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Final Report Reducing Food Waste through Retail Supply Chain Collaboration Companies reducing retail supply chain food and packaging waste by working together through an IGD Performance Improvement Programme Project code: RSC010-001 ISBN: Research date: April 2010 –February 2011 Date: March 2011
WRAP helps individuals, businesses and
local authorities to reduce waste and
recycle more, making better use of
resources and helping to tackle climate
change.
Document reference: WRAP, 2010, Cross Sectoral Work Programme to Reduce Food Waste
Arising in the Retail Supply Chain (WRAP Project RSC010-001.
Report prepared by James Tupper, ECR Learning & Change Manager,
and Peter Whitehead, Agribusiness Project Leader, IGD)
Written by: James Tupper, ECR (Efficient Consumer Response) Learning & Change Manager (IGD),
and Peter Whitehead, Agribusiness Programme Leader (IGD)
Legacy research commissioned by the previous government.
Front cover photography: Cross-functional trading partner teams at the On-Boarding Meeting preparing plans of action for the Measure & Understand phase.
WRAP and IGD believe the content of this report to be correct as at the date of writing. However, factors such as prices, levels of recycled content and regulatory
requirements are subject to change and users of the report should check with their suppliers to confirm the current situation. In addition, care should be taken in using
any of the cost information provided as it is based upon numerous project-specific assumptions (such as scale, location, tender context, etc.).
The report does not claim to be exhaustive, nor does it claim to cover all relevant products and specifications available on the market. While steps have been taken to
ensure accuracy, WRAP cannot accept responsibility or be held liable to any person for any loss or damage arising out of or in connection with this information being
inaccurate, incomplete or misleading. It is the responsibility of the potential user of a material or product to consult with the supplier or manufacturer and ascertain
whether a particular product will satisfy their specific requirements. The listing or featuring of a particular product or company does not constitute an endorsement by
WRAP and WRAP cannot guarantee the performance of individual products or materials. This material is copyrighted. It may be reproduced free of charge subject to the
material being accurate and not used in a misleading context. The source of the material must be identified and the copyright status acknowledged. This material must
not be used to endorse or used to suggest WRAP’s endorsement of a commercial product or service. For more detail, please refer to WRAP’s Terms & Conditions on its
web site: www.wrap.org.uk
Executive summary
Aims
In December 2009 WRAP commissioned IGD to conduct a performance improvement programme with leading
grocery retailers and their trading partners aimed at reducing food and drink waste in the supply chain. The
programme was designed to support signatories to the second phase of the Courtauld Commitment and provide a
demonstration to the wider industry, highlighting how collaborative working can prevent waste arising while
providing commercial benefits.
The programme started in December 2009 and ran through 2010, completing in February 2011 following an ex-
post-evaluation meeting.
Specifically, the programme aimed to:
deliver reductions in food and packaging waste previously being disposed of to landfill;
initiate new ways of working and business practices across the supply chain that prevent waste; and
deliver case studies that showcase the benefits of the project and encourage wider and faster uptake of such
collaborative working practices across the grocery industry.
Method
IGD approached a senior Director in several retailer signatories of the Courtauld Commitment at the outset of the
programme with an invitation to participate. Five retailers opted to join the programme nominating a key lead
individual who would be responsible for the work. The retailers then self-selected non-competing product
categories with high levels of waste and invited their respective suppliers to participate. This led to five retailer-
supplier teams each comprising between two and six individuals who carried out the programme with facilitation
from IGD.
Category Companies
Biscuits /
Snacks /
Cakes
Floral
Ready Meals
Citrus
Salads
Sandwiches
Reducing Food Waste through Retail Supply Chain Collaboration 3
The retailer-supplier teams focused on:
delivering commercial benefits for their participating businesses so that behavioural changes could be
embedded and sustained;
reducing food and packaging waste including landfill and non-value adding activities for their chosen product
categories; and
developing case studies to be shared encouraging wider uptake.
The facilitation provided by IGD comprised three phases.
First, teams were requested to ‘measure and understand’ their respective category specific supply chains in
order to identify current processes from end-to-end and quantify the amount of waste arising. All teams used
systematic methods such as value stream mapping in both the retailers and suppliers premises. This phase ended
with teams presenting their findings to each other at a progress meeting designed to cross-fertilise ideas and
develop plans for improvement.
In the second phase, ‘re-design and pilot’ the teams targeted one or more root causes of waste (identified in
phase one) and developed new ways of working that would reduce waste. Typically, these involved activities such
as joint business planning between retailer and supplier and agreeing forecasts where previously these were
separate exercises. Better alignment between order management/timing and production schedules was also
achieved. These changes were piloted by the teams and their impact assessed. A progress meeting marked the
completion of this phase in which teams were able to have their findings assessed and peer reviewed.
The third and final phase, ‘roll-out and sustain’ involved teams applying the improvements to other parts of
their businesses, for example other products within the category or other categories. Solutions were embedded
with work instructions in some cases following Board approval. A final progress meeting captured the benefits
and agreed a framework for developing the case studies. Each team agreed to attend an ex-post evaluation
meeting to finalise benefits and assess the overall cost/benefit of the programme.
Results
Overall the programme has prevented approximately 1,400 tonnes of waste arising as of March 2011, with a
further 1,193 tonnes expected to be prevented in the financial year 2011-12. The waste reductions were achieved
using simple methods throughout the programme, thereby not incurring capital or other costs. New ways of
working were developed that are transferable to other supply chains and the reduction was delivered in a
sustainable and profitable way. As a result, as a percent of sales waste has fallen by up to 1% point allowing for
products whose sales have increased over the life of the programme.
