The fight against waste by reducing unsold goods
According to ADEME (French Environment and Energy Management Agency), in France, 10 million tons of food and many other products, whether essential or not, are wasted in a cycle of destruction or recycling without having benefited anyone, thus generating costs and impacts at all levels. Fighting against this scourge has become a major issue to which the French are giving more and more importance, whether it is for food or non-food products.
The consumerist consciousness we inherited from the post-industrial era culminates today with the preponderance of the ecological necessity that has become law and responsibility for the planet as well as the protection of the environment. But how effectively can we address this issue? All the companies that make this market economy are the first to be able to act efficiently upstream and for that, many solutions can be used, like a sales forecasting tool.
A real waste at all levels
Waste is a sad necessity of any human activity. Because as soon as we innovate, try, produce, distribute, consume, recycle or destroy, the waste of material, energy, time, costs, etc., is inevitable. It is therefore utopian to think that we can reach a zero waste level. But moving towards a virtuous goal of zero waste must be the leitmotiv today of every company and all the actors concerned, starting with consumers (by making sure they respect the shelf life of food, by finding the balance between their needs and their consumption, by setting up waste recycling initiatives, etc.).
But consumers are not the only ones who can significantly influence these trends that have become citizen and responsible actions. Companies are also affected, especially since the synergy between efficiency (and therefore costs) and economy (by avoiding waste) brings them closer to their profitability objective, the center of gravity of their actions on a given market.
Whether it is in the food industry, as in the retail or catering sectors, in industry (regardless of the products), in the transport sector, in the service sector, etc., waste is systematically a source of penalties that constrain profitability, and all the more so as the leverage effect is important for a company with regard to a single individual. Increased vigilance at all times is therefore required to ensure the sustainability of a company.
The competitiveness of certain sectors may even depend on the control of waste and the ability of a professional actor to reduce it or to take it into account in its production process. For example, in the field of goldsmithing, it is easy to understand the impact that total control of raw materials can have and to ensure that almost all the available mass is correctly used by avoiding any waste.
The role of unsold goods at the heart of wasteTo give you an idea, the waste due to unsold goods (food or not) is estimated at nearly 800 million euros of new products each year in France! This is particularly the case for fruits and vegetables which, with a very short consumption date, are part of the "top wasted food" as well as all the kitchen waste from restaurants. So many items produced, transported (or not), distributed (or not), but not consumed and destined for the most part to the only destruction, their sale never having taken place. In France, a law dated December 13, 2019, prohibits the destruction of unsold goods. This illustrates the concern of public authorities to take hold of this aberration of unsold goods in order to incite, or even force, manufacturers to integrate these ecological and economic concerns at the heart of their marketing and production processes.
Together with the 10 million tons of food products mentioned above, we can easily understand the stakes related to the control of waste and particularly the role of unsold products in this sad record.
A company must now remain competitive on the market, by offering quality, price and availability, but also eco-responsibility, which is increasingly correlated with the management of waste and indirectly of unsold products. Consumers are becoming more aware of this aspect and more and more informed and aware of the eco-impact of the brand they consume (thanks to consumer associations, the omnipresent media, social networks that report information - or misinformation - at a dizzying speed) and their preference will now be for an actor who is effective against waste. The control of the latter is now leaving the private sphere of a company (which could still afford to waste as long as its profitability allowed it) to invite itself to the heart of the public debate and under the fire of the critics of customers and consumers who have integrated this requirement of eco-responsibility as part of the constraints to which they attach specific importance.
Solutions to reduce unsold goods existIt is essential to integrate the fact that the fight against waste due to unsold goods is a collegial issue that involves all the players of the same market: from the consumer to the producer, the awareness must be full at the level so that the result is achieved. A single actor in this group can act, but the gain will be exponential if, and only if, there is coherence throughout the supply chain, which can be summarized as all the physical and information flows that go from the supplier's supplier to the customer's customer.
Therefore, the amount of information and flows to master is colossal! Imagine what it means to integrate in the same equation:
- the legislative restrictions applicable to the production, distribution and consumption areas;
- the threats and opportunities of a market;
- competitive intelligence specific to a given sector;
- forward sales forecasts;
- production line schedules;
- purchase and supply orders for the necessary materials;
- the human, material and financial resources required;
- the market prices to be determined in order to balance the production with the expected sales;
Of course, IT solutions (such as SCM software) will help you understand the complexity of these variables, but above all, they will allow you to control your logistics at all stages by including your upstream and downstream partners, who will then be able to share and perform information in order to optimize them.
But technology is moving fast, very fast, and artificial intelligence (AI) is already taking over and reinforcing the skills of predictive models, improving them, and sometimes even revolutionizing them. Today, some companies on this market offer innovative solutions to fight efficiently against waste and unsold goods. Imagine the computing capacity of a cloud added to the quantity of information of a "big data" database, both coupled with an intelligence approaching human intuition minus cognitive biases. The result is a reliable, proven prediction model that learns continuously (machine learning).
In concrete terms (and on a smaller scale of complexity), let's take the example of the food industry, and more specifically the restaurant industry. Imagine an artificial intelligence capable of taking into account the preferences of customers according to multiple criteria, such as:
- experience, thanks to the analysis of the food consumed in the past in the restaurant and the highlighting of highly ordered products by reducing the probability of less ordered food products;
- seasonality, because AI can deduce that depending on the season and the weather of the day, certain foods will be more favored;
- fashion, since a model created for continuous learning can take into account certain fashion criteria based on social networks, continuous publications, etc., to weight its model;
- news, as a scandal on specific foods can directly impact the sale of a type of food product, an AI can detect its existence and take this impact into account;
- culture, an AI could increment its calculation bases according to local preferences depending on the country or region concerned;
- safety and hygiene, the AI could be connected to any base (state or private) that would have the authority to alert on specific food hazards that are present would allow to avoid in real time the distribution of dangerous products.
AI-based forecasting software is a future solution that will become an essential criterion for competitive success. The application of an integrated or modular architecture (depending on the needs and objectives of your company) will meet your requirements. The qualities of an AI capable of ubiquity, universality and accountability to your market players will make the difference with your competitors.