Financial waste in the supply chain 

by Muddy Boots

Financial waste in the supply chain 

Waste - be it financial, material or resource is the enemy of efficiency and effectiveness. In the agri-food industry there is now more pressure than ever to cut down on wastein order toreduce costs, improve return on investment, manage resource and reduce the environmental impact of operations.  

In order toreduce waste in supply chains, businesses must look at their product or service and identify ways in which it can be made more efficient and sustainable. Theres no doubt that going digital is a smarter way to work, making your internal and external operations as efficient as possible. Tackling areas of waste with a sophisticated cloud-based solution such as Greenlight Supplier Management and Greenlight Quality Management provides the visibility, transparency and improved decision making needed for waste reduction.

Waste management in a circular economy

A circular economy encourages diversity of production, with shorter supply chains and reduced waste. It harnesses digital technologies to measure, track and locate food and other organic materials. Defined by the European commission as ‘The value of products, materials and resources is maintained in the economy for as long as possible and the generation of waste is minimised

There are three main cost-effective reasons for organisations to make efforts in improving their waste position

1. If those that produce the waste are charged for the full environmental cost, it in turn becomes more cost-effective to reduce the amount of waste they produce
2. It can be profitable to reduce waste because the raw material charge also decreases
3. An improved environmental position can strengthen customer loyalty, which is beneficial in a favourable market position

Reducing the cost of waste

The reduction in waste will produce cost savings greater than the initial investment, waste minimisation programmes can be successful in improving your product offering as well as reducing overall costs.

Key areas to tackle

• Digitise your quality management by capturing product quality, process and facility and safety checks into a cloud-based solution, saving both time and money
• Address environmental issues a recent study reported that ‘waste reduction and water-efficiency improvements were the sustainability goals perceived as most likely to have a financial benefit.
• Cold chain management temperature consistency ensures the quality of products as they move through their respective supply chain, reducing wastage caused by an acceleratedshelf lifeloss
• Supply chain transparency understanding the origins of your product gives you the opportunity to build a more direct supply chain improving operational efficiencies