Impact story
Combating food waste by supply chain modelling and optimization
Research shows that in the EU about 5 million tons of edible food ends up as food waste at supermarkets and other retailers. This loss through waste is an environmental, economic and social problem.
One of the major causes of waste is the mismatch between demand and supply in combination with the perishable nature of food products. Mismatches between supply and demand are commonly addressed by buffering products at stock points throughout the supply chain, however when keeping perishable items in stock too long waste will be considerable. ‘Managing these inventories is especially challenging for retailers like supermarkets, as many consumers are keen on buying the freshest items from the shelf, meanwhile leaving older products turn into waste’, says Rene Haijema, researcher in the Operations Research and Logistics (ORL) group.
Our mathematical models provide insight into how food waste can be reduced by supply chain interventions, such as introducing dynamically adjustable expiration dates.
Interface
The ORL group participated in the Horizon2020 project REFRESH together with the Marketing and Consumer Behaviour (MCB) group and Food and Biobased Research, and with involvement of many other partners: universities, research institutes, private businesses, governments, NGOs and other stakeholders.
‘In this project our group focused on the interface between retailers and consumers’, says Haijema. ‘Our mathematical models provide insight into how food waste can be reduced by supply chain interventions, such as introducing dynamically adjustable expiration dates and prices using real time estimates of the actual product quality and safety. We combined this with calculating the impact of innovative packaging technology that dynamically predicts the remaining shelf life of fresh produce. In addition to the effects on food waste, we also included the impact on retailers profits and service levels they can offer to consumers in our calculations.’
Parallel to this research, ORL was asked by Slimstock, a Dutch key supplier of software solutions for inventory management, to test their algorithms and show the improvement potential using the latest scientific insights and results. The focus is on having a better control over the balance between product waste and consumer service level by improving the stock replenishment decisions.
Combating food waste is now added to classical supply chain and inventory management models.
State of the art techniques
In a video message, EU Health and Food Safety Commissioner Vytenis Andriukaitis states that REFRESH has resulted in important guidelines for the EU policy on food waste reduction. The tools delivered in the REFRESH project yield managerial as well as policy insights, tools, and a guide to reduce food waste throughout the EU. Haijema: ‘Based on our recommendation, Slimstock is improving their software and also invited us for doing additional research.’
Designing supply chain solutions to minimize waste has become a recurring theme in ORL’s research. With state of the art techniques such as dynamic programming, simulation, machine learning and reinforcement learning the ORL group helps policy makers and supply chain members to reduce food waste and losses while maintaining high service levels to their customers. Haijema: ‘In our work we are used to developing complex mathematical and computer models in which social, economic and environmental sustainability is optimally combined. Combating food waste is now added to classical supply chain and inventory management models. That makes it even more complex and therefore even more challenging and fun for us.’