Late last year, ECR Community hosted a workshop in Prague, Czech Republic, which focused on new innovations that are helping to reduce waste through collaboration. This article previously appeared in ESM Issue 1 2018.
T he year 2018 is likely to see new advancements in tackling food waste along the supply chain, with greater collaboration between all participants leading to significant achievements in this area.
That’s according to the ECR Community Shrinkage and On-Shelf Availability Group, which hosted the ‘Sell More, Waste Less’ workshop at Prague’s University of Economics (VŠE) at the end of last year.
The event welcomed more than 60 delegates, including retailers’ buying, supply-chain and waste-prevention experts, as well as producers and academics. ESM was a media partner for the event.
One of the main discussion points was a new collaboration model, the Food Waste Collaboration Maturity Model, developed through a partnership between the ECR Community Shrinkage and On-Shelf Availability Group, Oliver Wyman management consultants, and Kühne Logistics University (KLU), in Hamburg.
The model encourages the advancement of collaboration capabilities, as well as the introduction of greater cross-company supply-chain visibility, including the sharing of transactional data and sales forecasts. The aim is for the model to become a de-facto user manual on industry guidance for joint food-waste collaboration.
“Where retail industry partners struggled over the years to build effective collaboration with the aim [of reducing] losses and, more [specifically], food waste, the tool will be a pragmatic game-changer to better connect retailers and manufacturers and align their competencies and objectives,” said John Fonteijn, global asset-protection leader of Ahold Delhaize and the ECR Community Shrinkage and On-Shelf Availability Group’s chair.
Understanding Collaborative Maturity
Following the opening presentation from Oliver Wyman’s Jens Torchalla, on fresh produce as “the most effective lever to differentiate” within retail, Dustin Wisotzky (also Oliver Wyman) and KLU’s Suyash Shrivastava formally introduced the collaborative maturity model.
The presenters highlighted how previous collaborative ventures have helped to “drive quantum leaps” in food-waste reduction, including a 25% reduction in fresh-convenience waste and a 20% reduction in cheese/dairy-product waste, and explored ways in which improvements on these figures are achievable.
As the speakers revealed, the new collaborative maturity model enables actors within the food-retail sphere to assess their sweet spots when it comes to food-waste collaboration, as well as their Achilles heels.
As well as serving as a pragmatic tool for assessing the current state of food-waste collaboration, the model supports the identification of areas in which improvement can be achieved. It is useful in terms of self-assessment, as well as alignment with current or prospective collaborative partners. It is, in other words, a valuable starting point from which collaborative agreements can prosper.
“Reducing food waste is an important responsibility retailers face – not only to increase their profitability, but also to improve their sustainability footprint,” Wisotzky explained.
“One of the most effective ways to reduce food waste is closer collaboration between suppliers and retailers in terms of joint planning and forecasting, alignment of production cycles, and innovations – just to mention a few examples. Due to commercial and legal restrictions, such collaborations are not easy to set up, and a lot of trust and goodwill is required.
“We hope that this new framework will support and ease future collaborative efforts and lead to reduced shrink and better relationships between suppliers and retailers,” added Wisotzky.
For each aspect of the collaboration, the level of maturity is assessed on a scale from rudimentary (0) to world class (4), enabling participants to assess the areas in which progression on collaboration can best be achieved.
During the pilot phase, which commenced in September of last year, important areas in which companies could assess their readiness for collaboration included supply-chain transparency, availability of stock/inventory data, and the systemisation of forecasts, while, in terms of setting up collaboration platforms, areas such as resources, sharing benefits and purposeful data-sharing were among the factors considered.
Following this test phase, the model has now gone live and is expected to be a valuable tool going forward in the battle to tackle food waste along the supply chain in the years to come.
Be Fresher, Sell More, Waste Less
The workshop also played host to an insightful presentation from Rob Broekmeulen and Nevin Mutlu of Eindhoven’s University of Technology on the findings of the Sell More, Waste Less report, which seeks to improve the performance of fresh supply chains and determine what is currently lacking when it comes to waste reduction.
A key dynamic through which the waste potential of a particular category can be monitored is the Fresh Case Cover, defined as the case pack size divided by the average demand during the store’s shelf life. As a recent study revealed, this single variable can explain 42% of the variation in waste.
Broekmeulen and Mutlu examined the level to which shelf life has an impact on product availability, waste and freshness, determining that increasing the shelf life by just one day can be a major contributing factor to these areas. Improved supply-chain collaboration is a key means for achieving this.
In addition, reducing case pack size can also have an impact on shelf, with shoppers more likely to ‘grab and go’ a product that is of a very manageable size. Again, this requires greater supply-chain collaboration.
Another factor identified by the university was the fact that the large difference between the size and shape of stores can influence the level of waste therein – yet another factor that requires greater collaboration along the supply chain.
Emanuela Casalini, a bar-code specialist with GS1 Italy, was also on hand to examine the level to which the GS1 DataBar – a bar-code solution that extends the possibilities for product identification in the fresh-produce sector – has reduced waste at hypermarket chain Iper.
As part of its project with Iper, which saw the chain introduce the DataBar to variable-weight items in store, GS1 sought to allocate a Global Trade Item Number (GTIN) to each product, capturing the exact weight of each variable-weight trade item sold at POS and automatically recognising expired products, preventing their subsequent sale.
“The fight against waste should be seen more and more as a process that needs to be addressed in a supply-chain perspective,” Casalini explained. “The search for synergies among production, retail and consumers is fundamental, not only for finding new solutions, but, above all, for making a cultural change that will allow a new and better balance of ethics and environmental issues.”
The positives emerging from the study include the fact that a cross-functional implementation plan could be developed right across the organisation, while, on the ground, benefits include reduced hours in checking expiry dates, avoidance of regulation fines for out-of-date violations, and consistent product identification for variable-weight products.
The negatives are few, other than the need to coordinate different solution providers and install updated hardware solutions that are capable of managing more information.
Overall, the lasting impression was clear: in terms of tackling food waste, the retail sector is entering a brave new world.
For more information, visit www.ecr-shrink-group.com
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