Tesco CEO blogs on food waste
Its shocking when you look at the numbers. Even though just 1 percent of food was...
One of the biggest issues supermarkets must face up to is food waste.
It’s shocking when you look at the numbers. Even though just 1 percent of food waste is from supermarkets, 55,400 tonnes of food was thrown away at Tesco stores in the past year. About 30,000 tonnes of that could have been eaten. That’s equivalent to over 70 million meals. It’s simply a huge amount of food.
The fact is there are people up and down the country who are hungry, and could really use the food we throw away. And one day, we want all of that food - all 30,000 tonnes of it – to be turned into those 70 million meals for the people who need it.
FareShare tell us they are facing increased demand for their services and it is constantly expanding its network of charities that provide people with food through homeless shelters, community projects, breakfast clubs and women’s refuges.
This is all the more shocking when you take into account the fact that that around 30 percent of food produced for UK customers goes to waste. Around a half is lost on farms and in the supply chain, and a roughly equal amount is thrown away in the home. It’s estimated that the average family puts about £700 worth of food in the bin each year, much of it still unopened in its packaging. 1 percent is wasted in retail operations, including our own.
We think we all have a responsibility to cut waste – not just in our own stores, but everywhere. We’re already working with our suppliers to cut food waste in the supply chain, working directly with them on ways to use as much of the crop as possible. We’ve also ended “Buy One, Get One Free” promotions on fruit and veg and are working with the Waste & Resources Action Programme (WRAP) to include ‘Love Food Hate Waste’ hints and tips on the packaging for many of our fruit and vegetable products.
We’re the only UK supermarket to publish data on food waste. But we know that publishing the numbers is just the start and there’s much more we need to do to make sure the number we publish keeps going down, year by year.
Last year, not long after I started at Tesco, I visited a number of our stores in Ireland. They were using a clever piece of technology, an app called FoodCloud, which store managers used to alert local charities about unsold food they had at the end of each day. The charities then came and picked the food up, and used it to feed people in need. People who were homeless, the elderly, or people who found themselves in a crisis and couldn’t pay the bills.
It was a very simple system, and it worked. And now we’ve brought together the people behind FoodCloud and our existing charity partner, FareShare to bring it over to the UK. We’re starting slowly – it’ll be piloted in ten stores around the country at first. That’ll give us a chance to iron out any problems and get it right for when we roll it out more widely.
And when we do get it right, thousands of tonnes of food that could have been eaten will no longer go to waste.
It's going to be a challenge and we know we and our partners will learn a lot over the next year. This is a huge project and to make sure others can follow our lead, we’re going to share everything we learn to help other supermarkets and businesses who want to redistribute their surplus food too. If you run a charity or community group that would benefit from surplus food from Tesco stores then please register your interest with FareShare FoodCloud here.
We think this has the potential to be the biggest single step we’ve ever taken to cut food waste, and there’s no doubt the benefits could be significant.
Food waste is simply too big and too serious an issue for us to ignore.
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”