DIRECT, a tool for change: Co-designing resource efficiency in the food supply chain

Accepted Manuscript DIRECT, a tool for change: Co-designing resource efficiency in the food supply chain Karli Verghese, Simon Lockrey, Maud Rio, Marshall Dwyer PII:

S0959-6526(17)32575-1

DOI:

10.1016/j.jclepro.2017.10.271

Reference:

JCLP 11063

To appear in:

Journal of Cleaner Production

Received Date: 20 December 2016 Revised Date:

25 June 2017

Accepted Date: 24 October 2017

Please cite this article as: Verghese K, Lockrey S, Rio M, Dwyer M, DIRECT, a tool for change: Codesigning resource efficiency in the food supply chain, Journal of Cleaner Production (2017), doi: 10.1016/j.jclepro.2017.10.271. This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.

DIRECT Journal Article

ACCEPTED MANUSCRIPT

DIRECT, a tool for change: Co-designing resource efficiency in the food supply chain Karli Verghese1, Simon Lockrey1, Maud Rio2, Marshall Dwyer3 1

of Architecture and 3000, Australia, Grenoble, France,

RI PT

Karli Verghese and Simon Lockrey, Industrial Design Program, School Design, RMIT University, 124 LaTrobe Street, Melbourne, [email protected] and [email protected] 2 Maud Rio, University Grenoble Alpes, CNRS, G-SCOP, F-38000 [email protected] 3 Marshall Dwyer, The Hollar Initiative, Ringwood, Victoria [email protected] Abstract

3131,

Australia,

TE D

M AN U

SC

The problem of food waste has captured global attention in recent times. The United Nations Food and Agricultural Organisation (FAO) estimates that around one-third of the edible parts of food produced for human consumption is lost or wasted globally; equivalent to 1.3 billion ton each year. This paper investigates a newly developed tool to help support better resource management for food manufacturers in dealing with the food waste issues. Our primary contribution lies in our dissection of the participatory nature of the tool development i.e. how do we engage the industries involved for the best social, environmental and economic outcomes? We use a case study method, drawing on data deriving from the various food manufacturing organisations and research partners involved in the development and use of the Dynamic Industry Resource Efficiency Calculation Tool (DIRECT). Through this approach a deep understanding of people and processes involved with the tool development is established, by a ‘triangulation’ of multiple data from a number of project contexts to develop our insights. We conclude by revealing the establishment of new food manufacturing projects for DIRECT, in terms of what the recent commissioners of said projects identify as the value the tool and process provide, and what that might mean for better food waste outcomes in the future. This validates utilising a co-design approach demonstrated in our paper, and justifies further research into broadening the adoption of such methods in addressing food waste.

AC C

EP

Keywords: Food Manufacturing, Resource Efficiency, Sustainability Tool, Food Waste, True Cost of Waste, Co-design, Stakeholder Engagement

DIRECT Journal Article

ACCEPTED MANUSCRIPT INTRODUCTION

1.1

Background

M AN U

1

SC

RI PT

The design, planning and operations of food manufacturing and production lines should be such that they are optimised to convert raw materials, with the input of energy and water, into saleable product. In an ideal situation there would be no waste. When waste does occur in a process or supply chain, it highlights inefficiencies resulting in a loss of resources and contributing to a range of environmental, social and economic impacts. The reasons for waste are many and varied. Taking time to understand where, how much and why this waste is occurring, opportunities to be more efficient and possibly to value add can be identified. Tools for food manufacturers do not currently take an integrated approach, where waste, audits, causality, financial costs, and improvement measures are combined to create efficient and value based outcomes. As such we initiated a project working with food manufacturers with a co-designed process, the outcome of which was the design and development of one such resource efficiency calculation tool – the Dynamic Industry Resource Efficiency Calculation Tool (DIRECT). We looked to integrate disparate aspects of food waste through a participatory process, so that DIRECT was developed with and for food manufacturers and would actually make a difference to their businesses. This paper explores these elements in the context of food manufacturing operations in Melbourne, Australia based organisations.