The programme has also given rise to what generically might be termed ‘better supplier relations’. Specifically,
all teams have made changes to their working practices as a result of the programme. These changes include:
instigating regular meetings between the retailer and supplier teams;
increasing/introducing daily communications with suppliers;
more detailed forecasting methods linked to an improved order planning process;
improved tools to assess underperforming lines and for decision making;
improved tools to make order amendment more accurate; and
regular touch-points to review progress on a regular basis.
Teams noted that the methods piloted in the programme can be deployed in other categories and certain teams
have plans in this regard. In a similar way teams noted that methods piloted by other teams may have
applicability to their own trading partners.
Reducing Food Waste through Retail Supply Chain Collaboration 4
The new ways of working, identified by the teams which have wider applicability to food retailers and
manufacturers not involved in the programme are listed below.
improved communications between retailers and suppliers over production planning and order timings;
closer cross-functional team-working within each organisation as well as between them;
joint forecasting, both between and within companies using all the expertise available;
range management including removal of slow moving lines (SKU’s);
fixing order quantities based on a significant proportion of current volumes;
reduced packaging and better designs for shelves; and,
changes to the ‘mark down’ windows for products reduced to clear.
There is a great deal of work being undertaken by WRAP under the second phase of the Courtauld Commitment
and by IGD as part of the ECR (UK) programme to help companies identify and reduce their waste. The following
practices were identified by the participants as being particularly beneficial and they form the recommendations
from this project to the wider industry.
Retailers and suppliers should measure waste using tonnes as the common metric, in preference to value or
the number of cases;
retailers and suppliers should develop ‘joint business plans’ to drive their supply chain operations with open
and honest sharing of information;
retailers and suppliers should develop an ‘end-to-end’ understanding of each other’s business using tried and
tested approaches such as value stream mapping; and
retailers and suppliers should focus on waste prevention with suppliers through the use of in-store availability
measures in preference to service levels.
This report has emphasised the value of collaborative working between trading partners through an externally
facilitated performance improvement programme as an effective vehicle for improving waste prevention. Other
sectors of the grocery industry, for example the independent or convenience sector could benefit from a similar
approach.
Given the benefits that have been identified in this report, WRAP is undertaking similar collaborative programmes
across the home improvement, grocery and food service sectors and encourage industry and business to engage
in the same.
The report includes eight case studies that have been developed from this project.
Reducing Food Waste through Retail Supply Chain Collaboration 5
Contents
1.0 Introduction ................................................................................................................................ 8
1.1 Background ........................................................................................................................8
1.2 Aims and Objectives ............................................................................................................8
2.0 Methods ...................................................................................................................................... 9
2.1 Engagement ..................................................................................................................... 10
2.2 Programme....................................................................................................................... 11
2.3 Facilitation ........................................................................................................................ 13
2.3.1 Paying Attention to Participants’ Commitment Level ................................................. 13
2.3.2 Paying Attention to Partnership Success Factors ...................................................... 14
3.0 RESULTS .................................................................................................................................... 15
3.1 Tonnes Saved ................................................................................................................... 15
3.2 Commercial Impacts .......................................................................................................... 16
3.3 New Business Practices ...................................................................................................... 17
3.4 Cost Benefit ...................................................................................................................... 18
4.0 Conclusions and Recommendations ......................................................................................... 19
4.1 Recommendations ............................................................................................................. 19
Appendix 1: People ............................................................................................................................... 21
Appendix 2: Case Studies ..................................................................................................................... 22
Figures
Figure 1: Hierarchy of objectives for programme developed with participating retailers. ................................... 10
Figure 2: IGD Performance Improvement Programme structure and dates. ..................................................... 12
Figure 3: The purpose and activities of each of the three phases of the programme. ....................................... 12
Figure 4: The key activities of each the four meetings of the programme. ....................................................... 12
Figure 5: Participant commitment levels during the On-Boarding Meeting ....................................................... 13
Tables
Table 1: Product categories and suppliers identified by participating retailers. ................................................. 11
Table 2: Job functions companies were asked to consider engaging in the first phase. ..................................... 11
Table 3: Participants’ scoring at Progress Meetings of their team’s partnership. ............................................... 14
Table 4: Participants’ estimates of their teams’ supply chain waste prevention due to the programme. .............. 15
Table 5: People involved; their roles and their attendance at the four main meetings. ...................................... 21
Reducing Food Waste through Retail Supply Chain Collaboration 6
Abbreviations
Defra Department for Environment, Food and Rural Affairs
FOTM Food on the Move
JS Sainsbury’s
KPI Key Performance Indicators
LEAN A production practice that considers the expenditure of resources for any goal other than
the creation of value for the end customer to be wasteful, and thus a target for elimination
M&S Marks & Spencer
MAPE Mean Absolute Percent Error
MOQ Minimum Order Quantity
NPD New Product Development
RAG or RYG Traffic lights: Red Amber Green or Red Yellow Green
SKU Stock Keeping Unit
SNAF Short Notice Amended Forecast
UB United Biscuits
WRAP Waste & Resources Action Programme
Acknowledgements
IGD and WRAP would also like to thank the companies participating in this programme.
Musgrave Sainsbury's Morrisons Tesco Stores Ltd Marks & Spencer
United Biscuits World Flowers Kerry-Noon MM (UK) Uniq Prepared Foods
Natures Way Foods
G's Marketing
Particular thanks go to their cross-functional trading-partner team members who did the work, identified the
opportunities, designed and tested solutions, embedded new working methods and prevented hundreds of tonnes
of retail supply chain waste in a commercially sustainable way.
