Fresh Forecasting: How to Reduce Food Inventory Waste
The food industry is a tough one. They face penalties for late or incomplete deliveries, and are at constant risk of product expiration, spoilage, and contamination. The causes of food waste are numerous. Food waste can occur anywhere within the supply chain, from the farm to food manufacturing, retail, distribution, and, in most cases, by the final customer.
It is estimated that roughly one-third of all food produced in the world for human consumption becomes food waste. Not only does this have a significant impact on an organization’s profitability, but it also has far-reaching environmental, social, and economic repercussions.
Where is food waste occurring?
The best place to start when looking to control inventory waste is to find out where it is coming from. One way to achieve this is through a food waste audit, which measures and tracks the amount of food waste occurring in your supply chain.
Is the waste due to improper handling, spillage, cooking mishaps, or inadequate cooling and storage? Measure and record the quantities of waste and where within your supply chain it is occurring; what and how much food inventory is wasted due to errors, perishability, and overstocking. The audit process is an ongoing task, and food waste should be continuously checked and monitored to identify areas for improvement.
How accurate is your inventory forecasting?
Most organizations can agree upon the importance of strong and accurate forecasting. The more precise the forecast, the lower the risk of overstocking. Optimized demand forecasting assists in minimizing food inventory waste, maximizing production efficiency, and streamline purchasing.
Having a robust and detailed forecast will consider both historical data and real-time conditions. Food inventory forecasts need to integrate all relevant data to make accurate and profitable decisions to reduce inventory waste.
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Optimized Inventory Control
While every organization works hard to prevent spoilage, most lack the necessary tools and information needed to analyze “the what and why of” food waste. Automated tracking of products can provide greater insight into where and how food waste occurs specifically within the supply chain.
Organizations should leverage technology to improve inventory control parameters for each inventory item, including factors such as handling and temperature control requirements, shelf life, and expiration dates.
Optimizing inventory control is important to the overall health of an organization. Knowing food inventory types and volumes helps manage food inventory freshness and quality, improve operation efficiency, and reduce food shrinkage and waste. Modern cloud-based systems, such as Vanguard Predictive Planning™, ensure robust, high-quality data capabilities that support advanced supply chain planning and optimization.
Automated Inventory Replenishment
Using the results from demand and food inventory planning, replenishment planning provides visibility for future demand, which helps to accurately project product and food inventory needs and determine the actions required by suppliers and manufacturers to satisfy demand efficiently.
Replenishment planning can help organizations develop cost-effective strategies that ensure rapid replenishment cycles and higher customer service levels while still reducing costs.
For manufacturing, replenishment planning helps develop capacity plans and detailed schedules that consider limitations, optimize changeovers, and lower the inventory of raw materials and finished goods.
For sales and operations, replenishment planning can transform data from all areas such as sales, productions, marketing, and procurement into a central resource for analysis and decision making.
Food Waste Reduction
Food waste is no longer just an issue of lost revenue and profitability. The ethical, environmental, and social impact of food waste is such a global concern that many governments have addressed it as part of their environmental and sustainability policies. All-in-all, any step toward reducing or eliminating food waste is a step in the right direction.
To learn how Vanguard Predictive Planning can further assist the food industry in forecasting, request a demo.
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