How to Reduce Your Food Inventory Waste

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Food waste is the food inventory that is discarded, expired, or uneaten; the causes of food waste are numerous. Food waste can occur anywhere within the food supply chain, from the farm to food manufacturing, retail, distribution and in most instances, by the final customer.

Globally it is estimated that over one-third of all food produced becomes food waste. This not only has a significant impact on a company’s profitability but has far-reaching environmental, social and economic repercussions.

Food production software that includes inventory management functionality reduces spoilage.

Where is food waste occurring?

The place to start when looking to control your inventory waste is to work out where it is coming from. This can be achieved by conducting a food waste audit, to measure and track the amount of food waste that is occurring.

Is it due to improper handling, spillage, cooking mistakes, quality deterioration during transport or inadequate cooling and storage? Measure and record the quantities of waste and where it is happening, what and how much food inventory is being thrown out due to errors, perishability and overstocking.

The audit process is an ongoing task and should be a team effort to continuously check and monitor food waste and to identify areas for improvement.

How accurate is your inventory forecasting?

Most companies recognise the importance of strong and accurate forecasting. The more precise the forecast, the lower the risk of overstocking. Optimal demand forecasts help minimise food inventory waste, maximise production efficiency and streamline purchasing.

A robust and detailed forecast considers both historic data and real-time conditions, like the time of day, the day of the week and what is happening right now. Food inventory forecasts need to integrate all relevant data to make accurate and profitable decisions to reduce inventory waste.

Optimise inventory control

While companies work hard to prevent spoilage, most lack the necessary information needed to analyse the what and why of food waste. Automatic tracking of products by lot and vendor can provide greater insight into where and how food waste specifically occurs.

Leverage the right food manufacturing software to improve your inventory control parameters for each food inventory item, incorporating factors such as handling and temperature control requirements, shelf life and expiry dates.

Optimal inventory control is important to the overall health of your business. Knowing your food inventory types and volumes will assist in managing food inventory to maintain freshness, quality, improve the efficiency of your operations and to reduce food shrinkage and waste.
Inventory control systems can also ensure robust, high quality data capabilities to support advanced supply chain planning and optimisation.

Automated inventory replenishment

Using the results from demand and food inventory planning, replenishment planning provides visibility of future customer demands. Helping to accurately project product and food inventory needs, and determine the actions required by suppliers and manufacturer to efficiently satisfy that demand.

Replenishment planning can help businesses develop cost-effective strategies that ensure rapid replenishment cycles and high customer service levels while reducing costs.

In manufacturing, replenishment planning helps develop capacity plans and detailed schedules. Considering limitations, optimising changeovers and lowering the inventory of raw materials and finished goods.

For sales and operations replenishment planning can transform data from all functional areas such as sales, production, marketing and procurement into a central resource for analysis and decision making.

Food waste reduction

Food waste is no longer an issue of lost revenue and profitability. The ethical, environmental and social impact of food waste is such a global concern that governments are now addressing it as part of their environmental and sustainability policies. Any area, however small that works to reduce or eliminate food waste is a step in the right direction.

Just-in-time supply inventory management reducing waste

Inventory management also benefits customers. By predicting each customer’s demand for products, the business can ensure they have the products available through varying demand periods, leading to better inventory control for the supplier. This, in turn, raises the customer service levels while minimising costs by not overproducing stock.

Stocktaking to manage inventory levels

Food and Beverage manufacturers need to be aware of the stock they hold of both raw ingredients and finished products. If stock is not reviewed regularly and centrally compiled, then over stocking of finished products can occur. An overstock that cannot be moved may need to be sold at a lower price to customers or even dumped leading to food waste and loss of revenue. Food manufacturing software allows stock taking to be regularly undertaken and compared against expected levels. Real time analytics are available through cloud based food manufacturing software showing the amount of stock held immediately.

Data management within inventory management

Within any business, a large amount of data is produced by various departments including manufacturing. Effectively using this data to increase business productivity may seem like a big task however inventory management software makes this complex task easier.

Understanding the data will allow food and beverage manufacturers to adjust their production methods and stock control for greater efficiency. It can also integrate with other software to allow businesses to have greater knowledge of different departments of the business. This may not seem related to waste yet understanding large amounts of data allows for effective production processes, warehousing space and supply chain, therefore leading to less wastage of products and resources.

The right food production software gives you intuitive access to the data that matters.

How to combat food wastage

The key to combatting food waste is ordering what is in demand, in the amount needed and having controlled systems in place for using ingredients appropriately.

Let us consider these in more detail:

Curb on-the-job snacking

Staff are culprits for grabbing food here and there to consume throughout their shift.

By and large, this may be considered acceptable but it can add up and burden the bottom line significantly.

Consider reviewing the company policy around this and introducing boundaries so that any staff takings can accurately be accounted for in inventory.

Refine processes

Food wastage can occur through simple, logistical issues such as spilling food or not having proper composting and donating facilities set up.

To address spillage or cross-contamination it may mean ensuring all staff wear non-slip shoes or reviewing storage and preparation areas that perpetuate cross-contamination.

For wastage after production or consumption, this may mean setting up large-scale composting facilities and identifying a food bank that is happy to take leftover food at the end of the working day.

Always check what is already on hand before ordering

Inventory management software allows businesses to keep track of what is used in production, what has been sold, and what you have remaining in stock so that reordering accurately becomes a breeze.

Don’t go broke saving money

As much as it pains you, do not buy in bulk unless you are certain you will use it. If you do make a bulk purchase with no plan and find yourself unable to utilise it all, you will essentially be wasting money despite the perceived savings.

Store items correctly

Ensure that food items are stored where their shelf lives will be maximised.

Perishables must be stored in the refrigerator (such as dairy, meat and eggs) for example whereas tinned products are quite happy sitting on a shelf in the dark. This may seem logical, however there are some products that can catch you out such as cucumbers which spoil faster in refrigerators due to their relatively high freezing point.

Research the ideal storage conditions for your inventory as spoilage due to inappropriate storage is a needless and costly waste.

Analyse and audit your waste

Less than 28% of businesses have conducted food audits to analyse their waste.

When audits are carried out, you might uncover some interesting statistics about your wastage will make improvement far easier.

For example, 40% of food waste is carbohydrates such as potato, bread, pasta and rice.

Unsurprisingly, these are usually the cheapest components of a meal and therefore may easily be overstocked and discarded without a concern of the effect on the bottom line.

It is as simple as reducing portion sizes of this group of foods and ensuring you only make what is ordered or will likely be consumed.

Doggie bags

If you are allowed by food regulations to offer doggie bags, by all means, do it. This creates a culture of consuming what we order and ensuring every last morsel is valued for what it is.

We have alluded to it, but inventory management software is essential to gaining control of your stores and ensuring waste is kept to a minimum.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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