In 2017, the Australian Government reported that the cost of food waste to the economy is estimated to be around $20 billion each year, with 2.2 million tonnes of disposed-of food belonging to the commercial and industrial sectors.
Since then, the government has implemented a strategic framework that aims to halve Australia’s food waste by 2030—a goal that aligns with the United Nation’s Sustainable Development Goal 12 for sustainable consumption and production patterns.
While this has certainly set the stage for a more sustainable nation, Australia’s retail sector can be doing more to help achieve this goal with the aid of new and emerging technologies.
Retail’s role in sustainability
Every year, 232,000 tonnes of food is wasted in the retail sector alone. There is clearly a lot of room for improvement. Each business has a responsibility to increase its sustainability, and there is an economic incentive to reducing food wastage, which concurrently shrinks profits.
The action retailers can take is two-fold. First, optimising the life cycle of perishables in the supply chain can greatly reduce wastage. Secondly, enhancing the logistics of the supply chain can greatly reduce the chance of food perishing in-transit, and reduce carbon emissions.
The good news is that emerging technologies in the sector are providing opportunities to do this. The better news? The solutions are of mutual benefit to retail organisations, the government’s sustainability goals, and the economy overall.
How new technologies can help
A large retail chain in the U.S. has substantially reduced food wastage as well as operating costs by automating alert and energy management using the Internet of Things (IoT). With real-time notifications, and automated handling of work orders, the retailer has increased the shelf life of food by reducing the time taken to create a work order from nearly two days to a few hours, and response times from several hours to a few minutes. The technology has enabled the retailer to efficiently handle a high volume of alerts on abnormal system behaviours, and initiate timely action by better predicting failures.
As Australian retailers become more familiar with the concrete applications of Artificial Intelligence (AI) and IoT, it is important to understand the benefit of combining these two technologies. The convergence of AI and IoT can help track the life expectancy and health of fresh goods both in-store and in-transit, and alert operations personnel in real time to issues such as the refrigerator door being left open, or the need to change HVAC settings based on temperatures and lighting. Through automation, these alerts can be ranked based on severity and automatically sent to the appropriate personnel, such as supply chain supervisors or technicians.
This can be achieved with a single IoT platform, powered by AI, allowing retailers to aggregate and analyse information from every point “at the edge”, such as different building systems, haul trucks, and all the equipment used in between. From this single source of truth, retailers can quickly identify and action problems in their food supply chain.
For example, a major problem in the supply chain is legacy refrigeration systems. These systems typically have slow response mechanisms that can take hours to notify operations teams about an issue, and most lack an early warning system for the health of perishables or the refrigerator itself. Analytics can solve this and provide early warnings in real time.
Optimising the perishables lifecycle in the supply chain
Apart from addressing the quality control aspects of a supply chain, retailers must also look at how they can enhance logistics efficiencies associated with hauling perishables across the country.
One emerging technology that is starting to gain traction in other sectors is autonomous trucks. Australian truck drivers are limited to a maximum 12 hours of driving before needing to rest overnight—automation in the supply chain removes this and instead expedites the process of transporting perishables and getting them to their destination faster. Autonomous trucks also remove the risks of driver fatigue.
In light of concerns around automation replacing jobs, there is an opportunity for long-haul truck drivers to be retrained in other areas of supply chain logistics. In fact, a recent report by Faethm suggests automation could create some 5.3 million jobs within the next decade.
Emerging technologies offer food for thought
While the nascent technology of autonomous driving has some way to go before it is fully integrated into retail supply chains, it does serve as food for thought to retailers looking to enhance efficiencies across the supply chain.
More immediately, businesses looking to play their part in reaching the government’s 2030 goal can look to AI and IoT to monitor and safeguard the life expectancy of fresh produce, thus reducing food wastage, combatting lost revenue, and satisfying shoppers with stocked shelves.
Gaurav Sharma is head of industries business for ANZ at Cognizant