Making Zero Waste Supply Chain A Possibility in the Food Industry with AI

March 30, 2021 · 5 minutes
By Tina
Share this article

Let us begin with a hard look at some numbers related to food wastage.   

  • Between 33-50% of food produced globally is never eaten, and this wasted food is worth over $1 trillion.
  • According to BCG, by 2030 annual food loss and waste will hit 2.1 billion tons worth $1.5 trillion.
  • According to the World Food Program, 135 million people suffer from acute hunger and the COVID-19 pandemic is set to double that number, putting an additional 130 million people at risk of suffering acute hunger.

These statistics are astounding and one of the many reasons why we stand here today is the massive market inefficiencies and supply chain issues in the food industry, which do not exist as significantly in other industries.

With food wastage numbers running in trillions and increasing every day, the food industry needs to look towards innovation and digitization to combat this disastrous trend.

As the world population increases, the demand for food will likely outgrow the supply.

In such a scenario, digitization, using emerging technologies like Artificial Intelligence (AI), Internet of Things (IoT), Machine Learning (ML), and others, seems to be the only viable way out of the vicious circle of production and wastage.

From production and processing to retail, systematic changes must be put in place in food supply chain management to help utilize resources more efficiently.

How to Create a Zero-Waste Supply Chain Model?

As the name suggests, a zero-waste supply chain doesn’t produce waste. The aim is to ensure sustainability in every step of the chain and to achieve that, it is important to have a 360-degree view of your chain and integrate disparate processes.

This process involves not just rethinking packaging and shifting sourcing strategy but also restructuring production processes, rearranging distribution systems, and developing closed-loop supply chain methods that help keep wastage to the minimum.

Advanced AI algorithms are helping businesses all over the world in optimizing deliveries and reducing their carbon footprint. Key data on risks and performance, which is updated on real-time is necessary for businesses to continuously adapt their strategies to build more robust and sustainable supply chains.

It’s Time to Rethink the Waste with Smart Technology

With the misuse of resources becoming a global issue, the UN’s Sustainable Development Goals listed a target of reducing food loss and waste by half by 2030. The urgency of this step makes the food waste disaster more evident. 

Wastage of food occurs at all steps in the value chain but it is most distinct at the production and the consumption levels. The problem is more pronounced at the production level in developing countries, while it’s more prevalent at the consumption level in developed countries.

One of the main reasons for this wastage is the lack of visibility into the extent of food loss and waste at all stages in the value chain. This lack of awareness is prevalent among consumers, but is also an issue among food service providers, restaurants, and hotels. 

Proper visibility along with the right infrastructure can go a long way in addressing the food waste issue.

Digital supply chain tools can provide a better dynamic between supply and demand, make transactions in the supply chain more resourceful and seamless, track loss and waste, and create dynamic pricing, which can provide passage to products through the system before they expire.

AI is Taking the Food Industry by a Storm – Here’s All You Need to Know

The impact of Artificial Intelligence (AI) in almost all industries is undeniable and the future economy depends heavily on AI and other emerging technologies. 

The food processing industry has started leveraging AI to optimize its operations and deliver better customer experiences. 

With the impact of AI in the food industry, the main challenge of food processing and storage has been addressed to a great extent. From automating the process of sorting to detecting anomalies in food and adhering to various food compliances, AI has had a substantial impact in the food industry. 

Many companies, in the past, have tried to leverage Big Data solutions to tackle their supply chain issues in the food industry. But these solutions aren’t intelligent enough and that’s why it is important to use AI and machine learning to find trends and important correlations across a huge number of variables.

By incorporating data from various internal and external sources, AI can give you a holistic view that will help to fix your supply chain issue in food industry. 

An integrated business planning solution can help manufacturers reduce or even eliminate overproduction and standing inventory. It can accurately forecast customer demand with the help of advanced algorithms to stop overproducing goods.

For example, if your business manufactures perishable products like dairy, you can analyze historical data, point-of-sale information, buying patterns, and other data points to determine how many packs of milk or packages of yogurt you need to produce.

You don’t have to let your items expire in a warehouse or a grocery store shelf. With demand sensing capabilities, AI can help you better understand how many products, how quickly, and where you can actually sell.

With all stakeholders within the supply chain having access to key data shared across integrated systems, processes can be further optimized in the chain to maximize how food is handled. For example, a bad batch of vegetables would need special cold storage options to get the maximum value.

This pre-warning system and sharing of information can reduce the risk of waste and help stakeholders plan accordingly. Efficient sorting and grading systems using AI are key approaches in reducing food wastage across the supply chain.

Become a Smart and Responsible Business with ThroughPut’s ELI

The AI-powered ELI is a food supply chain management software that helps eliminate bottlenecks, reduce wastage, and increase efficiencies in your supply chain.

It helps you accurately predict demand with its demand sensing function and helps you create an effective demand response plan to balance your inventory requirements, reduce wastage, and cut down logistics and transportation costs.

ELI being a food supply chain management software further boosts production-planning efficiency by providing accurate real-time data so production plans can be modified depending on the change in demand.

You get better visibility into your processes with AI-powered insights and prepares you for future demand fluctuations. 

It connects upstream and downstream operations of the supply chain, reducing the time taken to get products to customers and helps in building a data-driven supply chain that’s ready for any surprises down the road!

Take your first step towards a zero-waste food supply chain with ThroughPut. If you’re ready to embrace AI, schedule a demo right away!

Share this article
PictureRenderError: Empty image array