How to Scale Delivery Operations While Reducing Food Waste

The food supply chain begins on farms, where products are grown or raised, and spans processing, storage, transportation, and delivery to consumers. Unlike other industries, food supply chains handle perishable goods, requiring speed and precision to reduce waste.

Delivery scalability is essential for meeting consumer demand while minimizing food waste, as scalable systems can adapt to demand changes without compromising efficiency. These two goals are closely connected: streamlining delivery operations reduces inefficiencies that lead to spoilage.

In this blog, we’ll explore how to align scalability and waste reduction through technology, partnerships, and cultural shifts in supply chain management.

Understanding delivery scalability

Good scalability in the food supply means intensifying or de-intensifying operations without wasting food, reducing the food's quality, or reducing the speed at which the company delivers the food.

Modern-day organizations must carefully consider the following factors/resources to help them implement scalable solutions.

Good scalability hinges on demand forecasting (accurately assessing future resources) and inventory management (making the right products available in the correct quantity at the right time).

Forecasting demand helps an organization respond to customer needs. As a result, they have shortages or overproduction.

For instance, restaurants notice changing portion preferences among customers following the semaglutide diet and other health-focused eating patterns. This creates an unexpected opportunity for businesses to right-size their preparations and reduce excess inventory.

As the table above describes, data must be used to predict future demand. This information helps businesses stock the right quantities.

The impact of food waste on the supply chain

Food waste in America is an endemic of sorts.

According to ReFED's report, the United States wasted 88.7 million tons of food, equivalent to 38% of the population’s total food supply. 

This is either:

• Unsold food, which points to poor demand forecasting. 

• Or uneaten food, indicating poor alignment with customer preferences.

Overall, our grocery stores are not operating efficiently. 30% of surplus food ends up in landfills. Food waste is a disaster, given the levels of food insecurity in the U.S. and beyond. At the same time, this wastage comes at a $16 billion cost, says Food Engineering.

Only 11% of food is recycled back into the food supply chains through donations or used as animal feed.

The wastage issue is stark and requires urgent addressing. Resolving the crisis starts by examining its root causes.

Food waste has significant environmental and economic consequences. According to the World Wildlife Fund, it contributes 6% to 8% of global greenhouse gas emissions, with methane from rotting food being 80 times more harmful than carbon dioxide.

Research also indicates that economically, loss or wasted food results in $218 billion in losses in the U.S. (United States Environmental Protection Agency). 

How delivery scalability reduces food waste

Delivery scalability analyzes the food supply chain to identify the parts you can tweak to run better.

Below are examples of how delivery scalability manifests in the food supply chain network.

Route optimization

A solid strategy to significantly reduce food waste is same-day delivery. This helps ensure that food arrives fresh at its destination.

Route optimization is the science of calculating the most efficient way to make food deliveries using the following variables in the food supply chain context:

• The food's best-by date

• Traffic and weather conditions

• Fuel efficiency

• Food temperature

• Delivery addresses

• Road restrictions

A route optimizer tool is fed these variables. In return, it tells a driver the best route that guarantees timely delivery and minimizes food loss.

Food storage and inventory turnover

Store food according to its optimal requirements (like temperature) and implement inventory management practices. These can include just-in-time delivery to keep stock moving and ensure no food is left at the warehouse longer than needed.

Understanding future demand is a big part of optimizing storage and inventory. This allows suppliers to increase or decrease orders and warehouse capacity to meet current needs.

Technological innovations supporting scalability

Supply chain management relies heavily on technology. Anyone in the food business can benefit from learning and applying the latest technological practices. 

These include the following:

• IoT devices that track storage conditions in real time. This ensures food is kept at optimal conditions. IoT devices instantly respond to and auto-adjust parameters like temperature in response to the environment.

• AI tools to forecast demand and optimize routes.

• While you might not immediately associate Blockchain with the supply chain, the technology can improve the transparency and traceability of food as it moves across the network. This provides valuable data and feedback that can be used to optimize the supply chain.

Additionally, solutions like Deliverect are available on the market. They integrate multiple delivery platforms to streamline order processing and diminish the margin for error responsible for food wastage.

Chipotle used Deliverect to expand its business operations while minimizing food waste. When the restaurant chain entered the home-delivery market, they wanted to make sure they kept order errors (which lead to food waste) to a minimum, and they did.

While many in the food delivery market are experimenting with AI and automation, the future looks exciting. 

We're not too far away from a point where we'll see robots packing, storing, sorting, and processing food, reducing human error and improving efficiency, and the applicability of 3D printing in enabling localized, on-demand production of food packaging, reducing waste and transportation emissions.

Best practices for implementing scalable delivery solutions

We've already discussed how technology, automation, and route optimization contribute to scalable delivery solutions that minimize food waste.

Other best practices include:

Optimized network design

While route optimization helps food reach its destination as efficiently as possible, redesigning the overall network can add further value. You can:

• Locate warehouses closer to customers, freight corridors, and transportation hubs.

• Continually monitor your food delivery network to determine optimal configurations.

Train your staff

You need to have the right employee culture in place. Everyone needs to be sold on scaling without wasting edible food.

Appropriately trained staff will know what to do when operational demands fluctuate. And they'll do it without wasting food or compromising quality.

Ensure they're trained on using technology because any piece of tech is only as good as its operator.

Having SOPs and standard business practices in place is crucial in succession planning. It ensures that staff still follow procedures when you hire someone new.

Partnership and collaboration opportunities

Scalability is not a lone-ranger activity. Organizations must reach out to relevant partners who can help them scale efficiently. These could be partners in logistics, technology, or suppliers.

The great thing about partnerships is that you can scale without overusing existing resources. You can also share and access knowledge you weren't previously aware of. Your partners can compensate for your weaknesses, whether food waste, delivery speed, or operational issues.

The right partnerships can work wonders.

Measuring success: Key performance indicators (KPIs)

Delivery scalability can't be a one-time initiative. The network needs continuous monitoring, evaluation, and refinement.

Establishing a continuous feedback loop helps you spot and address all inefficiencies contributing to food wastage. To do that, you need to have KPIs in place.

• Successful deliveries, average time per delivery, first attempt delivery rate, and on-time delivery rate.
  High numbers in these areas indicate a healthy position and the capacity to handle increased demand. Your drivers are efficient, and your system can handle increased capacity without compromising quality.

• Auto dispatch rate
  Measures the strength of your automation, which is essential in handling scalability.

• Customer satisfaction
  Higher customer satisfaction means you're giving them good food in good time.

• Cost per delivery
  Your cost per delivery should reduce as you scale. If it's not, there's a problem.

• Total weight of food waste, waste by category, economic value of waste, food waste by source (spoilage, delays, etc.)
  Collecting appropriate food waste data paints a picture of the effectiveness of delivery scalability. If scaling operations cause more waste, you must return to the drawing board. Additionally, understanding the source of the waste is crucial–you need to know what to fix and where.

Conclusion

Efficient delivery scalability in the food supply chain network has economic and environmental benefits. This blog has looked at different ways to implement delivery scalability, such as technology, staff training, and logistical tweaks like route optimization.

Implementing these while using KPIs to monitor the impact of any changes is crucial in ensuring delivery scalability works for the long term and minimizes food wastage.

Take the ideas mentioned here into account when planning scalability initiatives. 

Want to scale your delivery service? Let’s discuss how the Deliverect ecosystem can help you make more sales without reducing any more food waste. Book a call with us today!