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Food waste is a real challenge, and we all have a co-responsibility: The individual consumer, the retailer, as well as the distributor and the manufacturer. By increasing the transparency of data between all parties, we can optimize the supply chain and deliver the right products to the right consumers at the right time and the right place.
UN's Sustainable Development Goal 12.3
By 2030, halve per capita global food waste at retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses.
In the fast-moving-consumer-goods industry (FMCG), supply and demand must balance better to reduce food waste. All parts of the integrated value chain focus on producing, distributing, and delivering the right products to consumers in the right amount, at the right time and at the right place. However, the major challenge is the insufficient sharing of data between the parties in the value chain. This gives poor conditions for predicting and making the right decisions. A better data foundation and increased transparency between all parties can reduce food waste.
From a traditional point of view, the parties in the value chain have no interest in sharing knowledge with others. However, knowledge obliges. To meet the UN’s Sustainable Development Goal 12.3 of halving food waste and food losses in production and supply chains, we have to find alternative ways to share data and forecast consumer demand.
Retailers have detailed information on their consumers' purchasing behavior through cash vouchers and customers' socioeconomic characteristics through loyalty cards. Price elasticity has a significant impact on customers' buying behavior but also the shop's floor plan and other marketing initiatives influence the buying behavior.
The manufacturer, on the other hand, prepares demand forecasts on the basis of its customers' (i.e. retailers) sales history, sales orders, and marketing initiatives, potentially in collaboration with the retailer. Calendar activities, such as holidays, vacation time, events, etc., are also applied information.
From a predictive analytics perspective, massive amounts of data exist. It's collected but not fully used by relevant parties in the value chain, and for this reason the entire ecosystem doesn't benefit. In order to significantly reduce food waste, existing data must be available to a greater extent and benefit from larger parts of the integrated value chain.
There are many variables that need to be incorporated into the analysis. It's necessary to utilize deep statistical and financial knowledge as well as the latest techniques to deal with these data sets and data relationships - not least to find causal relationships.
Predictive analytics combined with economic theoretical knowledge in the field is undeniably the right tool to solve the problem. The challenge is how to provide and display the information to the parties in the value chain without distorting the market mechanisms or violating the GDPR.
The challenge is to establish a constellation between the parties in the value chain, each contributing with data. By orchestrating a data foundation which can be shared between the parties in the value chain, they can optimize their own activities more accurately.
Consumer to manufacturer consent must be given for certain data while the data for predictive analytics must be compiled in such a way that the necessary degree of data privacy exists. This applies, for example, to data relating to consumers and brands.
Technically, a data foundation must be prepared by associating various variables, and then applied in predictive analytics. This applies to the variables creating the extra information, which makes it possible to perform better forecasts - throughout the value chain.
THE STRENGTH LIES IN THE PERSONAL MEETING
Are you curious about how we find data correlations and causality in data when working with Predictive Analytics, contact Giovanni Mellace.
ABOUT ROOFTOP ANALYTICS
Rooftop Analytics has the competence to analyze and identify which data makes the difference when forecasting. We utilize statistical analysis rooted in knowledge of economic theory. We handle big data and apply machine learning - all necessary elements for predictive analytics, required for companies to enable the fight against food waste.
When multiple technologies come into play the synergies arise.
Rooftop Analytics stands out on the market and creates value for companies.