11.10.22
Overproduction and waste are exacerbating the supply chain crisis and hitting businesses to the tune of 3.6% of their annual profits as nearly 8% of stock perishes or is discarded.
This significant loss includes 4.3% of stock that spoils in the supply chain before it even reaches the shelf with a further 3.4% discarded due to overproduction. This loss amounts to $163.1 billion worth of inventory.
This data has been published in a new global report released Nov. 10, 2022 by Avery Dennison. The Missing Billions: The Real Cost of Supply Chain Waste is an in-depth report assessing the state of global supply chains and the issue of waste across the US, UK, France, China and Japan.
The data analyzed 318 global firms and found that while companies are acutely aware of the problem, they are not investing the budget required to fix it.
Respondents say that on average 28.9% of their organization’s sustainability impact comes from the supply chain. However, just 4.4% of technology budgets on average are specifically dedicated to supply chain sustainability improvement.
The report highlights an intention to address these issues. A substantial 61% of organizations have already deployed solutions to track unique items but this will rise to over 95% as a further 34.6% ‘plan to’ as companies seek to improve supply chain visibility and traceability.
“The current supply chain disruption is leading to a waste crisis making the case for sustainable practices even more urgent and necessary,” said Francisco Melo, SVP and GM at Avery Dennison Smartrac. “There is a huge opportunity for organizations to accelerate digital transformation that will help to create longer-term systemic change. The moral and economic case is clear and the study shows the desire from organizations to embrace technological advancements for the benefit of business and the planet.
“Digital triggers such as Radio Frequency Identification or RFID, provide unprecedented end to end visibility in a highly efficient and accurate way,” added Melo. “Connected products not only shine a light on supply chains but also reveal valuable new information to enable consumers to make better decisions, including transparency and carbon footprint data.”
The data also reveals some concerning trends around sustainability with just 16% of shoppers putting sustainability in their top three deciding factors and only 12% prioritizing the ethical sourcing of their products. However, the research also points to a shift in the desire for durable products with ‘durability’ ranked by 1 in 2 global consumers (48%) as a top five concern.
This significant loss includes 4.3% of stock that spoils in the supply chain before it even reaches the shelf with a further 3.4% discarded due to overproduction. This loss amounts to $163.1 billion worth of inventory.
This data has been published in a new global report released Nov. 10, 2022 by Avery Dennison. The Missing Billions: The Real Cost of Supply Chain Waste is an in-depth report assessing the state of global supply chains and the issue of waste across the US, UK, France, China and Japan.
The data analyzed 318 global firms and found that while companies are acutely aware of the problem, they are not investing the budget required to fix it.
Respondents say that on average 28.9% of their organization’s sustainability impact comes from the supply chain. However, just 4.4% of technology budgets on average are specifically dedicated to supply chain sustainability improvement.
The report highlights an intention to address these issues. A substantial 61% of organizations have already deployed solutions to track unique items but this will rise to over 95% as a further 34.6% ‘plan to’ as companies seek to improve supply chain visibility and traceability.
“The current supply chain disruption is leading to a waste crisis making the case for sustainable practices even more urgent and necessary,” said Francisco Melo, SVP and GM at Avery Dennison Smartrac. “There is a huge opportunity for organizations to accelerate digital transformation that will help to create longer-term systemic change. The moral and economic case is clear and the study shows the desire from organizations to embrace technological advancements for the benefit of business and the planet.
“Digital triggers such as Radio Frequency Identification or RFID, provide unprecedented end to end visibility in a highly efficient and accurate way,” added Melo. “Connected products not only shine a light on supply chains but also reveal valuable new information to enable consumers to make better decisions, including transparency and carbon footprint data.”
The data also reveals some concerning trends around sustainability with just 16% of shoppers putting sustainability in their top three deciding factors and only 12% prioritizing the ethical sourcing of their products. However, the research also points to a shift in the desire for durable products with ‘durability’ ranked by 1 in 2 global consumers (48%) as a top five concern.