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Food Industry Is Losing $15 Billion Annually on Unsaleable Products

May 2, 2017
Supply chain best practices could save food producers and retailers $150 million annually.

Unsaleable goods is a $15 billion issue for the food industry, and a reduction of just 1% would save food companies and retailers $150 million annually, says Daniel Triot, senior director of the Trading Partner Alliance (TPA). It’s time, he says, that the industry adopt best practices to meet and exceed that 1% goal.

Triot’s comments came in conjunction with the publication of research conducted by CHEP, a producer of pallets and containers widely used by food manufacturers and retailers. The study examined 48 different strategies companies used to reduce unsaleable goods and generate cost savings. Supply chain functions studied included warehousing, shipping and receiving, sales, merchandising and reverse logistics. Each strategy was then ranked in order of effectiveness

The top three most effective best practices, according to survey respondents, are:

• Enhanced shelf life management

• Effective management of discontinued items

• Sharing of UPC-level data.

CHEP was selected by the TPA’s Joint Industry Unsaleables Leadership Team as a partner for its unsaleables reduction initiative. The project will culminate in the development and launch of a TPA online unsaleables reduction educational platform, expected later this fall. The educational platform will contain detailed information and tools to help trading partners review their supply chains and identify and implement effective unsaleables reduction strategies.

“The unsaleables educational platform is being designed as a living tool that will constantly evolve to include new best practices so that it can help industry maintain vigilance and focus on unsaleables reduction in the future,” explains Ben Eugrin, CHEP’s director of supply chain solutions.

The Trading Partner Alliance (TPA) is a joint industry affairs-industry relations leadership group formed by the Grocery Manufacturers Association (GMA) and the Food Marketing Institute (FMI) to develop and address a shared retailer-manufacturer agenda on supply chain efficiency issues and the application of information technology.

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