Defining waste

AC C

EP

TE D

According to the definition in environmental protection Acts in Australia (which vary minimally across the majority of Australian States), ‘waste’ can be defined as “unwanted by-product from an activity, whether the product or by-product is of value or not” (ACT Parlimentary Counsel, 1997, NSW Government, 1997, Victorian EPA, 1970). In the case of waste in the food supply chain, distinctions are made between food and inedible parts of plants and animals. In June 2016, The Food Loss and Waste Accounting and Reporting Standard (FLW Standard) was released, developed by a multi-stakeholder global team (WRI et al., 2016). For the first time, global definitions, reporting requirements and guidance have been agreed upon which will provide a credible and consistent approach to measure, report on and manage food loss and waste. Prior to the release of the FLW Standard, food loss was described when it occurred during agricultural production, post-harvest handling or processing of products, and as food waste when it occurred at the end of the food chain (during distribution, retail sale and final consumption) (Parfitt et al., 2010). This focus has now changed, with the FLW Standard interested in referring to ‘material type’ and “possible ‘destinations1’ for food and/or associated inedible parts removed from the food supply chain” (WRI et al., 2016, p 17). The material types are: food, which is “any substance whether processed, semi-processed, or raw that is intended for human consumption”; and inedible parts that are “components associated with a food that, in a particular food supply chain, are not intended to be consumed by humans” (WRI et al., 2016, p 15).

1

Possible destinations as defined in FLW Standard v1 (6 June 2016): animal feed; bio-material/processing; codigestion/anaerobic digestion; composting/aerobic process; controlled combustion; land application; landfill; not harvested/ploughed-in; refuse/discards/litter; sewer/wastewater treatment.

DIRECT Journal Article

ACCEPTED MANUSCRIPT 1.2

Food waste statistics – a snap shot

An estimated 1.3 billion tonnes of edible parts of food produced for human consumption is lost or wasted globally according to the FAO (Gustavsson et al., 2011, p. 4), which is estimated to cause as much as $940 billion per year in economic losses globally (WRI et al., 2016). This represents significant local and global opportunities in capturing resources that have been processed for added value that seem to be falling through cracks in the food supply chain.

RI PT

Within food product manufacturing, large swathes of waste are generated. In Australia, food waste is estimated at 501,824 tonnes in food product manufacturing, of which 79% is recovered and diverted from landfill per year (Encycle Consulting and Sustainable Resource Use, 2013) (see Figure 1). In the UK estimates suggest 3.9 million tonnes of food waste is generated in food manufacturing per year, at a cost of £3.7 billion (US$5.9 billion) (Parry et al., 2015). While in the USA, the quantities are even larger (Gunders, 2012) at an estimated 44.3 billion pounds (20 million tonnes) of food waste in 2011 (BSR, 2013, p 7).

TE D

M AN U

SC

Figure 1 Waste generation by material category and destination for food product manufacturing in Australia

AC C

EP

Notes: The food product manufacturing sector generates 795,700 tonnes waste per year; waste generation averages 4,600kg/EFTE/year; the total organic waste generated in the sector was 2,920 kg/EFTE.yr., the organic waste going to landfill was 610 kg/EFTE.yr and to recycling was 2,310 kg/EFTE.yr . EFTE is employees full time equivalent (Encycle Consulting and Sustainable Resource Use, 2013).

With these staggering quantities of food waste, a golden opportunity exists for increased food consumption from food efficiency in food product manufacturing. 1.3

Resource efficiency and the True Cost of Waste within food manufacturing

An opportunity for business According to the United Nations Environment Programme (UNEP), under the division of Technology, Industry and Economics, resource efficiency and cleaner production are almost synonymous with the concept of eco-efficiency that was coined by the World Business Council for Sustainable Development – WBCSD2 in 1992. Resource efficiency considers that improving environmental efficiency of a process for instance will generate economic benefits for a company. While resource efficiency has evolved over time to capture a broad collation of data (material and energy inputs required within the whole value chain of the product or process: e.g. energy consumption of a cooling system), there exists barriers for its adoption 2

http://www.wbcsd.org/home.aspx, accessed in January 2016

DIRECT Journal Article

ACCEPTED MANUSCRIPT within organisations more broadly. Balancing competing demands within a for-profit organisation the main focus is upon getting product out the door. This introduces trade-offs that need to be taken into consideration, where in some instances, there is an accepted level of waste – the cost of doing business (Verghese et al., 2015). It can also provide less opportunity to survey, monitor, track and identify opportunities for more efficient practices.

