974, Extended Producer Responsibility (EPR) policies, and the Twelfth Malaysia Plan^s sustainability targets, which increasingly compel SMEs to integrate green practices. The research offers a strategic framework that combines technological innovation with legal compliance, enabling SMEs not only to enhance competitiveness but also to align with national sustainability regulations and international environmental standards.
Keywords: Sustainovation, Smart Inventory, Industry 4.0, SMEs, IoT, AI, Sustainability
