SUPPLY CHAIN OPERATIONS
A significant amount of waste is recycled
(down from45 per cent in 2005). However, the supply chain as a
whole – fromfarmgate to till – is not seeing asmuch success. The latest update fromCourtauld showed thatwhile other areas such as packaging and household food and drinkwaste arewell on theway tomeeting their three year targets, the supply chain has a steepermountain to climb. Although, the supply chain is a newer focus for those signed up to Courtauld, in the first year it only achieved 0.4 per cent against its 5 per cent three year reduction target. This is compared to packaging achieving 50 per cent of its 10 per cent target and householdwaste delivering 75 per cent of its 4 per cent objective. The difficulty in achieving
reduction across the supply chain is down to its sheer size. The Institute of Grocery Distribution (IGD) estimates that the UK’s grocery sector is worth around £156bn, withmore than 88,000 grocery stores throughout the country. There is also amultitude of
opportunities forwaste to arise – be it rawmaterial during manufacturing, damaged goods and packaging during transit or obsolete/out of date product loss at stores.Waste has to be combated at every stage in the process, and then each company has to look at its own supply chain and ensure that its suppliers are also tacklingwaste. For retailers, although they find
“Key to achieving the supply chain goal is forwaste to be a central element in all decision making.”
themselves highlighted as the culpritswhen it comes to retail waste, they aren’t actually fully in control of thewaste they end up with. It depends on howthe brands they stock deliver goods to store. The growth of retail- ready packaging has helped to deliver a significant reduction in the amount of packagingwaste being generated by the supply chain. This change in packaging practice is a perfect illustration of howthinking aboutwaste at the stage of designing a product has amassive and long-termimpact. Key to achieving the supply
chain goal is forwaste to be a central element in all decision making. It’s not only about the packaging that the consumer takes home, it’s also about how products are protected to ensure they get to storewithout being damaged;making efficient use of rawmaterials in the manufacturing process; and,when it comes tomaterial usage,
FMCGNews.co.uk | FMCG News | 37
ensuring that it’s amaterial that is easy to recycle. It’s not only the FMCGbrands directly selling to the supermarkets that have to consider these elements, their own supply chainsmust do the same. Essentially, waste
management needs to be embraced by every department within a FMCG business and sit alongside finance, operational efficiency and R&D on the boardroom agenda. But what’s critical is that it’s not just dealing with the waste that arises, but identifying ways to reduce it in the first place will deliver the best results. For instance, manufacturers can look at their existing systems and as they invest in leaner manufacturing processes, benefit will also be achieved in terms of waste. Achieving zero waste to
landfill has to be the prime ambition for the grocery supply chain. It’s challenging, but the recycling sector has matured significantly over the last few years and as a result technologies exist to handle almost all wastes. Indeed, waste is not really waste, it’s a resource and therefore, to really achieve the goals of Courtauld, businesses need to apply the waste hierarchy when it comes to disposal options. This will ensure that the best value out of
The industry ismaking headway towards achieving its green goals
recyclate is achieved and by this we mean turning fibre packaging back into fibre packaging. In this way we can prolong natural resources by reducing demand for virgin paper. What’s often overlooked is
the fact that poor waste management is in fact a double hit to the bottom line. The business has purchased the product initially and subsequently has to pay for what’s wasted to be disposed of, whether to landfill or a recycler. Landfill costs are escalating year on year - in April 2012 the cost per tonne reached £64 a tonne, and it will reach £80 in April 2014. Add on transport costs and gate fees and waste is a growing financial burden that can be minimised. It’s not just about getting the lowest unit rate for a bin collection from a recycling/waste management company – this model is unsustainable, realising the value in the materials and ensuring the best processes are adopted for each stream will deliver the best results. To reach the Courtauld
targets, everyone in the supply chain needs to work together and take responsibility for minimising the waste and environmental impact at every stage in its own process.
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