James Tupper, ECR Learning & Change Manager, IGD :50 Main Hall, ECR Baltic Forum (Vilnius), 8 th November 2012

Transcription

1 James Tupper, ECR Learning & Change Manager, IGD :50 Main Hall, ECR Baltic Forum (Vilnius), 8 th November 2012

2 Who we are Over 750 members from across the supply chain At the heart of the industry for 100 years Total supply chain perspective In-house team of 100 Over 30 analysts with relevant industry experience Funding: 20% Subscriptions, 80% Trading

3 Our Purpose Making a Difference Training and development Helping people flourish at all stages of their careers Skills and employment Providing skills and career opportunities Nutrition and technical Helping consumers make more informed choices Sustainable supply chains Delivering environmental benefits through guidance and best practice Download our latest impact report for more information on how we deliver public benefit:

4 Agenda Food and packaging waste in the supply chain: preventing it from occurring in the first place Performance gaps and their scale. Why the gaps have grown and why opportunities to improve have not been exploited How some in the industry are challenging assumptions, driving change, demonstrating achievements and influencing the framework within which it operates Hard hitting case studies hot off the press from some of the most proactive FMCG - retail businesses in UK How to Improve Performance Together will be fully addressed in the special workshop from to 14:55 in the Secondary Hall :50 Main Hall, ECR Baltic Forum (Vilnius), 8 th November 2012

5 Sustainability: the three pillars or the triple bottom line Labor Practices and Decent Work Human Rights Society Product Responsibility Materials Energy Water Biodiversity Emissions, effluents and waste Products and services Bearable Environmental Compliance Transport Overall Global Reporting Initiative Sustainability Performance Indicators Social Sustainable Viable Equitable Economic Economic performance Market presence Indirect economic impacts Living within our means so future generations can meet their needs

6 Waste in the supply chain

7 Prevention vs. Recovery Multipliers (CO 2 e) How may tonnes of Food and Drink waste do you need to Recover to be equivalent in Greenhouse Gas terms to Preventing one tonne of Food and Drink waste? Prevent / Redistribute Compost Prevent / Redistribute Anaerobic Digestion > 8.3 > 6.6 Adapted from Defra/DECC s Greenhouse Gas Conversion Factors for Company Reporting

8 Prevention vs. Recycling Multiplier (CO 2 e)* Food and Drink Waste (Compost) 8.3 Food and Drink Waste (AD) 6.6 Glass (mixed colours) Plastic rigid (incl bottles) Plastic film (incl bags) Glass (colours seperated) Board (78% crgt, 22% crtnbrd) Textiles Steel Cans Wood Aluminium cans and foil Government s new tougher UK packaging recovery rate targets Overall 74% 79% Glass 81% 64% re-melt Plastic 32% 57% Paper 69.5% Steel 71% 76% Wood 22% Aluminium 40% 55% * Net Benefit of Saved Production Emissions Versus Landfill vs. Net Benefit of Recycling Versus Landfill data from July 2011 Guidelines to Defra/DECC s Greenhouse Gas Conversion Factors for Company Reporting

9 Agenda Food and packaging waste in the supply chain: preventing it from occurring in the first place Performance gaps and their scale. Why the gaps have grown and why opportunities to improve have not been exploited How some in the industry are challenging assumptions, driving change, demonstrating achievements and influencing the framework within which it operates Hard hitting case studies hot off the press from some of the most proactive FMCG - retail businesses in UK How to Improve Performance Together will be fully addressed in the special workshop from to 14:55 in the Secondary Hall :50 Main Hall, ECR Baltic Forum (Vilnius), 8 th November 2012

10 Wasting Profit Rates as a % of Sales Waste Margin

11 Barriers to performance improvement The potential of many underexploited opportunities for savings go straight to the bottom line are obscured because we are: Immune to the effects on waste of our decisions elsewhere in the business or in other companies Dazzled by spotlights on the great work to light-weight or plant-base packaging and to reduce household waste Busy, and we have better qualified and responsible colleagues in waste and sustainability departments Cautious to open a whole can of worms with colleagues, let alone trade partners Busy diverting waste to avoid landfill tax and salvage some value as feedstock to recovery industries Cautious about talking of issues that can too easily be misunderstood and damage reputations

12 Agenda Food and packaging waste in the supply chain: preventing it from occurring in the first place Performance gaps and their scale. Why the gaps have grown and why opportunities to improve have not been exploited How some in the industry are challenging assumptions, driving change, demonstrating achievements and influencing the framework within which it operates Hard hitting case studies hot off the press from some of the most proactive FMCG - retail businesses in UK How to Improve Performance Together will be fully addressed in the special workshop from to 14:55 in the Secondary Hall :50 Main Hall, ECR Baltic Forum (Vilnius), 8 th November 2012

13 Retail Packaging Corrugated Plastics Single Trip Plastics Multi Trip

14 Incineration or Landfill Packaging Material Cycles Primary Secondary Tertiary Extraction Manufacture Filling Recovery Recycle Return / Reuse Distribution Retail Home Source: IGD Research

15 Product and Packaging Waste Customer Service Director Supply Chain Director Customer Supply Chain Manager Store Ordering Programme Manager Sustainability Manager Supply Chain Controller Customer Services Executive Multiple Supply Chain Environment Manager Head of CSR & Corporate Affairs Fresh Supply Chain Controller Supply Chain Project Manager European Sustainability Director European Activity Management Operational Risk Manager UK & Ireland

16 Factory In-Gate / UK Port Supply Chain Prod & Pack Waste (tonnes, 2009) Manufacturers Supply Chain Retailers Supply Chain Returns Returns 5, Till Till Reduce to Clear Mark Downs managed for suppliers Dispose Redistribution / alternative markets Recovery (including recycling and composting) Dispose Redistribution / alternative markets Recovery (including recycling and composting) Sewer / controlled water course Arrows not to scale!