Special thanks go to Kerry-Noon, Natures Way Foods, Morrisons, Marks & Spencer and Sainsbury's for hosting
key meetings during the programme.
Reducing Food Waste through Retail Supply Chain Collaboration 7
1.0 Introduction
1.1 Background
Around 6.5 million tonnes of waste arise in the manufacture, distribution and retailing of food and drink (WRAP,
2010)1. The majority (77%) of this waste rests in food manufacturing. The economic cost of this, ‘supply chain’
waste is estimated at around £5 billion. Previous research into the role of supplier – retailer trading relations by
Cranfield University and IGD for Defra identified management factors as a significant root cause of food and drink
waste2. Much has been done to drive down waste by individual manufacturers and retailers but the potential of
collaborative working in a supply chain context as a means of preventing waste is relatively unexplored.
A framework for waste prevention across the supply chain has been introduced under the 2nd phase of the
Courtauld Commitment through which 49 signatories (as of March 2011) are working to improve resource
efficiency and reduce the carbon and wider environmental impact of the grocery industry. Signatories are working
with WRAP to achieve individual and collective ‘sector’ strategy plans to deliver the following three targets:
to reduce the weight, increase recycling rates and increase the recycled content of all grocery packaging, as
appropriate to reduce the carbon impact of this grocery packaging by 10%;
to reduce household food and drink waste by 4%; and
to reduce traditional grocery product and packaging waste (both solid and liquid) in the grocery supply chain
by 5%.
In support of the supply chain reduction target, WRAP is conducting research projects to identify waste hotspots
where supply chain efficiencies can be made, mapping out the reasons for waste and identifying good practice
guidance. These projects include a series of ‘resource maps’ covering the following sectors: fresh fruit and
vegetables, meat, fish, pre-prepared foods and drinks (alcoholic and non-alcoholic). As part of its support to
signatories to meet Courtauld targets WRAP is also carrying out waste prevention reviews and providing bespoke
advice on how to reduce the waste identified.
In recognition that the new supply chain target is challenging and that previously many retailers and
manufacturers have focused on the diversion of waste from landfill (to, for example, energy recovery) and less on
waste prevention, WRAP invited IGD to facilitate a performance improvement programme to demonstrate the
waste reduction benefits of collaborative working. The programme is the first of its kind designed specifically to
involve trading partners working together to identify and prevent waste in their supply chains.
IGD has a long history of encouraging supply chain collaboration through, for example, management of the
Efficient Consumer Response (ECR -UK) programme. This work includes the development and delivery of IGD
performance improvement programmes utilising a bespoke design that has been run 15 times across UK,
elsewhere in Europe and in North America by IGD or under licence to IGD. The programme enables supply chain
partners and different job functions to work together for a common purpose, build their understanding, challenge
the status quo and change their working methods. The programme enables companies to identify, implement and
sustain step-changes in performance levels along the supply chain that would have been difficult or impossible to
undertake in isolation. In doing so, it also encourages companies to embed the process changes within their
businesses and supply chains.
1.2 Aims and Objectives
The aims of this new performance improvement programme set by WRAP and IGD were as follows:
1
Waste arising in the supply of food and drink to households in the UK (WRAP, 2010)
2
Evidence on the role of supplier-retailer trading relationships and practices in waste generation in the food chain
(Defra, 2008)
Reducing Food Waste through Retail Supply Chain Collaboration 8
to deliver reductions in food and packaging waste previously being disposed to landfill;
to initiate new ways of working and business practices across the supply chain that prevent waste; and
to deliver case studies that showcase the benefits of the project and encourage wider and faster uptake more
widely across the grocery industry.
The emphasis in the programme was to find collaborative ways of working that prevent waste arising. The extent
to which waste could be prevented was uncertain at the outset, but WRAP specified that the programme should
deliver significant reductions and set a target over the programme and following embedding within the
businesses of 10,000 tonnes. However, it was recognised that this programme, although based on a tried and
tested approach, was a pilot initiative to explore whether retailer-supplier collaborative working could be an
effective way of helping signatories meet their commitments to Courtauld. Due to the nature of the programme
both WRAP and IGD identified behaviour change that could be sustained to be as important as the waste
reduction target.
Both WRAP and IGD also wished to use the programme to demonstrate to the wider industry (Courtauld
signatories and companies more generally) that collaborative working can prevent waste and reduce costs. A
target of six case studies drawn from the programme was set to showcase the benefits.
It was anticipated that this project would also help improve resource efficiency more generally because other
types of ‘waste’ such as markdowns, inventory and transport would be reduced at the same time. Some of these
impacts are difficult to measure directly but arise through process improvements identified and adopted by
retailer-supplier project teams engaged on the project.
Both WRAP and IGD recognised that if waste prevention was to be sustainable and the new ways of working
embedded across the supply chain, the programme needed to be shown to be of commercial benefit to
participating companies and so this was critical to both the design and execution of projects. Generally
businesses at any one point in time will be running a mix of short term and longer term projects, the latter more
strategic in nature. A short term project of this type would normally be expected to deliver immediate gains while
in effect it is preparing companies for the longer term strategic goal of shifting waste from landfill by preventative
activity.
For many companies waste reduction is ‘business as usual’ and an explicit key performance measure. This
programme was designed to help companies challenge existing approaches while recognising that if companies
are going to take forward change they will only do so if those changes help achieve company wide goals
profitably.
The programme commenced in December 2009 with the recruitment of trading partners and was completed in
February 2011 with an ex-post evaluation meeting.