SC

RI PT

Resource and energy efficiency Resource efficiency within the food industry also needs to consider the efficiency of the manufacturing processes involved in food transformation, and through the supply chain. This area has been and is still widely covered by research projects and not only in industrial countries. The 2015 United Nations Conference on Climate Change (Cop21 / CMP11 Paris, 2015) agreed on the necessity for industrialised countries to support emergent countries in developing clean and efficient industrial processes. This has been identified as a unanimous condition for achieving common reduction of CO2eq emissions in the following decades. The notion of resource efficiency in the food industry is also closely related to energy efficiency. For instance, material flows, such as water cooling systems in ovens, or issues with freezing and ventilation systems can result in food losses.

TE D

M AN U

Multiple causes, multiple savings A wide range of causal affects (Williams et al., 2012), efficiency issues (Garnett, 2014), and management concerns (Papargyropoulou et al., 2014) exist for wasted food in the manufacturing environment. As such, within Australia waste reduction work has been commissioned on a state basis. For example, one eco-efficiency program led a bakery participant, Priestley’s Gourmet Delights (DEEDI, 2010), to systematically review product lines to determine how, where and why waste occurred. Problem areas were incorrect stacking of product, dropping raw ingredients, and incorrect decorating procedure, where mitigating initiatives saved approximately $99,500 raw material costs over a year. In another case, a multi stakeholder partnership identified 28 opportunities for a food ingredients manufacturer, International Flavors & Fragrances, to save $34,000 per year through improved plant operation and energy/ water efficiency (EPA, 2010). Peerless Foods diverted 1,000 tonnes of annual waste from landfill, leading to economic savings, and value streams for agricultural sector convertors of organic waste (EPA, 2007). These examples demonstrate significant savings can occur through efficiency strategies.

AC C

EP

Resource efficiency support There are a range of formalised guides, worksheets and tools/calculators that have been developed to support food supply chain efficiency and waste reduction. An overview of some tools and their merit is provided in Table 1. Additionally Bygrave (2016) provides an extensive list of existing tools developed to support businesses to prevent food waste across supply chains.

ACCEPTED MANUSCRIPT DIRECT Journal Article

Table 1: Examples of resource efficiency and waste audit calculators and tools Description/ functionalities

Models (data)

The Institute of Grocery Distribution auditing process

Focuses on identifying the root cause of waste through Failure Mode & Effect Analysis (FM&EA). Process attempts to identify hot spots of commercial and industrial food waste that can then be systematically worked through to resolve. User friendly online interface; Identification of causality and costs Waste reduction toolkit and guide (for US originally)

Provides a process for waste reduction and a structure in identifying hotspots.

A generic waste auditing form with respect to solid waste, gas, electricity and water that tracks electricity, water and gas consumption across time.

Green Hospital Champion Fund Waste Audit Data Reporting Templates Ontario Hospital Association

Guide developed specifically for waste reduction in hospital

Source http://www.igd.com/index.asp ?id=1&fid=5&sid=43&tid=158 &foid=127(IGD, 2010)

SC

EP

Zero waste Scotland compositional analysis tool

M AN U

US EPA’s food waste cost management calculator

Captures waste generation data with report produced displaying the results of the audit Addresses costs only, and does not assist in waste auditing, or waste reduction aside from providing a generic reference list Excel worksheet; Method for calculating volume and mass of wastes, data to enter: - bin volume (litres) - percentage of fullness of the bin - material type within the bin; bulk density of the material (for the volume estimation) Waste reduction strategies against the specific wasted materials

Small business to self-audit

http://www.wasteaudittool.co m/

US food caterers

http://www.epa.gov/osw/cons erve/materials/organics/food/ tools/ http://smetraining.zerowastes cotland.org.uk/

TE D

Ireland waste audit guide

User target

RI PT

Name of the tool

http://www.oha.com/CurrentI ssues/Issues/Green%20Heal thcare/Documents/GHCF%2 0Waste%20Audit%20and%2 0Template%20Guide.pdf Notes: This table presents examples of tools and calculators that were reviewed in the early stages of the DIRECT project. We acknowledge that there may be other tools that have been developed since, though they are not represented in this table.

AC C

In hospital context through food services for patients

DIRECT Journal Article

ACCEPTED MANUSCRIPT An analysis of the tools presented in Table 1 found that no tool comprehensively combined audits, causality, financial costs and improvement measures and no tool expanded on reporting the environmental impacts of waste (i.e. greenhouse gas emissions). This provided an opportunity to develop a calculation tool that could address these gaps and led to the exploration of concepts such as the true cost of waste.

