Top 5 Ways Demand Forecasting Reduces Food Waste
/A recent comprehensive assessment of world wide food waste by the United Nations found that we waste 1 billion tonnes of food per year. Food wastage is responsible for around 10% of the emissions driving the climate emergency, and food and beverage manufacturers also occur great expense. According to the UN, food waste is defined as “any removal of food from the supply chain which is or was at some point fit for human consumption”, and the UN continues that this is “mainly caused by economic behaviour, poor stock management or neglect”. However waste can be significantly reduced for food and beverage manufacturers via the adoption of Demand Forecasting tools. These detailed forecasts help reduce food waste in these top 5 ways!
1. Meeting Demand for Fresh and Organic Produce
Those manufacturers investing in the development and production of fresh, organic produce, know the challenges faced when it comes to food waste. Their products are free from additives and have a naturally short shelf life. Fresh food is perishable and thus requires daily forecasting and daily replenishment. Demand Forecasting and Demand Planning Software, using machine learning (ML) algorithms can “learn” from data and make predictions based not only on historical sales records, but many other important data points: from public holidays and changes in weather.
2. Optimising Traceability and Reducing Recalls
Almost all food and beverage companies work hard to reduce spoilage, but many lack the data to understand the precise nature of the food waste. Traceability solutions can track every product by its constituent ingredients, and its vendors, providing greater insights into the overall supply chain. By differentiating the supply chain paths of each ingredient, and investing in ‘farm to fork’ (‘farm to table’) traceability, manufacturers can increase the efficiency of their operations by reducing overall levels of food waste.
3. Improving Transport Efficiencies
The unnecessary transport of goods is another inefficiency and waste that can be reduced by adopting accurate demand forecasting tools. And optimised matching tools can be leveraged for a ‘first-expired-first-out strategy’ — matching the remaining shelf life of a product and its expected transport duration.
4. Responding to COVID-19
COVID-19 has had an incredibly diversified impact on the food and beverage industry. Forecasting demand during a global pandemic is challenging. But advanced demand planning and forecasting tools, powered by AI and ML, track live shifts in consumer behaviour, combined with forecasts for virus containment, producing an accurate demand forecast, and ultimately significantly reducing waste.
5. Enhancing Collaboration
Demand Forecasting tools can also form the basis of enhancing collaboration. When retailers and food and beverage manufacturers are given the tools to share real-time data across their supply chain, they will certainly create firm foundations for better long-term collaboration.
Every year there are roughly 700 FDA managed recalls, which results in vast levels of food waste. As a result, the industry suffers an average economic loss of $10 million per recall. Furthermore, only 33% of consumers now trust the safety of their food. If your food and beverage company is looking to scale and grow via ERP solutions, traceability and demand planing software, whilst meeting all the FDA requirements, get in touch with Cashmere today.