2.0 Methods
IGD performance improvement programmes engage a mix of businesses and individuals from within the
businesses and facilitate these teams through a programme of phased activities in a simple structure:
companies and their supply chain trading partner(s) are engaged in the programme to tackle real
commercially relevant issues;
cross functional trading partners are recruited to break through the barriers between functions and
businesses;
teams from several supply chains work in parallel to agreed deadlines, competing but also cross fertilising
ideas;
a Measure & Understand phase ensures actions are based on evidence; not myth, legend or gut-feel alone;
Reducing Food Waste through Retail Supply Chain Collaboration 9
a Redesign & Pilot phase wins benefits in the short-term to motivate others from the businesses to join the
change process; and,
a Roll-out & Sustain phase ensures results are delivered and learnings applied; not sidelined by new
initiatives.
The following sections detail the engagement, structure and facilitation of the programme.
2.1 Engagement
IGD approached a senior Director in several retailer signatories of the Courtauld Commitment offering them the
opportunity to participate in the programme and succeeded in attracting five retailers to the programme, as
follows:
Marks & Spencer Tesco Sainsbury’s Morrisons Musgrave
Their participation was secured at a meeting of the retailers at IGD on 5th March 2010 against the following
hierarchy of objectives that stressed the importance of delivering commercial benefit from waste reduction.
Figure 1: Hierarchy of objectives for programme developed with participating retailers.
From the outset and during the Towards the end and immediately
programme, focus on following the programme, focus on
Commercial benefit from waste Commercial benefit from waste
performance improvement for performance improvement for
businesses participating directly in the businesses not participating in the
programme so that behavioural change programme through both:
can be embeded and sustained.
hard hitting case studies of successful
Reduction in food and packaging waste food and packaging waste reduction
arising in the retail supply chain (as (with any commercially sensitive
defined for target 3 of the Courtauld information removed); and
Commitment Phase 2).
clearer customer requirements that are
Reduction in household waste more aligned across supply chains to
(e.g. from pack size reduction). reduce waste / improve resource
efficiency.
Reduction in other types of waste /
non-value-adding activities.
Previous research (for example, Defra, 2008) had identified categories that have both a short shelf life and high
demand volatility as those likely to have the highest percentage levels of waste in relation to sales. While this
information was available to participants, we were not prescriptive about which products were chosen for this
project - each of the retailers were free to identify different product categories. Once these were identified the
process involved the retailers selecting non-competing own label or branded product suppliers. The products
selected ranged from sandwiches and biscuits to flowers and ready meals.
Reducing Food Waste through Retail Supply Chain Collaboration 10Table 1: Product categories and suppliers identified by participating retailers.
Category Companies
Biscuits /
Snacks /
Cakes
Floral
Ready Meals
Citrus
Salads
Sandwiches
The above retailers have national coverage and their participation secured effort across England, Scotland and
Wales. Suppliers based overseas were excluded.
A key feature of the programme is ‘learn by doing’ and IGD worked with retailer and supplier companies to help
them assign the right people to cross-functional trading partner teams who collaborated on the programme.
Companies were asked to consider engaging the following job functions in the first meeting and first phase of the
programme with subsequent engagement dependent on findings.
Table 2: Job functions companies were asked to consider engaging in the first phase.
Retailer Supplier Growers
Store operations Manufacturing Manager / Owner
Depot operations S&O Planning
Ordering Demand Planning
Buyers Account Manager
Technologist Technologist
Procurement
2.2 Programme
The full programme structure is shown in the chart below (with engagement as part of the set-up period). The
meeting dates were chosen to reflect the time required to complete each phase of the programme.
Reducing Food Waste through Retail Supply Chain Collaboration 11Figure 2: IGD Performance Improvement Programme structure and dates.
© IGD 2010
For WRAP reporting and ex-post monitoring purposes an additional meeting was held with company
representatives on 17th February 2011.
IGD performance improvement programmes have a simple structure, which increases the chances that essential
phases of activity are not skipped because of time pressure or forgotten because, for example, they have been
obscured by unnecessary complexity. The name, purpose and team activity of each phase are outlined below.
Figure 3: The purpose and activities of each of the three phases of the programme.
Phase Purpose of Phase Team Activity During Phase
To ensure actions are based Performance is measured, root
1. Measure &
on evidence; not myth and causes of variance analysed and
Understand
legend or gut-feel alone. alternate solutions are identified.
To win short-term gains Chosen solutions are developed
2. Redesign
and to motivate others to and tested locally to contain risk.
& Pilot
join the change process. Peer scrutiny drives valid trials.
To ensure results are delivered Solutions are applied consistently,
3. Roll-out
and learnings applied; rather than improved further, and applied in
& Sustain
sidelined by new initiatives. other areas.
© IGD 2010
Within the above structure teams have considerable freedom to employ methods that may be already available to
them from within one or other of the partner companies or made available to them by IGD at one of the
meetings or via the reference material provided.
The key activities of each the four meetings are outlined below.
Figure 4: The key activities of each the four meetings of the programme.