RI PT

Identifying the true cost of waste Manufacturers continue to undervalue waste and do not capture the true economic, social and environmental cost of waste (Collins, 2014). Due to the conservative scope of calculations relating largely to landfill, the real cost of waste is often overlooked (Lee and Willis, 2010): the cost of raw material; the loss of finished product; the loss of production costs both in raw materials and processing (including water and energy); labour costs; treatment costs; collection costs and disposal costs. What is also evident is that:

SC

“Information failures exist within many businesses, being unaware of the full financial and environmental benefits of producing less waste or disposing of it differently” (Parry et al. 2015, p 24).

M AN U

While waste disposal costs are generally a small proportion of overall business costs, they can go unnoticed. In 2011, the Waste and Resource Action Programme (WRAP) documented the lack of insight by UK businesses in the food and hospitality sector regarding the true cost of waste. Across nine hospitality and food service sectors3, the total costs of food waste generated was £2.5 billion per annum (Lee et al., 2013), with the resultant breakdown of these costs presented in (Figure 2). Raw materials (i.e., food purchases) that ultimately result as waste make up a considerable proportion of the indirect or true cost of waste, along with labour costs.

AC C

EP

TE D

Figure 2 Breakdown of the total cost of food waste (avoidable and unavoidable) in UK business in the food and hospitality sector in 2011 by cost centre

Source: (Lee et al., 2013, p 4).

Once there is visibility of waste and its causes, then manufacturers are able to manage it, though challenges still exist such as “having the necessary mechanisms in place to coordinate, support and monitor the delivery of food waste prevention programmes” (Parry et al., 2015, p 24).

3

Restaurants, quick service restaurants, pubs, hotels, leisure, staff catering, healthcare, education and services.

DIRECT Journal Article

ACCEPTED MANUSCRIPT Management of the disposal of food waste is just the tip of the iceberg. Achieving better outcomes for these waste contributions takes enormous organisational effort and management, as there are individual and relational aspects across all areas of the business to consider. How organisations may achieve a greater ability to identify the true cost of waste specifically relating to their business context is an important area of study. The elements required for such an understanding and resultant tool are further explored in the section below.

SC

RI PT

1.4 Co-design of industry tools Integrated tools in industry Increasing the accessibility of resources and tools to assist organisations in being more efficient is an issue paramount in addressing (Parry et al., 2015). However, they require careful integration, so as not to risk minimal uptake and irrelevance. The quality of this integration plays a major role on the effect they can provide in companies i.e. the quantity of waste avoided and the emergence of innovative solutions to avoid waste. Factors encouraging the integration of a tool or a method into industry can be found in the domain of ‘integrated design’ (Tichkiewitch and Brissaud, 2004). As presented by Riel et al (2010), some key targets of integrated design are:

M AN U

• The integration of the whole life cycle of a product or a system that enables calculation of objective resource efficiency results. • Involving the different stakeholders across a product life cycle who can be passive or active in processes across the product value chain. Stakeholders can also be internal and external (Clune and Lockrey, 2014) and can include: accounts or financial officers, general managers, production managers, marketers or consumers. Integrating stakeholders into the tool development process brings multi-perspectives on functional inclusions and omissions to drive food waste reductions (e.g., see Figure 3).

AC C

EP

TE D

• Integrating the different cultures of stakeholders to help them communicate together and understand each other’s perspectives. Workshops stimulate this knowledge sharing to converge to a shared vision of an appropriate tool for them. This can be particularly critical in the co-creation of value (Russell-Bennett et al., 2013), where outcomes are accepted by the participants as being shared decisions and not prescriptions by management. At this point, ‘co-ownership’ between stakeholders is achieved, heightening the value of the tool across and external to the organisation.

DIRECT Journal Article

ACCEPTED MANUSCRIPT

M AN U

Source: Adapted from (Verghese et al., 2012, p 393).

SC

RI PT

Figure 3 Examples of questions to ask when developing an industry tool

TE D

Tool co-development Tool co-development is also a technique typically used in software development under the Agile (Abbas et al., 2008, Inayat et al., 2015) terminology, or Spiral one (Boehm, 1988). These paradigms confer the advantages to be an adaptive method rather than a predictive one, as defined by the 12 principles of the Agile Manifesto4 methods that are based on users (collaborative development with stakeholders, feedbacks, etc.), and providing operational functionalities at each development added (Inayat et al., 2015). In research disciplines, processes that adapt and change temporally are inherently inductive (Forman et al., 2008).

