Sunday, March 11, 2007

Sell by mm/dd

BTFM dumped food 1
Originally uploaded by M.Eugenia.

According to an estimate shown on BBC's One Planet, a third of all food in the developed world gets dumped. A lot of food goes waste in the developing world as well. But the reasons for wastage are vastly different. In the developing world, a lot of the wastage is because of inefficiencies in supply chain, inadequate refrigeration facilities etc, where as in the developed world, a large chunk of the wastage is at the household level. For instance, in UK alone, out of US$ 38 billion worth of annual food wastage, the retail-store sell-by expiry contribution was a mere $3.54 billion !! They clearly got their act together.

As you might have guessed, information can play an enormous role in minimizing waste in both worlds. A little e-chart on the refrigerator that keeps a tab on expiring foods can be an approach. Another approach could be letting people know the amount of energy and water spent in growing all that food. For example, fruits take water 100+ times their weight. A lot of developed countries import food (as shown in this map) which means wastage of water at places where its usually scarce.

One key insight from both IS210 and IS243 has been: "The key to supply chain optimization isn't moving things faster according to plans, it is moving things smarter according to actual demand" (which implies its more about managing information than actual physical goods). Corporates in developed world have realized and enormously benefited from this for a long time. Besides not seeing any benefit from this realization, developing world poses another significant problem. Its really hard to see an end-to-end system where there are a million different vendors and farmers both of whom have little holdings and revenues. It's a challenging problem and pay-offs can be as large as significant elimination of global poverty and hunger.

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