Meeting Participants
On-Boarding Develop vision, scope and key performance indicators
Get up-skilled in simple mapping and analysis techniques
Plan cross-functional trading partner team actions
1st Progress Present findings, alternate solutions and draft plans
Elicit improvement suggestions from other teams
Improve team action plans to redesign and pilot
2nd Progress Present the pilot results, learnings and draft plans
Elicit improvement suggestions from other teams
Improve team action plans to roll-out and sustain
Evaluation Present roll-out results, investment made and abilities developed
Estimate waste reductions (tonnes) and commercial benefits (£s)
Detail action plans to further spread and embed improvements
© IGD 2010
Reducing Food Waste through Retail Supply Chain Collaboration 122.3 Facilitation
Throughout the programme IGD acted as a facilitator to encourage team working by:
providing retailer and supplier teams with an additional sense of confidence to innovate;
ensuring detailed actions, responsibilities and deadlines were agreed, documented and distributed;
surfacing individuals’ concerns and identifying next steps to overcome them;
utilising individuals’ positive feelings, building high and sustainable energy levels and commitment to the
programme;
committing retailer and supplier teams to work to a series of reporting deadlines that don’t slip;
ensuring coordination and cross fertilisation amongst teams working in parallel;
facilitating scrutiny and constructive criticism of the progress and plans presented by other teams;
ensuring all business results and learning’s are captured; and
identifying success stories/tools that can be shared with other categories to accelerate improvement.
2.3.1 Paying Attention to Participants’ Commitment Level
At the first meeting IGD provided an instrument that was used by participants to record their commitment levels
throughout this On-Boarding meeting. The following diagram shows how commitment levels tracked during the
meeting. Nearly all participants reached the level of “support” or higher.
Figure 5: Participant commitment levels during the On-Boarding Meeting
Participant On-Boarding - Where am I on this scale, right now?
Dedictation
TEAM Key
Cakes
Obligation
Floral
Support
Ready
Engagement Meals
Citrus
Contribution
Salads
Understanding
Sand-
wiches
Awareness
Unawareness
10:00 11:00 12:00 13:00 14:00 15:00 16:00
Time during On-Boarding Meeting, 27th April 2010 © IGD 2010
Participants are listed and meeting attendance shown in Appendix 1.
Reducing Food Waste through Retail Supply Chain Collaboration 132.3.2 Paying Attention to Partnership Success Factors
During the Progress Meetings IGD provided an instrument that was used by participants to score their team’s
partnership against 12 success criteria. Participants rated on a five point scale the extent to which they agreed
with each of the statements listed in the table below. The colours on the right of the table indicate the relative
rating of each team; based on the average of team members’ ratings.
Table 3: Participants’ scoring at Progress Meetings of their team’s partnership.
Key TEAM
G Agree A Not sure R Disagree
wiches
Salads
Ready
Meals
Citrus
Cakes
Sand-
Floral
Partnership Success Criteria
The partnership achieves more
Symbiosis together than working separately
The benefits outweigh
Value the costs for all parties
There is a genuine
Win / Win spirit of co-operation
Commitment All parties have bought-in
Equality All parties have valid input
Participation There is shared effort and action
Everyone is clear about the vision,
Clarity process, outcomes and their roles
There is ongoing support
Sponsorship from key decision makers
There is the appropriate
Empowerment authority to make decisions
All parties are informing and
Communications being kept informed of news
Transparency Information is being shared
Hidden agendas, manipulation,
Bubble power play are not getting in the way
OVERALL
© IGD 2010
Both the Citrus and Salads teams showed higher levels of uncertainty and dis-agreement than did the other
teams. In the Salads team it reflected the lower “support” from the retail commercial function combined with the
departure of a leading player from one of the suppliers. In the Citrus team the scoring reflected the lower
“support” from a supplier person combined with the departure from the retailer of their leading player. These
departures ultimately caused a halt in progress of the Citrus and Salads teams and they took no further part in
the programme despite having done all the ‘measure and understand’ phase, which identified considerable waste
reduction potential.
The above table reflects the aforementioned adverse circumstances affecting the Citrus and Salad teams. All
other teams were able to address, work around or otherwise overcome the partnership issues highlighted.
Reducing Food Waste through Retail Supply Chain Collaboration 143.0 RESULTS
The results of the programme against each of the three objectives identified at the start of the project are set out
below. First, tonnes saved with estimates of the commercial impact this has achieved are presented. Second, we
examine whether the programme led to changes in working practices and third, eight case studies are presented
identifying best practice from the programme (see Annex 2). In a final section the results are brought together
into an overall cost-benefit assessment.
3.1 Tonnes Saved
Estimates by the teams of waste prevented during the programme and what they should achieve during 2011 are
summarised in the table below.
Table 4: Participants’ estimates of their teams’ supply chain waste prevention due to the programme.
Supply Chain Waste Saved TEAM
Ready Sand-
(tonnes / annum) Cakes Floral Total
Meals wiches
Redesign & Pilot, 2010 18 15 33
998 223
Roll-out & Sustain, 2010 36 114 1,371
Further Scale, 2011 102 500 421 170 1,193
The four teams estimated that 33 tonnes per annum of supply chain waste was prevented during the Redesign &
Pilot phase. An example of this type of change includes re-scheduling phone calls to achieve better production
planning. Such changes, often called ‘just-do-its’ can be implemented without cost and result from detailed
investigation of actual work practices for the particular products involved.
An estimated equivalent of 1,371 tonnes per annum of supply chain waste was prevented during the Roll-out &
Sustain phase. In these cases some system changes may be required but without exception none of the teams
incurred capital costs to make these changes. Further insights into the types of working practice that were
changed are given below and in the case studies.
An estimated equivalent of 1,193 tonnes per annum of supply chain waste should be prevented during 2011 from
further scale-up and embedding of the changes made as a result of the programme. Each team worked over
different time periods and the scale up represents both putting data onto an annual basis as well as applying the
new working practices to other products in the same category (and in certain cases to products in different
categories). Although this figure is more speculative it does represent real plans identified by the teams at the
Evaluation meeting.