17 Struggling to see the Lines

18 IGD Waste Targets 75,000 tonnes Prevented or Redistributed by end ,000,000 wheelie bins 150,000 tonnes Diverted from Landfill and Sewer by end ,000,000 wheelie bins

19 Change-by-change reporting Drive improvement Identify change & impact Inspire trading partners Get industry on front-foot Share best practice Inform consumers & government Broadsheet & broadcast coverage See how improvement achieved Celebrate achievement Gauge return on investment

20 2010 Supply Chain Waste Submissions 75,000t waste Prevented or Redistributed 38,000t 150,000t waste Recovered or Recycled 115,000t

21 Types of initiatives of impact in 2010 The reported initiatives that prevented waste (or redistributed it to alternative markets) fell into one or more of the following categories: Design of product and packaging to protect or prolong the product Range selecting a new product range to minimise waste while increasing sales Forecast to better deal with weather, new products and / or promotions Measure focusing people's attention on preventing rather than managing waste Engage engaging and motivating our teams to want to eliminate waste Process accelerating the value adding flows of material and information Collaborate working better together with trading partners to prevent waste Redistribute via alternative markets for human or animal consumption We also welcome reports about recovery / recycling initiatives that have diverted waste from, for example, landfill or sewer

22 Focus on Prevention Waste Prevention Definition of the Five to Drive based on survey of the root causes of waste Design of product and packaging design to protect or prolong the product Range selecting a new product range to minimise waste while increasing sales Forecast to better deal with weather, new products and promotions Measure focusing people's attention on preventing rather than managing waste Waste Management Engage engaging and motivating our teams to want to eliminate waste

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24 Collaboratative Waste Prevention Toolkit

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26 The Five-to-Drive Design of product and packaging design to protect or prolong the product Range selecting a new product range to minimise waste while increasing sales Forecast to better deal with weather, new products and promotions Measure focusing people's attention on preventing rather than managing waste Engage engaging and motivating our teams to want to eliminate waste Marketing Commercial Supply Chain Operations Sustainability

27 So, how can we influence waste? Range selecting a new product range to minimise waste while increasing sales Design of product and packaging design to protect or prolong the product Engage engaging and motivating our teams to want to eliminate waste Measure focusing people's attention on preventing rather than managing waste Forecast to better deal with weather, new products and promotions

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29 2010 and 2011 Supply Chain Waste Submissions 75,000t waste Prevented or Redistributed 70,000t 150,000t waste Recovered or Recycled 195,000t

30 Agenda Food and packaging waste in the supply chain: preventing it from occurring in the first place Performance gaps and their scale. Why the gaps have grown and why opportunities to improve have not been exploited How some in the industry are challenging assumptions, driving change, demonstrating achievements and influencing the framework within which it operates Hard hitting case studies hot off the press from some of the most proactive FMCG - retail businesses in UK How to Improve Performance Together will be fully addressed in the special workshop from to 14:55 in the Secondary Hall :50 Main Hall, ECR Baltic Forum (Vilnius), 8 th November 2012

31 On-going Performance Improvement Programme

32 IGD Performance Improvement Programmes Supply Chain Waste On Shelf Availability Category RRP Supply Chain Waste Category RRP 31 Food Vendors 32 Consumable Vs 20 Fresh Vendors 15 Food 1 Vendors 15 Food 2 Vendors 24 Heath & Wellness April 2010 Nov 2010 Aug 2010 Dec 2010 March 2010 March 2011 Jan 2011 January 2012 May 2011 Nov 2011 Promotions Mgt On Shelf Availability On Shelf Availability Easy ID On Shelf Availability Nov 2006 Sept 2007 June 2007 March 2008 Jan 2008 June 2008 July 2008 July 2010 Aug 2009 Dec 2009 On Shelf Availability On Shelf Availability On Shelf Availability On Shelf Availability On Shelf Availability Nov 2003 Sept 2004 Sept 2004 April 2005 Feb 2005 July 2005 Sept 2005 May 2006 July 2006 Jan 2007

33 Waste Savings Achieved WRAP funded IGD programme 2010 Snacks and Cakes Promotions Mgt Waste Prevented (tonnes) WRAP funded IGD prog 11 Pot Noodles Waste Prevented (tonnes) Biscuits and Snacks Range Mgt Cake Flow Through Floral Waste Prevention Ready Meal Waste Prevention Collaborative Forecasting Sugar - Asda Sugar - Tesco Cans 295 Veg Cans Beverage Cans Flour 54 Supplier Waste and Dumped Stock 170 Sugar - Brakes Reducing to Clear to Prevent Waste Cooked Meats 46

34 Simple Changes, Big Impact 33% reduction in manufactures waste Up to 20% reduction in packaging 6% improvement in forecast accuracy Reduction in overall waste

35 End to End Process Review Forecast Process & Accuracy Production Planning Store Process Manufacturing Process Delivery Process

36 Purchase orders Accuracy of estimated orders reviewed Frequency of order estimates reviewed Order and production lead times were not synchronised

37 Improving Communication Communication was on a needs must basis Communication is now joined up and proactive not reactive Effective communication is key!

