How can you minimize waste and spoilage when managing perishable inventory levels?

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Managing perishable inventory levels is a crucial challenge for import/export operations, especially for food, pharmaceuticals, and other sensitive products. If you don't plan and monitor your inventory carefully, you risk losing money, quality, and customer satisfaction due to waste and spoilage. Here are some tips to help you optimize your perishable inventory levels and avoid unnecessary losses.

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Aimée (Marie) Ingabire

Local Sourcing Development Manager at BRALIRWA (part of the Heineken Company)
Jonathan David Ursell

Director at UK India Business Council
BIM Arnaud Cedric

Supply Chain Manager at Heineken Rwanda

1 Know your demand patterns

The first step to minimize waste and spoilage is to understand your customer demand patterns and how they vary over time, season, location, and product type. You need to forecast your demand accurately and adjust your inventory levels accordingly. You can use historical data, market research, and customer feedback to improve your demand forecasting. You should also communicate with your suppliers and customers regularly to anticipate any changes or disruptions in demand.

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Aimée (Marie) Ingabire

Local Sourcing Development Manager at BRALIRWA (part of the Heineken Company)
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To ensure comprehensive perishable inventory management and minimize waste: 1. Implement FIFO (First In, First Out) system for inventory rotation. 2. Maintain cold chain integrity with regular temperature monitoring. 3. Conduct regular inspections to remove spoiled items promptly. 4. Use proper packaging to extend shelf life and prevent contamination. 5. Ensure proper handling, hygiene, and storage conditions. 6. Utilize accurate inventory forecasting and demand planning. 7. Establish supplier quality assurance processes. 8. Provide ongoing employee training and promote continuous improvement. By addressing these critical points, you can effectively minimize waste and maximize the quality of perishable inventory.

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BIM Arnaud Cedric

Supply Chain Manager at Heineken Rwanda
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Being able to understand the forecast and it's seasonality is key, but one also needs to understand the consumption patterns with various demand scenarios. This will prevent unnecessary very high/low stocks.

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2 Choose the right packaging and storage

The next step is to choose the right packaging and storage methods for your perishable products. You need to consider the shelf life, temperature, humidity, light, and other factors that affect the quality and safety of your products. You should use packaging that protects your products from damage, contamination, and deterioration, and that complies with the regulations and standards of your destination markets. You should also use storage facilities that maintain the optimal conditions for your products and that have adequate security and monitoring systems.

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Jonathan David Ursell

Director at UK India Business Council
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From personal experience, there are some practical considerations with perishable goods. One is the logistics. The longer the transport journey, the greater consideration must be given to partners and expertise in cold chain supply. If there are multiple distribution points, other human elements come into play such as the handling of goods when docking, or arriving at the final warehousing point.

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3 Implement FIFO and FEFO principles

The third step is to implement the FIFO (first in, first out) and FEFO (first expired, first out) principles for your perishable inventory. FIFO means that you sell or use the products that you received first, before the ones that you received later. FEFO means that you sell or use the products that have the earliest expiration date, before the ones that have a later expiration date. These principles help you reduce the risk of having expired or spoiled products in your inventory and ensure that you deliver fresh and high-quality products to your customers.

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BIM Arnaud Cedric

Supply Chain Manager at Heineken Rwanda
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It is equally important to regularly track inventories and relate it to planned consumption vs actual consumption. This shows you if all is going according to plan or if corrective action is required. Also this will gives good results if done with FIFO/FEFO implementation in place.

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4 Track and control your inventory

The fourth step is to track and control your inventory levels and movements. You need to have a reliable and accurate inventory management system that records and updates the information about your products, such as quantity, location, status, and expiration date. You should also conduct regular inventory audits and reconciliations to verify the accuracy of your data and to identify any discrepancies or errors. You should also have clear and consistent inventory policies and procedures that define the roles and responsibilities of your staff and partners.

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5 Reduce lead times and order sizes

The fifth step is to reduce your lead times and order sizes for your perishable products. Lead time is the time between placing an order and receiving the products. Order size is the quantity of products that you order at a time. By reducing your lead times and order sizes, you can improve your inventory turnover, which is the number of times that you sell or use your inventory in a given period. A higher inventory turnover means that you have less inventory on hand, which reduces your holding costs and your exposure to waste and spoilage.

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6 Manage returns and donations

The sixth step is to manage your returns and donations of your perishable products. Returns are the products that are sent back to you by your customers for various reasons, such as defects, damages, or dissatisfaction. Donations are the products that you give away to charitable organizations or communities for social or environmental purposes. You need to have a clear and efficient process for handling your returns and donations, such as inspecting, sorting, repackaging, or disposing of them. You should also try to minimize your returns and maximize your donations, as they can help you recover some of your costs and enhance your reputation.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Edimilson da Silva Guedes

Coordenador de Logística
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Muito importante ressaltar a importancia de pessoas bem preparadas, e comprometidas em fazer com que as ferramentas mencionadas e os processos de controle tenham eficácia. E entender também que n?o é somente visando o lucro, mas também evitar o desperdício.

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How can you minimize waste and spoilage when managing perishable inventory levels?

1

2

3

4

5

6

7

1 Know your demand patterns

2 Choose the right packaging and storage

3 Implement FIFO and FEFO principles

4 Track and control your inventory

5 Reduce lead times and order sizes

6 Manage returns and donations

7 Here’s what else to consider

Import/Export Operations

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How can you minimize waste and spoilage when managing perishable inventory levels?

1

2

3

4

5

6

7

1 Know your demand patterns

2 Choose the right packaging and storage

3 Implement FIFO and FEFO principles

4 Track and control your inventory

5 Reduce lead times and order sizes

6 Manage returns and donations

7 Here’s what else to consider

Import/Export Operations

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