May 17, 2020

Three ways to reduce food waste within the supply chain

Amir Harel, General Manager of...
4 min
In today’s market, consumer demands have not only driven supply chain efficiencies for greater speed and convenience but are increasingly now forcing...

In today’s market, consumer demands have not only driven supply chain efficiencies for greater speed and convenience but are increasingly now forcing retailers to address expectations of improved sustainability.

The consequences of keeping up with customers’ wishes aren’t always easy and may have an adverse effect on short term business plans and processes, especially if your supply chain isn’t as seamless and transparent as it should be. Even the smallest of inefficiencies can add up and lead to all manner of waste during production, transport and even disposal. 

Over recent years, the grocery market has come under scrutiny and intense pressure to re-evaluate its approach to tackling food waste, with around 88mn tonnes worth being generated yearly across the EU - with a staggering 40% of food not even making it to the market. 

The problem is, without real-time insight into the exact status and condition of product and inventory within the end-to-end supply chain, what options do companies have to address waste and improve customer engagement? 

Amir Harel, General Manager of Visibility Solutions at Zetes, discusses his top tips to implementing a complete real-time, intelligence-driven visibility solution for the supply chain, and how this can help to mitigate food waste.  

 

1. Analyse your supply chain and improve visibility

Recent research from Sapio, on behalf of Zetes, reveals that the current levels of supply chain visibility are far from perfect, with a staggering 94% of organisations surveyed saying they lack transparency throughout their supply chain. 

The world is ready for change. According to REFRESH, an EU research project acting against food waste, wastage in Europe would be enough to feed all the hungry people in the world twice over. It’s a message that consumers around the world are taking to heart. From reusable bags, paper straws, bottle-free toiletries to meat-free diets, people are taking real steps to reduce waste, and they expect the businesses they buy from to do the same. 

In the UK, grocers have encouragingly pledged to halve their food waste from ‘farm to fork’ by 2030. Whilst we commend large retailers for deploying innovative ideas such as the introduction of ‘wonky veg’ - vegetables that do not meet the aesthetic requirements of supermarkets due to shape or appearance – are now being sold in supermarkets to help combat waste, it is analysing the production of waste on a more granular level that will achieve a positive environmental impact at a far greater scale.

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2. Understand your processes and make intelligent modifications

To implement an appropriate resolution, it is imperative that the cause of waste is understood. There are many contributors – from the excess inventory that arises from poor and/or delayed forecasting and orders, to time lost during the distribution process coupled with inefficient transportation models can be devastating for any short shelf-life products. Just 30% of organisations have full visibility of goods in transit. As a result, addressing the food waste that occurs at every stage of the supply chain is a complex task. 

Research highlights that 79% believe that improved visibility would have a material effect on cutting wastage. As a taste of the potential savings, it’s estimated that supply chains could reduce food waste alone by €240bn.

For example, reducing empty miles, improving first time in full delivery, minimising unnecessary stock movement between stores, avoiding forecasting or ordering disputes and achieving far more intelligent routing, are all critical components for an efficient supply chain that minimises waste.

 

3. Stay efficient and enhance collaboration

Having complete visibility and traceability of products is key to a resilient supply chain, which is especially important when recalls and faults in production can cause crisis situations and disruptions. When retailers are able to share data throughout their supplier ecosystem in real-time, they can create the foundations for better collaboration based on stronger connections and highly effective dynamic forecasting. 

It is also essential that companies understand how technology can be deployed and utilised to address each challenge – whether that is waste reduction through improved transportation or more accurate and dynamic levels of stock availability. 

 

So, where to start?        

Environmental consciousness in the digital age will continue to have a huge impact on retailers. The vision to transform ‘farm to fork’ and remove food waste from the supply chain is big. To succeed, retailers need to start small, identifying priority areas first, where quick and impactful wins can be realised. As they start to see results, they will be able to scale fast and ultimately achieve full end-to-end intelligence-driven visibility.

 

By Amir Harel, General Manager of Visibility Solutions at Zetes

For more information on all topics for Procurement, Supply Chain & Logistics - please take a look at the latest edition of Supply Chain Digital magazine.

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Jun 11, 2021

NTT DATA Services, Remodelling Supply Chains for Resilience

NTTDATA
supplychain
Supplychainriskmanagement
Procurement
6 min
Joey Dean, Managing Director of healthcare consulting at NTT DATA Services, shares remodelling strategies for more resilient supply chains

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.

The Challenges

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.”

 

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