Reducing Food Waste in the Retail Supply Chains by Improving Efficiency of Logistics Operations

Abstract

One of the basic problems of sustainability in modern society is the reduction of waste, particularly when it comes to food. Food waste has negative impacts on different dimensions of sustainability: social (hunger), economic (resource costs), and environmental (resource consumption and waste generation). This paper focuses on waste reduction through improving the inventory management system in the dairy distribution chain by the application of modern information and communication technologies (ICT). The approach is tested and verified in a case study by application of simulation modelling. Two inventory management models are created, and their impact on waste in the distribution part of the supply chain is examined. Model 1 represents the current dairy inventory management system in the supply of retail stores. Model 2 is based on a higher level of information connectivity between participants (RFID product labelling and the appropriate level of information technology), enabling automatic product ordering and changes in inventory management policy. The obtained results confirm that coordinated inventory management, supported by the application of modern ICT, can significantly contribute to the improvement of the sustainability of the food supply chain, and provide an exact quantification of the given contribution in the case of the dairy industry.