The following Supply Chain Matters commentary is our second in a series exploring the rather significant amount of food waste that occurs across global regions and their associated supply and distribution networks. We explore how applied use of technology in the notions of more agile food supply chains can mitigate overall food waste.
In Part One of this series, we provided background for both the prior and current COVID-19 industry supply chain environment. We also touched upon how food supply chain participants have an important role to play in reducing or mitigating food waste.
In this commentary, we explore how technology can also play a meaningful role in this effort.
The New Evolving Agile Food Supply Network
Businesses and other food supply network participants that are managing to operate more efficiently and with agility during this pandemic have further been able to leverage technology to:
- More rapidly adjust or pivot supply plans to integrate added suppliers, contract manufacturers or new logistics routes. This includes modifying food packaging techniques to accommodate more online customer fulfillment needs.
- Leverage more intelligent overall inventory or just-in-time inventory management processes to ensure stock is available in what channel it is needed, or to help mitigate added food waste. This includes deployment of product monitoring or tagging technology that can leverage electronic monitoring or Internet of Things (IoT) enabled devices to alert to the possibility of potential spoilage before it occurs.
- Pivoting supply network processes to be able to respond to added direct-to-consumer customer fulfillment needs as traditional brick-and-mortar food channels were temporarily closed.
Here are a few examples:
Land O’Lakes, one of the largest butter producers in the United States and a major provider of cheeses and other dairy products faced peak-level demand for its products at a time when this farmer-owned cooperative typically builds inventory level for the holiday season later in the year. Pandemic related retail channel demand presented this producer with the challenge of not being able to produce goods fast enough or deliver them soon enough to retail channel needs, and it quickly began repurposing food packaged for food service outlets toward retail stores instead. This co-operative was further able to shift production from COVID hotspots where processing was disrupted. Reportedly, no milk had to be disposed of by Land O’Lakes during the pandemic, which is a noteworthy accomplishment.
The Food and Agriculture Association has reported that farmers tend to lose upwards of 20 to 40 percent of their crops due to pests and crop diseases. Founded in 2017, tech agronomy company AgroScout is dedicated to developing advanced technology for early-stage detection of crop diseases to improve yields, reduce pesticide use, and increase farm efficiencies. Farmers are increasingly utilizing technology to reduce waste and increase sustainability methods directed at the beginning of the food supply network. Utilizing Oracle’s Cloud based technology, coupled with use of drones and machine learning algorithms, AgroScout provides farmers with “autonomous scouting” capabilities that can identify potential pest and disease areas sooner, and allowing for selective application of pesticides only when and where needed, which is beneficial for both crops and the environment.
It is estimated that the global restaurant industry spends an estimated $162 billion every year in costs related to food waste. Indeed, the donation of excess food to where it can be best put to use is an important component for reducing food waste. Sweden based restaurant chain Panini Internazionale has been embracing point-of-sale technology to reduce food waste. The system allocates remaining food stock at a 50 percent discount during the last two hours of business, and at the end of the day nearby charities are alerted to pick up remaining stock.
The Computing Technology Industry Association (Comp TIA) is a leading voice and advocate for the $5 trillion global information technology ecosystem and the estimated 75 million industry professionals who design, implement and safeguard technology. The non-profit recently released a video depicting how four emerging technologies- artificial intelligence, blockchain, drones and the Internet of Things- working in tandem can safeguard food supply chains. The Tech Together storyline begins with a fictional news report about an E.coli outbreak traced to agricultural produce that has left several people sick and authorities scrambling to identify the source and scope of the food-borne illness. The narrative shows how technologies deployed along the journey from the farm field to the dinner table can greatly reduce the prospect of such an outbreak. This video can be viewed at this You Tube web link.
The environmental and social responsibility aspects for food waste have indeed significantly come to the forefront prior to and since the start of the ongoing global COVID-19 coronavirus pandemic. Improving overall food supply and feeding global populations remains a significant challenge with the increased occurrence of natural disasters, floods or drought caused by the forces of climate change.
However, technology can and will play an important role in identifying areas of waste before they occur as well as enabling more agile, sustainable and more efficient food supply networks. All supply network participants and we, as food consumers, all have an important role to play and contribute. At the same time, no person or family units should suffer from lack of supply or a basis of affordable food.
From a technology strategy perspective, the real value comes from leveraging the Cloud based interoperability of key technologies that can collectively enhance visibility, alleviate food waste before it occurs, and more efficiently manage food supply among various demand and supply networks.
In the final part of this series, we address the important role that consumers can provide in minimizing food waste.
© Copyright 2021, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.
The above Supply Chain Matters thought leadership series was part of a joint collaboration with Cloud ERP and supply chain management applications technology provider Oracle Corporation.