Supermarkets, Don’t Lose Millions in Food Waste, Use Analytics to Help
(PRWEB UK) 24 April 2014 -- The Operational Research Society recently published a new article showing how 15 million tonnes of food is wasted every year in the UK and how supermarkets are coming under increasing pressure to reduce food waste. To stop this happening, major supermarkets Asda and Waitrose have turned to Operational Research (O.R.) to address the supply chain and demand issues that are leading to stock wastage. O.R. is being used to identify supply solutions that help keep the balance of stock as near as possible to the level of demand.
Asda uses O.R. techniques to improve its supply chain by creating better vehicle routing models. These have helped to shorten the time it takes to get goods from suppliers to stores and reduced the number of miles vehicles travel. More efficient supply chains mean fresher stock so less is wasted.
What is O.R? O.R. is the discipline of applying appropriate analytical methods to help those who run organisations make better decisions. It's a 'real world' discipline with a focus on improving the complex systems and processes that underpin everybody’s daily lives. O.R. techniques are the key to forecasting customer demand accurately and help make the supply chain management solution – ensuring stores are fully stocked with fresh produce – as efficient as possible.
How else is O.R. helping supermarkets? Improving the supply chain is only one half of the challenge, accurately predicting demand is the other half. In an effort to address this, Waitrose is incorporating weather forecasts into its demand forecasting process.
O.R. practitioners use historical demand data and weather patterns obtained from the nearest weather station to each branch to uncover significant relationships between demand and specific weather patterns. The impact of the new forecasts on ordering dates and quantities means that lost sales reduced by 6% and wastage by 1%. Although 1% doesn’t sound much, if all of the supermarkets improved their demand forecasting and improved wastage by 1% they’d save 150000 tonnes of food from being wasted in the UK each year.
Organisations using O.R. in their decision making processes see significantly improved results. Take a look at more solutions by visiting http://www.scienceofbetter.co.uk
Graham Sharp, The OR Society, +44 121 233 9300, [email protected]
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