warehouse, 3pl, food waste

6 ways to Reduce Food Wastage in Supply Chain

Each year more than 80 million tons of food is discarded in Europe alone. The overall cost of this wastage is more than 140 billion Euros.  Globally it is estimated that a third of all the food produced, is wasted. Most of this wastage happens before the food item even reaches the market. These figures assume higher significance when more than 750 million people around the world face food insecurity. In countries with abundance of food, people tend to throw away what they do not require or consume. This wastage not only has the environmental impact but it impacts the environment (In terms of energy and resources consumed in producing and packing the food that is thrown away). The Food supply chain along with its three stages i.e. Production, wholesaling and retailing has a significant contribution in this wastage. The cost of disposal of unutilized food adds to the cost of food wasted due reasons such as wrong or bad storage, no demand, wrong transportation, expiry before sale etc . Let us look at some of the ways that the food wastage can be reduced in the supply chain.

  1. Intelligent Packaging. Lot of food is sensitive to environmental factors such as temperature. A smart packing such as Time temperature indicator that tells how long an item has remained at a particular (generally high) temperature can indicate how soon the item will go bad and thus prioritize its sale/consumptions. Many fresh foods (many fruits) respire even after harvest. When packed, they can change the environment inside the packaging due to respiration and thus can go stale. Gas indicators built into packaging can indicate the level of gas harmful to the product. Similarly biosensors can be used to indicate the level of pathogens in the food and transmit the data to control centre. All such indicators and information about the level of freshness of food can be used to prioritize its sale and consumption before it’s spoilt and thus reduce the wastage.
  2. Packaging Considerations. Packaging of the food product has very high impact on it’s shelf life. A vacuum packed meat product stayed fresh without any significant pathogens for long time. Similarly a cling film wrapped cucumber stays fresh for over two weeks, while an unwrapped one loses moisture and becomes dull in 3 to 4 days. Apart from freshness, Fruits and vegetables packed in trays and bags reduce their wastage due to handling anywhere between 5 to 20 percent depending on the food item. Well designed packaging also speeds up the movement of the product, due to easy handling. There is a lot of innovation in packaging that food supply chain companies should look into.
  3. Transportation. Cold transportation is not new. There are active cooling trucks (with actual refrigeration and passive cooling trucks that are basically thermally sealed. Wha’ts interesting however is the temperature gradient inside the trucks, once they are loaded. Most transporters simply ‘stuff’ the truck with products without much thought to placement of product to maximize its shelf life. Even in regular trucks the temperature of food right in the centre of the truck is different than the temperature at periphery. This can have large impact on the life of the product. Even in cold trucks if they are stuffed and the center is not cool enough, the food loaded in the centre has higher chance of being spoiled. Not only the temperature, but the way fruits and vegetables are loaded can have large impact on their life. Can you imagine berries at the bottom and potatoes at the top, going over a bumpy ride?
  4. Increasing decision points in Supply Chain. Most products don’t go from point of production direct to retail shelf. There are multiple hubs and distribution points between the point of production and point of final sale. However with technology, more and more decisions are being centrally. The decision points need to be decentralized and local intelligence specific to the distribution point needs to be utilized for maximum utilization of product. Products with shorter shelf life should be sent to high turnover outlets so that they can be sold before they expire. The principle of ‘First Expiry First out’ should be followed rigorously. Smarter decisions about product movement can be taken locally depending on local conditions such as weather. If the weather is nice and sunny, the demand for barbeque related products will increase. If its cold, the juicy fruits (e.g. watermelon) would be expected to move slowly and can be shipped to other warmer areas.
  5. Cost factors. Food industry often operates on low profit margins. Subsequently all the processes are designed for cost optimization. However lower cost may not always be the best solution. For example, organic food needs to be delivered quickly. The demand for organic food is increasing and it also has higher margin. So supply chain invests a little more in quick delivery of organic food, it can capture both, the volume and the higher margin, thus offsetting the cost and making more money.  A retailer in USA capitalized on this model by making quick deliveries of Organic, less processed oils. The retailed made express deliveries right from the production point and thus maximized the shelf life of oil available to the consumer (about 3-4 months). it’s competitor’s distribution processes itself took 3 to 4 months and thus could not compete.
  6. Production Location. Point of production is also a key factor in supply chain. The closer it is to the consumer, the smaller the chain and lesser the chance of waste. Many organization prefer to have production plants closer to the source of raw material. It reduces the transportation cost of raw material, but increases the waste in subsequent supply chain. With modern technology and transportation options, it is easier to transport bulk raw material to the more distant plant. It also provides for the maximum shelf and storage life once the product is leaves the production plant.

 

Some Food wastage is inevitable. Food will rot, get spoilt and will face some logistical issues. However the amount of food that is wasted currently is unsustainable. The higher environmental cost of this waste will be borne by the next generation; all while there still 700 million hungry people around the globe. If nothing else, the economic cost of the food wastage in itself makes a great business case to stop the wastage as soon as possible.

5 ways to save your logistics cost

5 intelligent ways to cut down your logistics cost

Logistics and supply chain are the essential links of any business. Regardless of being a manufacturer, distributor, importer, retailer, or an e-commerce business, logistical issues are imminent. They may include order fulfillment, warehousing, material handling, e-commerce fulfillment or any other logistical aspect. It would be smart to find an optimized 3PL solution to cut down your distribution costs. For businesses small and large, any savings in revenues means being more competitive in the market.

There are various ways to cut down your logistics costs. Here are five intelligent ways to cut down your logistics costs and envelope a wholesome approach to cater for all kinds of businesses (small or big).

  • JIT- Just in time management

With the introduction of better global communications, logistical grouping and faster means of delivery, the alternative concept “just in time” follows the minimalist approach. Leave it to your 3PL company to provide you with the resources you need just in time to fulfill your orders successfully.  The concept calls for generating required logistics just in time to cancel out logistical costs incurred on procurement, maintenance, and inventory of such requirements.

  • Collaborate

All businesses have seasonal inventory fluctuations (especially e- commerce related businesses) for which the inventory levels drop to minimal for quite some time each year. Logistical costs like manpower and space hired outweigh the benefits acquired from  such arrangements. Companies might have to pay for un-utilized storage spaces under such circumstances. A smart way to handle such situations is to collaborate with third party logistics providers who carry the requisite structures to handle your needs.

  • Don’t outsource, insource

Let the experts handle it. After finding your collaborative partner, it’s time to let go. Let the experts join your team to review logistics, gather market feedback, and do the heavy lifting (no pun intended). Such partnerships will help you a great deal in reducing your logistical footprints and costs.

  • Regionalized Partnerships can be most beneficial

Logistics are more about ground presence in most cases and it has more regional implications than global ones (for most operations). Benefiting from logistical resources of other regional players while offering from yours is a win-win situation for all. While you compete in some fields, you can cooperate with others to derive logistical benefits and reduce your costs.

  • Power of analytics

This stands true for every business in the world. Investing a little in logistical analysis software will help in making successful business decisions using detailed data points.

http://sungistix.com/ is a smart 3PL fulfillment solution provider which can help you virtually in any logistical quagmire.