Resource Efficient Innovations Database (REID)

Range rationalisation reduces waste

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Range rationalisation reduces waste
Unilever demonstrates how range rationalisation can significantly reduce product and packaging waste
In Use – This case study is one of a number presented in the ECR (Efficient Consumer Response) report published in November 2010.

Benefits
Packaging Reduction, Resource efficiency (e.g. filling line efficiency), Storage and Transport efficiency

Product Categories
Drinks, Food, Home Improvement, Household & Personal Care

Relevant Materials
Adhesives, Biopolymer, Cartonboard, Coatings/Inks, Corrugated, Glass, Laminates, Liquid Beverage Cartons or other composites, Metal, Paper, Plastic – Flexible, Plastic – rigid, Plastics - Other / mixed, Plastic - woven, Other (e.g. soluble sachets )

Relevant Packaging Formats
Aerosols, Bottles and jars, Cans, Cartons, Cartridges, Closures and dispensers (including: triggers, dosing aids, reseal and reclose devices etc.), Corrugated box/case, Cushioning, Flexible & Films, IBCs (flexible and rigid), Labels, Pallets, RTP, Sacks, Shrink and stretch wrap, Totes, stillages, various bulk formats, Void fill (various materials and forms - solid, foamed, lattice, scrunched etc.)

Supply Chain Phase
Filling, Packing, Production, Storage, Supply Chain handling systems and store replenishment, Transportation

Details

In a supply chain rationalisation project Unilever reduced its range by more than 1,200 stock keeping units (SKUs) as part of a bid to cut its long tail, prioritise top sellers and reduce waste. The range rationalisation removed a huge amount of complexity in Unilever's supply chain operations, reduced the risk of overstocks and waste, and enabled staff to spend more time on forecasting for its top sellers and building collaborative forecasts with customers. Having fewer SKUs meant fewer size or flavour changes (and therefore fewer changeovers) which also meant that more production lines could be dedicated to single variants, increasing factory efficiency. As an example of the potential savings, the amount of product and packaging waste sent to landfill or recovery due to obsolescence in Unilever's ambient food business was slashed from 486t in 2009 to 122t in 2010.
Details of the project are outlined in the case studies section of a new Efficient Consumer Response (ECR) UK guide. The new ECR UK waste prevention guide is designed to help manufacturers and retailers identify ways to reduce waste and redistribute, recycle or recover it where elimination is not possible. The guide contains practical advice on waste reduction plus a wealth of information about everything from anaerobic digestion, composting, rendering and energy recovery to mechanical heat treatment. The large list of case studies on the site also highlights how firms in the sector from Asda to Lactalis-Nestle© Chilled Dairy UK have found more creative ways to avoid waste through range rationalisation, different case sizes, re-structuring their supply chain planning teams and designing new packaging formats.

Potential Benefits

As well as reducing product and packaging waste through reduced obsolesence, range rationalisation can significantly improve the efficiency of production and distribution.

Intellectual Property

These are examples of best practice case studies, which can be accessed free through the ECR report published in November 2010.

Consultant View

Rationalising packaging and stock keeping units has potential for significant environmental and cost savings. However, the challenge is different depending on the sector and the specific business model. The niche for some businesses is to focus on more variants. Nonetheless, there are still opportunities to reduce complexity in all supply chains. Although many of the case studies presented in this ECP report focus on the food sector, the principles applied are equally as relevant to the non-food sector.

Contacts and Further Information

The relevant materials can be downloaded at:
http://www.igd.com/index.asp?id=1&fid=5&sid=43&tid=158&foid=127

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