The complexity of supply chains often leads to hidden expenses, wasted resources, and a substantial environmental footprint. While this is a common reality, it is also a significant opportunity.
The global business landscape is being hindered by supply chains that desperately need to evolve. Nearly two-thirds (63%) of CEOs worldwide1 view supply chain issues as the primary barrier to growth.
Food retailers are especially vulnerable, facing annual losses exceeding $1.2 trillion due to supply chain disruptions, writes Julie Vargas, Vice President and General Manager of Identification Solutions at Avery Dennison.
So the question becomes: How can businesses create a supply chain that meets the greater demands of society, customers, and their own industry?
Technology alone isn’t the solution
Outdated and inefficient technology may be partly to blame for supply chain woes. But the effectiveness of any technology is dependent on the data that feeds it. There really are no exceptions.
A lack of accurate data associated with physical products at an item level, combined with difficulty in tracking to enable real-time visibility, can severely limit effectiveness and impact.
Without the right data and technology, tackling challenges such as inaccuracies, sustainability, waste and a lack of transparency become almost impossible. The answer lies in having an approach that bridges the physical and digital. As we move toward an increasingly digital future, we can empower physical products with their own unique digital identities – pairing trusted data with leading technology.
More accurate supply chains
Food retailers rely heavily on manual inventory tracking of perishable goods throughout the supply chain. Yet human error can lead to inaccurate data collection, which in turn, drive poor business decisions that can significantly impact their bottom line.
Intelligent RFID-enabled labels connect physical items to digital networks so they can be accurately tracked and accounted for in real-time – reducing sorting and delivery mistakes, not to mention, significant labour. Using RFID solutions, employees across the supply chain can automatically receive notifications if a package is loaded onto the incorrect vehicle, meaning mistakes can be almost immediately rectified, greatly reducing the number of late or missing deliveries.
Adding a layer of sophistication, RFID labels streamline the supply chain, boosting driver efficiency and delivery accuracy by automating time-consuming tasks such as manual scanning and delivery updates.
Less food waste
Globally, it’s estimated that 1.05 billion tons2 of food is wasted every year – or a fifth of the estimated global food supply. This isn’t just costly, it’s also damaging to the environment. After all, that waste generates between 8-10% of global greenhouse gas emissions.
Reducing food waste is far from easy. The problem with perishables is… they perish. To eliminate waste, issues throughout the entirety of the food chain need to be addressed – all the way from farm to fork, and everything in between. The largest opportunity in fresh grocery is the ability to better manage freshness and inventory. This is achieved through automated and accurate inventory better connecting consumption to production.
By using RFID, food suppliers and grocers can more precisely serve customers by having the right items with the right freshness at the right place and the right time, reducing up to 40% of waste.
Another way to preserve freshness is to create better resealable packages. For retailers who buy in bulk and resell products individually, the countdown to spoilage begins the moment a container is unsealed. But changes can be made. Our work with Nestlé is a great example of this in action.
When Nestlé sought to reduce waste within its Cocosette, Morenitas and Deditos brands, it partnered with Avery Dennison to create new resealable adhesive labels that can be reused and peeled back, then resealed multiple times over and over to reduce spoilage while also reducing packaging. Product flavours stay fresh, and the consumer gets an overall better experience. The solution has already been a success in Colombia, and there are now plans to replicate it with Nestlé’s packaging elsewhere.
Enabling sustainability and circularity
Reducing food waste is just one side of the sustainability coin. Retailers need to find more sustainable solutions for all physical goods – including packaging.
UK-based food service distributor Reynolds was under pressure to find a more sustainable solution to the way it delivers produce to its restaurant clients. On average, Reynolds delivers 60,000 corrugated packages to restaurants every week. These boxes are designed to be recycled, but many ended up in landfills, nonetheless.
Reusable containers were clearly the solution. But they’re often lost by the restaurant, or they’re inadvertently tossed in the trash.
To improve visibility and motivate reuse, Reynolds worked with Avery Dennison to create a solution which gives unique, scannable identities to each container. The lifespan of each container has now been elongated considerably and, as an added benefit, food spoilage has decreased. Plus, workers spend less time breaking down cardboard boxes!
A new level of transparency
When it comes to transparency, intelligent labels can assure customers of the origin of each of the ingredients in a product.
Combining the unique digital identity from an RFID tag with a QR code allows brands to provide visibility into the source of the exact product a consumer is holding. This level of traceability empowers consumers to understand the full story of the products they’re buying, helping brands better engage and build trust with their customers.
Unlocking a world of possibility by connecting the physical and digital
Ultimately, in an industry that will always rely heavily on the movement of physical goods, the ability to connect digital identities to physical products will be essential in effectively leveraging technology to mitigate future supply chain challenges. As you can see from the above, many of the core issues facing food retailers in the coming years can be overcome if we bridge physical and digital solutions, to not only reduce waste and help drive efficiencies, but support companies to become more sustainable, transparent and cyclical in their approach. If retailers start working with experts to implement these solutions now, then they will be positioned well to create supply chains ready for the future.
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