Overall the programme has prevented approximately 1,400 tonnes of waste arising as of March 2011, with a
further 1,193 tonnes expected to be prevented in financial year 2011-12. Although this is below the target we
had originally set, it represents a considerable success for the programme. All participants who completed the
project have indicated that the new ways of working are being sustained and rolled out in their supply chains. In
addition, the reports and case studies provided through this programme should aid in ensuring that these new
ways of working are adopted more widely across the food industry.
We asked companies to estimate whether waste as a percent of sales had reduced because of the programme.
Three of the four teams reported that sales of the products in question have increased over the period of the
programme; even allowing for these increases waste as a percent of sales had fallen by around a single
percentage point.
The steps taken within the programme to prevent food waste will also address some aspects of preventing
packaging waste. The teams calculated the weight and type of packaging associated with the main products
recognising that primary packaging will vary even between individual products, for example, different types of
biscuit.
Table 5: Participants’ estimates of the packaging weight and type for each product
Reducing Food Waste through Retail Supply Chain Collaboration 15Product/Packaging Cakes Floral Ready Meals Sandwiches % packaging
M&S for example, to the weather and other factors can lead to high levels of waste. Marks &
UNIQ Spencer provides a wide range of sandwiches (including ingredients) for their customers with
different types varying in their popularity. By obtaining a fuller understanding of the
contribution made by all sandwich lines and taking action with Uniq to review the range, both
have seen a substantial reduction in their costs. For Marks & Spencer this has been achieved
through reduced stock and lower right–offs, for Uniq there are fewer change-overs and
improved revenues as they are able to push sales without driving up waste.
All of the retailers who participated have published CSR reports that include waste reduction policies (and other
areas of their respective businesses). All four retailers have policies to eliminate the amount of food waste going
to landfill. M&S, Sainsbury’s and Morrisons have set specific dates (2012 for M&S, 2011 for Sainsbury’s and 2013
for Morrisons) to achieve this target.
3.3 New Business Practices
The second objective of the programme was to initiate new ways of working to prevent waste. This is less easy
to quantify but a critical element of the programme if it is to be sustained. To do this we have tracked behaviours
at different stages of the programme.
We asked participants to identify those working practices that changed as a result of the programme and have
become routine. These include:
regular meetings between the retailer and suppliers teams;
daily communications with suppliers – a genuine collaborative approach;
more detailed forecasting methods linked to an improved order planning process;
improved tools to assess underperforming lines and for decision making;
improved tools to make order amendment more accurate; and
regular touch-points to review progress on a regular basis.
The teams noted that while their initial work to measure waste in their specific categories involved some relatively
sophisticated analysis, for example value stream mapping, the changes in working practices are all simple steps
that can be taken without cost (some, for example, involving simple spreadsheets) and can be summarised as
‘better supplier relations’. In practice this means better alignment of order and production management.
The working practices are capable of being used more widely for example in other categories and there are plans
in place to undertake these trials. At least one team remarked that practices piloted by other teams in the
programme had potential applicability to their own trading partners.
The results for each individual project undertaken across the four teams are provided below in the form of eight
case studies. Each case study highlights in more detail the work undertaken by each team, drawing out the
business and environmental benefits both in terms of business results and job behaviours. The table below shows
the focus of the case study and the team responsible.
Table 6: Eight case studies from the programme.
Case Study Trade Partners
1. Snacks and Cakes Promotions Management
2. Biscuits and Snacks Range Management Musgrave United Biscuits
3. Flowing Cakes Through the Supply Chain – Stockless
4. Floral Supply Chain Waste Prevention Sainsbury’s World Flowers
5. Ready Meal Supply Chain Waste Prevention Morrisons Kerry Noon
6. Collaborative Forecasting of Sandwich Demand
7. Cutting Unprofitable Sandwich Lines to Reduce Waste M&S UNIQ
8. Reducing to Clear and Prevent Sandwich Waste
The case studies appear in Appendix 2.
Reducing Food Waste through Retail Supply Chain Collaboration 173.4 Cost Benefit
In addition to the financial costs incurred by WRAP, the main additional costs on the project were those incurred
by the participating companies through the time of the individuals who worked on the programme. At the
Evaluation Meeting we asked the teams to estimate the time they had invested in the programme. These
estimates from the teams are summarised in the table below.
Table 7: Participants’ estimates of their teams’ time investment in the programme.
TEAM
Time Invested (person days)
wiches
Salads
Ready
Cakes
Citrus
Sand-
Meals
Floral
during phases of programme
Measure & Understand 37 10 18 - - 25
Redesign & Pilot 16 7 12 - - 9
Roll-out & Sustain 19 7 6 - - 9
TOTAL PROGRAMME 72 23 36 - - 43
The table shows that the teams worked some 174 days on the programme representing a considerable
commitment from the retailers and their suppliers over the 10 month period. If the costs of this resource are
calculated using a standard ‘day rate’ then it represents the most significant cost element across the programme.
It can be seen for all teams that the majority of their time was taken at the ‘measure and understand’ phase.
This reflects both the in depth analysis that was undertaken by teams and the need to convert case quantity (and
value) measures of waste to convert a value measure of waste derived from the quantities of products wasted
and their different pack sizes and weights into tonnes, for the programme. The need to establish a common
measure for waste using tonnes as the metric is a wider generic issue that is being addressed by both WRAP and
IGD outside this programme. For example IGD has been running ‘training days’ as part of the ECR (UK) work
programme on food and packaging waste reduction, whilst WRAP, through the second phase of the Courtauld
Commitment, collects supply chain waste data for each year.
