Towards a crowd sourced supply chain

In Supply Chain by Darren Smillie

“Are food Instagrammers really to blame for food waste?” So asked a recent article on the BBC based on a new report into household food waste published by Sainsbury’s.

Recognising the responsibility

The very fact that this study was commissioned by a major retailer shows the change in the supply chain in recent years towards more of an end-to-end, consumer-focused and responsible perspective, in recognition of the differential this creates in a highly competitive market place.

I remember a few years ago, Tesco became the first UK retailer to openly release detailed statistics of food waste across their supply chain and across categories. Far from being universally praised for their openness and recognition of the problem, instead they were subjected to a decidedly “mixed” response with headlines like Tesco blasted for food waste as 28,000 tonnes binned not uncommon. Unlike what normally happens when such things are published openly, the other major retailers did not follow suit immediately with quite the same level of detail, although things have since moved on.

Tesco’s study was fascinating as it showed the relatively small proportion of food waste which occurred within the retailer’s operations (testament to their incredible forecasting capabilities relative to the scale of the challenge with such expansive ranges and variable weather, despite what you may feel when that product you want is sold out). Far more food waste occurred upstream in the supply chain, for example on the farms, and downstream within households.

However, Tesco recognised that where a problem is manifested is not necessarily where the problem is caused. Retailers have a huge role to play in reducing food waste upstream by forecasting collaboratively with suppliers and through better planned and executed promotions. Meanwhile, they can influence shoppers to waste less through numerous means, not least through running responsible promotions. Indeed, Tesco did make a start in response to their own investigation by reducing multi-buy promotions on products like bagged salads.

Owning the opportunity

Back to the opening question. We all recognise negative influences on the shopper which drive food waste, and what can be done to minimise these. However, is it possible to aim bigger and have a net positive impact on waste through influencing shoppers, reducing not only waste that is driven into the household but also waste that would otherwise have been manifested in other parts of the supply chain?

This is already done by incentivising the purchase of fresh food nearing its sell-by date through the judicious use of yellow stickers, which has even fuelled a sub-culture of bargain hunters. Optimising these reductions can be extremely powerful even if this is usually motivated by a financial measure of food waste rather than a physical quantity.

While I was at IGD I shared, in a report on data driven supply chains, how technology could soon be deployed to tackle this in a more intelligent and targeted way. As the internet of things becomes ever more prevalent, it’s only a matter of time before retailers have information on the products in consumers’ smart fridges. Where products are nearing expiry, this can help to trigger anticipatory actions such as ordering and replenishment. Retailers could also push recipe suggestions which incorporate these products to help households consume them rather than throwing them away.

Going one step further, retailers could cross-reference the products in a consumer’s fridge, whether expiring or not, with a list of products nearing expiry in local stores and with a database of recipe suggestions. Where a consumer is missing a single ingredient from a recipe, which happens to be nearing expiry in a local store, they could be sent the recipe suggestion alongside a personalised reduction for that expiring product. This could therefore reduce food waste in the store while also boosting footfall and sales.

We are not there yet, but with 100 billion connected devices forecast by 2025, we need to start thinking of innovative solutions like this so we are ready to take hold of the opportunities as they arrive.

Mobilising the masses

This example is just the tip of the iceberg for supply chain engagement with consumers. Could more of a more “crowd sourced” model solve some of our big challenges in supply chain while engaging and driving loyalty with shoppers and creating opportunities for communities?

Online ordering itself is a form of crowd sourced forecasting. Not only does it give you complete clarity on what a subset of shoppers will purchase ahead of the effective purchase (occurring at the later time of picking), it also gives you early visibility of trends in purchases that might be about to occur in stores. Social media mining and the nascent internet of things will only enhance this consumer level viewpoint. However, all of these examples are fairly “passive” for the consumer.

More radical thinking is needed to bring about an active role for the wider public in supply chains. For example, a number of players have already emerged in the crowd sourced grocery home delivery space causing sufficient disruption to motivate the retailers themselves to investigate using this model directly.

What other supply chain processes could be crowd sourced? Probably the most important measure of supply chain success is on-shelf availability. Currently, many retailers monitor and rectify availability issues through a manual scan of gaps on the shelves. Why couldn’t shoppers be empowered to scan gaps themselves as they spot them while they happen to be in the store, or take photos of empty shelves, through an app which feeds directly into the store replenishment systems, triggering a targeted response? For every, say, 10th gap identified the user could be rewarded with a coupon or discount, therefore driving continued loyalty.

Those are just a few ideas and examples of the burgeoning potential of a crowd sourced supply chain. I’d love to hear more of your ideas. Bottom line, if you are not thinking about how to involve your shoppers in your supply chain solutions, it’s quickly going to start to feel like you are staring at, not standing on, the mountain.