The right ERP system can facilitate food waste reduction efforts by food manufacturers and distributors
Around the globe, food waste is a vast problem plaguing the food production and distribution value chain. According to the Food Waste Reduction Alliance, close to 60 million tons of food waste was generated in the U.S. alone during 2010. Roughly 40 million of that went into landfills. The Alliance quotes the U.S. Environmental Protection Agency’s findings that as much as 40 percent of food grown, processed, and transport in the country is not consumed, but discarded. At the same time, roughly 50 million people in the United States are suffering from hunger or live in conditions of uncertainty where it is not always clear where the next meal comes from or how nourishing it will be.
Worldwide, close to a third of the food produced for human consumption, roughly 1.3 billion tons, is lost or wasted. Food waste amounts to approximately U.S.$990 billion per year, of which over two-thirds are generated in the industrialized countries. In the developing world, the majority of food waste occurs during harvesting, storage, and transportation. In the richer, industrial countries, food is wasted later in the process, in the production and warehousing of food products and in the retail distribution, which includes grocery stores as well as restaurants.
Increasing awareness and practical responses to the food waste emergency
Food waste is a social problem: There are hungry people in every society. It is an economic issue, with production and distribution companies operating at poor efficiency and the waste driving up the costs of food products. In our environment, food waste in landfills produces methane, which has 21 times the global warming impact of carbon dioxide.
In recent years, savvy consumers and some governments have understood the scale and impact of the problem and taken steps toward food waste reduction. In September 2015, the Obama administration started an initiative to reduce food waste by 50 percent by 2030. France has made it illegal for retailers to discard unsold food, forcing them to donate potential waste to charities. Food waste reduction efforts elsewhere are similar. Many organizations aim to educate consumers and help them manage their shopping and cooking to minimize waste.
Effective food waste reduction requires optimized systems and processes
For the food industry, a problem of such magnitude requires companies to devise a systemic approach to how they plan, produce, source, and distribute food products. Their processes and systems need to align behind this goal in addition to their objectives for growth, productivity, and competitiveness. ERP systems and other business technologies have to facilitate food waste reduction along with other strategic initiatives.
Our industry solution, To-Increase Food Warehousing and Distribution for Microsoft Dynamics NAV, enables food companies to run their operation on a unified infrastructure that is optimized for their business requirements. As our short issue paper 'The right ERP system can help companies stop wasting food and resources' points out, the solution also plays a role in effective food waste reduction. Food Manufacturing and Distribution assists companies in achieving this mainly through:
- Demand-driven planning and production
- Quality management within the company and its supply chain
- Effective metrics to drive food waste reduction
- Timely redistribution management
If you have any questions or comments, or would like to see how Food Manufacturing and Distribution can help you in your food waste reduction and business management, we should connect. Get in touch with me or contact To-Increase.
Renaldo Torcque