In the table below we estimated the costs and benefits of the programme. The costs side is predominantly
comprised of the investment made by WRAP in the programme and the time invested by each of the trading
partners (valued at £500 per day). On the benefits side are costs saved by not having to pay landfill tax (taken
to be £48 per tonne of waste, ignoring collection costs and any regional variations), savings from mark down
policies and reductions in other costs, for example changeovers and efficiencies from collaboration (one example
being less fire fire-fighting on order management and on forecasting).
We have provided two estimates; the first is simply the savings in landfill tax as a result of the waste reduction.
This understates the full extent of savings in 2011 by ignoring collection charges and not including £8 per tonne
increase in landfill charges that will come into effect on 1 April this year (and subsequent years). The second
estimate is based on the figures provided by the companies at the Evaluation meeting.
Table 8: Summary of costs and benefits of the programme.
Costs £ Benefits £
WRAP 54,000 (1) Landfill tax savings 120,000
Trading partner teams 87,000 (2) Company estimates 669,000
For WRAP the return on investment calculated as the costs of the programme set against the savings in landfill
tax is approximately two fold. For the companies the return on investment calculated as the costs of their input
set against their own estimates of the benefits is in excess of seven fold (or 1.4 fold if only the savings in landfill
tax are included).
This analysis demonstrates that both retailers and manufactures can obtain commercial benefits by working
together to reduce waste. These benefits can be significant over time demonstrating a strong business case for
waste prevention.
Reducing Food Waste through Retail Supply Chain Collaboration 184.0 Conclusions and Recommendations
Considerable effort is being made to reduce waste by individual retailers and food manufactures. This project has
demonstrated that trading partners who work together can reduce the waste that arises at the interface of their
trading relations. As such, it is the first project of its kind that has tackled waste reduction through collaborative
action along the supply chain.
This waste focused performance improvement programme represents a milestone in the delivery of targets under
the Courtauld Commitment and more widely because:
it demonstrates that retailers and suppliers can collaborate to identify and reduce supply chain waste and that
this can be initiated and accelerated with third party facilitation;
waste prevention – the pinnacle of the waste hierarchy – can be delivered thus reducing the amount of
material that has to be either redistributed, recovered or disposed of; and,
participants secured a positive rate of return for their investment of time and resources thereby
demonstrating and securing a commercial benefit from preventing waste.
The case studies document the many changes that have been introduced as a result of this project to improve
collaborative working. In this programme joint working has taken several different forms (documented
throughout this report), but the teams wished to highlight the importance of involving the retailers’ technical
teams with the supply base and the beneficial role of staff exchanges (‘implants’) on performance.
Overall the project will have led to a reduction in waste amounting to around 2,500 tonnes. Given the pilot nature
of the project and the small number of products that were involved the results, if they can be scaled, suggest
that Courtauld signatories should be able to achieve their commitment to a 5% reduction in supply chain waste.
All the changes made by the participants were done without incurring capital costs and the new ways of working
have broad applicability. The main new ways of working that could have wider application to food retailers and
suppliers not involved in this programme included:
improved communications between retailers and suppliers over production planning and order timings;
closer cross-functional team-working within each organisation as well as between them;
joint forecasting both between and within companies using all the expertise available;
range management including removal of slow moving lines (SKU’s);
fixing order quantities based on a significant proportion of current volumes;
reduced packaging and better designs for shelves; and,
changes to the ‘mark down’ windows for products reduced to clear.
4.1 Recommendations
There is a great deal of work being undertaken by WRAP under the second phase of the Courtauld Commitment
and by IGD as part of the ECR (UK) programme to help companies identify and reduce their waste. The following
practices were identified by the participants as being particularly beneficial and they form the recommendations
from this project to the wider industry.
retailers and suppliers should measure waste using tonnes as the common metric;
retailers and suppliers should develop ‘joint business plans’ to drive their supply chain operations with open
and honest sharing of information;
retailers and suppliers should develop an ‘end-to-end’ understanding of each others businesses using tried
and tested approaches such as value stream mapping; and
retailers and suppliers should focus on waste prevention with suppliers through the use of in-store availability
measures in preference to service levels, which usually specifies delivery schedules and quantities.
Reducing Food Waste through Retail Supply Chain Collaboration 19This work programme and report has emphasised the value of collaborative working between trading partners
through an externally facilitated performance improvement programme as an effective vehicle for waste
prevention. Other sectors of the grocery industry, for example the independent or convenience sector, could
benefit from a similar approach.
Given the benefits that have been identified in this report, WRAP is undertaking similar collaborative programmes
across the home improvement, grocery and food service sectors and encourage industry and business to engage
in the same.
Reducing Food Waste through Retail Supply Chain Collaboration 20Appendix 1: People
Table 5: People involved; their roles and their attendance at the four main meetings.
