How Supply Chain Visibility is Tackling the World’s Food Waste Problem

2/27/2020

Fresh produceBy Lisa Magnuson

The next time that brown spots and mushiness make you consign that last banana to the compost heap, you may rest assured that your commitment to your own health safety has contributed to over 27 million tons of wasted food.

Waste and safety go hand-in-hand in the food industry’s supply chain. One is a driver of the other. In the name of safety, freshness standards and sell-by dates mandate that unsold food becomes waste. Any compliance failure can result in consumers who become ill—or worse. It also can mean recalled products, damaged brands and highly-publicized government sanctions that include substantial financial penalties.

Inefficiencies of food industry supply chains are having a huge impact around the world. The magnitude of the waste is extraordinary; in the United States alone, consumers, companies and farms spend $218 billion per year (1.3% of GDP) to grow, process, transport and dispose of food that is never eaten. That amounts to 52 million tons of food that’s sent to the landfill every year. The BCG estimates that by 2030, annual food loss and waste globally will hit 2.1 billion tons, worth $1.5 trillion.

According to The National Resource Defense Council, if we could rescue just 15% of the food that we waste, we would save enough to feed 25 million Americans each year.

The good news is that food waste is a solvable issue. According to ReFED, over 20% of annual food waste can be reduced over the next ten years through a variety of solutions. Consumers can do their part by eating their fruits and veggies while they are still fresh. (Fully 40% of food waste consists of fruit and vegetables.) In addition, a tremendous amount of waste can be eliminated by the food logistics industry tightening up the supply chain. Here are just a few methods for reducing food waste:

  1. Supply Chain Infrastructure/Cold Chain Management: Retailers and manufacturers can improve cold chain management performance standards. Larger retailers can push for cold chain certification standards for food carriers. Deploying more advanced supply chain solutions can reduce the food waste problem by $150 billion every year, according to the Boston Consulting Group (BCG).
  2. Supply Chain Efficiency: Digital supply chain tools can make transactions in the supply chain more efficient and seamless, enable the tracking of loss and waste, and even allow for dynamic pricing, which can move products through the system before they expire.
  3. Manufacturing Line Optimization: Manufacturers can work on optimizing equipment operation conditions and address production line design flaws in order to decrease waste.

Technology-driven improvements such as these could reduce waste by $270 billion, according to BCG.

The promise of Industrial IoT in the food supply chain may be most critical at the confluence of perhaps its two most acute challenges: waste and safety.

For the food industry, it all starts with real-time visibility into supply, distribution and other value chains.
That means continuous monitoring of critical environmental conditions and location provides the right data to lead to actionable insights that enable big and small adjustments in quality control, logistics management and inventory movement. Key improvements can address product lead times and inventory shortages. But the big impacts are in reducing waste and improving the efficiency of the supply chain.

Typically, monitoring dwell times, temperature and other aspects of the condition of the product in motion. Is the sustainably sourced fish cold enough on the shipping pallet? Did the arugula sit too long on the loading dock?

It also takes digitization at the edge, so supply chain managers can act quickly on their insights and adjust on the fly. Continuous adjustments of shipments, dwell times and other conditions can mean a fresh product maximizing its time on those shelves.

Tracking the location and environmental condition of ingredients enables a food manufacturer to minimize the kind of environmental damage that results in rejections of its shipments. It also allows the manufacturer to monitor and improve safety and cleanliness. Recent outbreaks of salmonella and e-Coli are driving heightened regulation, surveillance and enforcement by government. It’s no secret that compliance is becoming increasingly stringent while non-compliance is becoming increasingly expensive.

Similarly, tracking the sale of the product at each vendor location ensures a finger-on-the-pulse of the demand for that product. With enough data, the manufacturer can predict demand for a product whose delivery is optimized. That’s when Industrial IoT’s return-on-investment can be off the charts.

With Cloudleaf’s platform, stakeholders can capture product-level attributes of heat, humidity, vibration, and other conditions. That means shipping pallets and containers can be tagged and tracked by zone sensors for organization and easy pick-up. Produce can then be loaded, unloaded and tracked through various zones across a range of temperatures. Verifying food and ingredient conditions as well as transaction handoffs dramatically lower food waste and compliance costs. With Cloudleaf, stakeholders have greater visibility into the entire handling process, and this visibility minimizes the impact of recalls, helps manage movement of perishables, and reduces global food waste.

Cloudleaf transforms supply chains into data-powered strategic assets and engines for innovation. By creating a digital twin of operations, Cloudleaf illuminates the dark spots in your supply chain, providing continuous visibility and intelligence, from the source to the end customer.