Hull University finds ways to make gains out of Total Loss

Hull University Business School is examining product loss in the supply chain in a cross-disciplinary project, dubbed 'Total Loss', in partnership with an undisclosed grocery retailer.

The four-month initiative will cover food and non-food and scrutinise all the major causes of loss, including spoilage, wastage and theft.

The focus is on the retail end of the chain, from distribution to store, but vendor-managed inventory could apply at a later stage.

"We're looking at operations at store and distribution centre level, talking to people to see how the system works," said professor David Grant, steering the project. "We're involving our systems studies and organisational behaviour and human resources groups. Forecasting alone doesn't give you a holistic picture."

He said the project was a commercial proposition, with the hope that at least some of the findings could eventually be made publicly available. "In this case we have been talking to this retailer for over a year and this is the first project they have been involved in with us. We're developing graduate and undergraduate opportunities with them and are working with other firms in this way."

Project Total Loss was at the initial data gathering stage, after which solutions would be piloted and rolled out after research was complete, said Grant. The work entails regular meetings between Grant and board directors.

So far the business school had helped more than 500 small firms tackle supply chain issues, generating an additional £52M in sales.

Grant said most food-related loss issues were related to use-by dates, making short shelf-life products such as sandwiches major sore points. However, he said he had been involved in research highlighting seasonal, particularly Christmas lines. "I was involved in something similar for a whisky distiller in Scotland, which found that write-offs were costing it £250,000 a year. One of the interesting things was specific issues to do with Christmas. The question arose: when you have a special Christmas edition of whisky, what happens on January 2?"

The client could not remove the labels, because the adhesive it used was too powerful and the product could not be decanted into other bottles for health and safety reasons, he said. Other manufacturers used lasers to align labels very precisely on their products, leading to wastage if alignments were out.