23-Nov
14-Sep
24-Jun
27-Apr
Team
Role in
Company Individual Job
Prog
Sponsor Scott Wharton Supply Chain Director
Musgrave Andy Robertson Head Of Network Planning
Cakes
Allaudin Elias Supply Chain Manager
Participant
United Grace McIntyre Supply Chain Development Manager
Biscuits Chris Vevers National Account Manager
Sponsor Warren Davis Senior Supply Chain Manager - Fresh Food
Andy Atherton Senior Supply Chain Manager - Grocery
Sainsbury's
Donald Matheson Category Supply Manager
Floral
Participant Robert Honeysett Technical Manager
World Dawn Hampton Sales Support Manager
Flowers Bill Brinson Business Unit Manager
Sponsor Malcolm Basey Supply Chain Director
Ready Meals
Morrisons Stuart McCarthy Fresh Supply Chain Controller
Darren King Senior Sales Team Leader
Participant
Kerry- Colin Dubber Head of Operations
Noon Charlie Heather Account Manager
Matt Walsh Fresh Commercial Operations Manager
Tesco Adam Morris
Stores Ltd Dan Britten Technical Manager - Citrus
Citrus
Participant
Andrew Lewis Buyer - Citrus
Matthew Warren
MM (UK)
Naomi Pendleton Head of Technical
Sponsor Nick Tatum Produce Operations Director
Tesco Jenny Lee-Barber Buying Manager - Salad
Stores Ltd Rosie Willis Technical Manager - Salad
Salads
Orrett Kennedy Distribution
Participant Matthew Rowbury Supply Chain Director
Natures
Ian Summerfield Chief Commercial Officer
Way Foods
Ben Horlock National Account Manager - Tesco
G's Daniel Cross Account Manager
Sponsor Syd Reid Merchandising Executive
Andrew Knott Business Architect
Sean Parslow Category Supply Chain Manager
Sandwiches
Marks &
Gerri Scott Foods Buyer
Spencer
Steve Simpson Business Analyst
Participant
Deena Barritt Project Manager Retail Food 2020
Mitul Lakhani Business Analyst - Strategy & Architecture
Uniq Prep- Richard Moorby Account Manager
ared Foods Darren Atkinson Supply Chain Manager
Facilitator James Tupper ECR Learning & Change Manager
IGD
Others
Expert Peter Whitehead Agri-business Programme Leader
Sponsor Mark Barthel Special Advisor
WRAP
Sponsor Sarah Macnaughton Retail Supply Chain Programme Manager
Reducing Food Waste through Retail Supply Chain Collaboration 21Appendix 2: Case Studies
SNACKS AND CAKES
PROMOTIONS
MANAGEMENT
United Biscuits (UB) and Musgrave worked on this project to align their forecasts and production
planning more closely to tackle the high levels of waste (56% of all waste), which was arising from
promotional lines. Forecast accuracy improved and promotional waste as a % of sales fell by over
13% points.
Measure and Understand
The Musgrave and United Biscuits team identified significant opportunities through: mind-mapping, scoping and
prioritisation; end-to-end supply chain ‘walk-through’; KPI information gathering; and ‘Lean’ methodology and
process mapping. This process is summarised in Figure 1.
Figure 1: Musgrave – United Biscuits use of LEAN methodology and process mapping.
Improving promotions management was one of three key opportunities identified. Promotional lines represented
over half (56%) of wastage (£). Cakes and Crisps/Snacks/Nuts were the key priority areas.
Redesign & Pilot
The following new ways of working were developed collaboratively:
Strategy Improved joint business planning.
Budget forecasting and assumptions more visible.
Better alignment of timelines.
Planning Working to one aligned process and timeline.
Better understanding of accountabilities and dependencies along the supply chain.
More collaborative forecasting within/between companies.
Earlier forecasting in line with production planning.
Improved planning and communication (e.g. a weekly meeting).
Execution More focus on initial stock phasing into depot.
Improved communication of ‘actual’ versus ‘planned’ performance.
Collaborative monitoring and adjustment of orders.
Focus on end of promotion execution and exit strategy.
Review Category team post promotion review (process and KPIs).
Learnings built into next promotional cycle.
Reducing Food Waste through Retail Supply Chain Collaboration 22Key Findings and Benefits
Store forecasts shared earlier to ensure they are built into production planning.
Time used for planning rather than wasted on ‘fire-fighting’.
Fewer last minute UB volume amendments.
Short Notice Amended Forecast (SNAF) reduction from average of approximately 10 lines pre-pilot to one line
in current promotional cycle.
Musgrave forecast accuracy has been sustained (76% actual versus forecast).
Promotional wastage as a % of sales is down from 19.5% to 6.3%.
Roll-out & Sustain
Since the 13th September consumer start date, the new integrated UB/Musgrave promotional process and ways of
working have been ‘business as usual’ with post promotional reviews in place.
Figure 2: Feedback on UB/Musgrave ‘business as usual’ promotional process and ways of working
Changes
As a result of the WRAP funded IGD programme Musgrave and United Biscuits have seen significant benefit.
Table 1: Musgrave and United Biscuits Promotions Management – what’s changed?
Before Programme As a Result of Programme
2.93% Product Wastage (% of sales) 1.16% Product Wastage (% of sales)
Business
Results
19.50% Promotional Line Wastage 6.30% Promotional Line Wastage
75% Promotional Forecast Accuracy 76% Promotional Forecast Accuracy
Insufficient collaborative planning leading to Promotions process aligned between
reactive fire-fighting and non-value added Musgrave / UB and within companies across
activities. functions:
Lack of two-way communications and insufficient / o Musgrave / UB integrated process and
inaccurate information lows (e.g. forecasting) both timeline;
o across functions within Musgrave and UB; and o roles and responsibilities understood
Job Behaviour
o between companies inc. function to function. o communications line clear;
Lack of understanding and alignment of key o collaborative planning and review to
business processes (e.g. promotions, seasonal build continuous improvement and
management). reduce non-value adding activities;
Unclear people structures and roles / o improved alignment of strategic and
responsibilities, with ‘silo’ mentality between commercial planning; and
businesses and across functions. o end-to-end approach and measurement
Lack of visibility and alignment of Commercial and Built learnings of collaborative promotions to
Supply Chain strategies and some conflicting other key business process (e.g. seasonal
KPI’s. management).
Musgrave and United Biscuits believe these principles and a streamlined approach could be applied to other
trading partners for mutual benefit.
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