LP Magazine

JAN-FEB 2018

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

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managers and buyers are often tasked to think short term. Further, the capacity required for collaboration, in terms of days and hours, can simply not be available. The Role of Better Collaboration in Food Waste Reduction There is much that retailers and producers can do to reduce food waste without the need for collaboration with other organisations. However, there are also some transformational changes that can only be delivered when organisations collaborate. Below are a few examples. Range and Assortment ■ Joint product innovation from initial conceptualisation to eventual product launch that considers and designs in potential food waste reduction benefits, for example, longer shelf life, shorter supply chains, or reduced case sizes. ■ Joint development of range and planograms by type of store and format using metrics such as the fresh case cover (FCC) that can prevent food waste. By way of explanation, the FCC "score" is a function of the weekly sales rate, the shelf life, and minimum case sizes, and can help the range and space planners identify the SKU/store combinations with the greatest risk to food waste. To mitigate that risk, the planners can reduce the range to potentially increase the sales rates of each remaining SKU. They can seek ways to extend shelf life or work with the supply chain to reduce minimum case sizes. ■ Joint development of innovative packaging and display fixtures that can improve shelf life and give the impression of abundance without the need for excessive volumes of product on display and the consequent higher risk of food waste. Planning ■ Joint forecasting of forward sales through the combination of available information that also includes past waste performance data. ■ Joint planning of promotional volume to also include using food waste data from previous promotions. Supply Chain ■ Joint short-term demand generation activities to sell excess quantities to the consumer to try and avoid waste. To illustrate the benefits and results from collaboration, the ECR Group has started to collect evidence from joint projects. Below are examples of three case studies: ■ Case Study 1. One retailer responded to the news from its suppliers of a bumper harvest of cauliflowers with the development of new in-store demand-generating promotions (recipes, extra displays, and price discounts) that helped sell through to the shopper the more-than-forecasted volumes, ensuring that produce was sold, and not left to rot. ■ Case Study 2. One manufacturer worked with a retailer to create a new product made up of unused raw materials, thus saving those materials from being wasted. This new line item is now being sold in the retailer's stores. ■ Case Study 3. One manufacturer and retailer partner worked together to improve the percentage of every crop that was purchased by consumers by repurposing and processing the off-standard and oddly shaped products into other products such as ready-made meals and frozen varieties of the product that would then be sold in the retailer's stores. This collaboration prevented significant quantities of product being fed to animals or thrown away while also improving profitability for both organisations. Towards Better Collaboration While the ECR Group has yet to finalise the full details of the maturity model, three major findings have already emerged from the research. Finding 1: Collaboration on food waste must be declared a business priority by the organisation. Organisations that are mostly likely to be strong collaborators on food waste are also likely to have declared at the CEO level that food waste reduction fits their company strategies. In these organisations they will have: ■ Awareness that food waste reduction is critical to the achievement of the company's corporate goals and must be prevention focused and end to end—from farm to fork. ■ A vision and an alignment on how to systematically share sales and food waste data. ■ Confidence that there is a business case for collaboration that ensures a win-win for both suppliers and retailers. ■ An approach that is well structured with aligned rules of engagement for collaboration. Further, those organisations that have recognised the importance of collaboration on food waste will typically: ■ Promote internally a collaborative mindset where multidisciplinary thinking and collaboration are actively fostered and incentivised. ■ Identify the right people in the right positions to be dedicated to delivering successful collaborative work. ■ Ensure there is full transparency of key performance indicators, such as cost and time, across the whole supply chain. ■ Ensure the full availability of timely, accurate, and formatted inventory data. Collaboration can only happen when data is shared, yet accessibility to the right level of inventory, food waste, and sales data by store and by SKU is a barrier, with some retailers choosing as a principle not to share data. COLLABORATION ON FOOD WASTER REDUCTION 47 LP MAGAZINE | JANUARY–FEBRUARY 2018

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