38 Design Secondary Packaging Noon reduced case sizes at no on-cost to improve flow to shelf; increasing availability without increasing waste To reduce waste at store, the case label was improved by using colour, a clearer font and by using only store-relevant abbreviations in the product description

39 Design Primary Packaging Reduced in size by 20% saving material! The material added no value to the consumer! Easier to put on shelf and fit more on the shelf! Clearer for customers to understand what they are buying, sales prove this! Easier for the consumer to shop, in store consumers told us! Clearly stamped on the label Meal-for- One, or meal for 2, No confusion! Why did we not think of this before!

40 Design Primary Packaging Keep meals for one in purple Move meals for two to clear bags to show off size better Move meals for four to a box to clearly display value for money Not the best Implement colours for different meals to make easier to shop Rearrange levels and adjust shelf heights What good looks like

41 Noon Ready Meal Waste at Morrisons Ready meal waste improvement despite significant disruption New Product Major Promotional Week

42 Food waste at Noon has reduced from over 30 tonnes per Month

43 Manufacturing & Distributions Finance A / P Sales Rep Marketing Customer Service MIS R & D Senior Management Sales Rep Buyer Marketing Customer Manufacturing Service Merchandising & Distributions Finance MIS Store A / P Operations R & D Senior Management Supply Chain Finance Planning Senior Management Sales Rep Buyer Marketing Customer Manufacturing Service Merchandising & Distributions Finance MIS Store A / P Operations R & D Senior Management Supply Chain Finance Planning Senior Management MIS A / P Buyer Merchandising Store Operations Supply Chain Finance Planning Senior Management MIS A / P MIS A / P Performance improvement made possible by Working together with colleagues and trading partners Building and asserting understanding Challenging the status quo Cutting through confusion Making small changes in behaviour & to designs Manufacturing & Distributions Sales Rep Marketing Customer Service Finance Working together with other supply chains Increasing use of proven solutions, achieving efficiencies and reducing prices to shoppers steering completely clear of anticompetitive effects Buyer Manufacturing & Distributions A / P Sales Rep Marketing Customer Service Merchandising MIS Store Operations Supply Chain R & D Senior Management Buyer Finance A / P Supply Chain Finance Planning Sales Rep Marketing Customer Service Manufacturing & Merchandising Distributions MIS Store Operations R & D Senior Management Buyer Senior Management Sales Rep Marketing Customer Manufacturing Service Merchandising & Distributions Finance MIS Store Operations A / P R & D Senior Management Supply Chain Finance Planning Senior Management MIS A / P Buyer Merchandising Store Operations Supply Chain Finance Planning Senior Management MIS A / P MIS A / P Finance MIS Finance MIS A / P R & D Planning A / P Senior Management Senior Management

44 How? Collaborate and ensure actions are based on evidence; not myth & legend or gut-feel alone win short-term gains to motivate others to join in the change process deliver results and apply learnings to other areas of the business Set -up On-Board Meeting Week 1 Phase 1 Measure & Understand Progress Meeting Week 8 Phase 2 Redesign & Pilot Progress Meeting Week 16 Phase 3 Roll-out & Sustain Evaluate Meeting Week 24 Access to reference material IGD Performance Improvement Programmes

45 IGD Performance Improvement Programmes Extra, quicker, easier and more sustainable and scalable results achieved by retailer-supplier cross functional teams working and learning together "Working with suppliers in a way that we have not been able to achieve before" "IGD s facilitation fee is dwarfed by the benefits gained from the programme "I see all the people taking part have grown in themselves and their knowledge and understanding is significantly better as a result of the programme What Sponsors & Participants Say "This is amazing. We have been trying to collaborate on this for years. Fantastic progress has now been made in just two months "No one is dominating: IGD is facilitating a neutral ground " "It hadn t been on the radar screen. Now we have made 110% progress and we have lots of momentum"

46 Agenda Food and packaging waste in the supply chain: preventing it from occurring in the first place Performance gaps and their scale. Why the gaps have grown and why opportunities to improve have not been exploited How some in the industry are challenging assumptions, driving change, demonstrating achievements and influencing the framework within which it operates Hard hitting case studies hot off the press from some of the most proactive FMCG - retail businesses in UK How to Improve Performance Together will be fully addressed in the special workshop from to 14:55 in the Secondary Hall :50 Main Hall, ECR Baltic Forum (Vilnius), 8 th November 2012