AC C

EP

Co-designing resource efficiency tools in industry Creative and business disciplines see this manifest in co-design, or participatory design processes, where stakeholders from multiple disciplines shape an outcome over time. Participatory design views people participating in the process as the true experts in domains of experience such as living, learning and working (Sanders, 2008). Participation is also widely identified as important within sustainable development literature (e.g. Klauer, 1999), as “interaction among affected entities helps define the interrelationships of concern” (Born and Sonzogni, 1995, p.171). This can be practically facilitated in contexts where a tool developed reflects the systemic environment of organisations, reflected in characteristics such as: • Collaborative aspects: several stakeholders can be connected together, exchange information, issues or solutions, post opportunities, share success stories (Lofthouse, 2006). • Knowledge capitalisation and contextualisation: experiences from one industry can be applied to another (not necessarily from the same sector). Knowledge from each stakeholder is made explicit for others to build upon it (e.g., knowledge management tools for specific support developed in life cycle engineering (Bernard and Tichkiewitch, 2008)). • Design thinking aspects for processes, products, service, etc. (Clune and Lockrey, 2014).

4

Cf. the 12 principles of the Agile method in: http://agilemanifesto.org, accessed in November 2016

DIRECT Journal Article

ACCEPTED MANUSCRIPT

Case study methods

SC

2

RI PT

Finally, tool co-development that enables system competencies for stakeholders is a key driver for incremental as well as radical innovation, in particular for resource efficiency and cleaner production (RECP) systems. For instance, Riel et al (2015) demonstrates a teaching program competence for a sustainable company, and Clune and Lockrey (2014) discuss co-design of strategy in an aged care facility. An efficiency calculation tool should be linked to the related key parameters i.e. business costs (rent, electricity, gas, waste collection and treatment, etc.), and addressed to the person in charge of them i.e. account managers. An integrated and co-designed resource efficiency tool should also provide guidance for the user to find out how to gain resource efficiency using their own knowledge in collaboration with other relevant experts in the given context i.e. guidance on how to conduct a resource audit, using illustrations (enables explicit knowledge sharing), steps for a standardised procedure, etc. With these, aspects of a tool may allow stakeholders across the food supply chain to address feasible measures to improve the global efficiency of their organisation/s (Eksoz et al., 2014).

M AN U

DIRECT’s development employed a case study method, drawing on data deriving from the various food manufacturers and research partners involved in its design and use. A deep understanding of people and processes involved with the tool development was established, by a ‘triangulation’ of multiple quantitative and qualitative data from a number of project contexts (Woodside, 2010). The case study method made it possible to draw out trends within and across data to frame theoretical conclusions (Yin, 1992). Evidence included:

TE D

1. Self-reflection of the DIRECT tool development process (authors as actors in the project) in regard to direct observations (including participant observations and notes taken during the development) as embedded project members. This brought an ethnographic dimension to the research strategy (Gray, 2004), a complimentary technique to case study research. 2. Correspondence (documents and archival records) prior, during and following DIRECT’s development between the authors and project stakeholders.

EP

3. Project material from prior, during and following DIRECT’s development, such as company specific waste audits, company specific DIRECT results, DIRECT case reports, articles, and presentations.

AC C

Following the founding of the case study data set from multiple sources of evidence (1-3), theory building was conducted (Eisenhardt, 1989) with this chain of evidence, establishing explicit links between the research aim (i.e. revealing the value of a process of co-designed efficiency tool and outcomes), the data, and then conclusions were drawn (Yin, 2003). Mixed data comparison provided an adequate level of analysis in order to confirm the validity of results derived from the data analysis. For instance, data from one company was often further examined by comparison to complementary data in another context. Relevant data were evaluated extensively, to develop deep meaning as to the value of co-design in tool development with food manufacturing stakeholders. The data were not selected in an attempt to be representative or generalizable across relevant populations, as quantitative methods attempt to do. A qualitative and descriptive analysis identifying and summarizing key themes was used to draw out deeper meaning as argued by MacInnis (2011). This was in order to achieve a high level of complexity (Woodside, 2010) in explaining the stakeholders engaged and processes involved in co-designing DIRECT. We investigated many complex explanations of what transpired, and thus described what became evident. This case study research strategy investigated the DIRECT tool development process with

DIRECT Journal Article

ACCEPTED MANUSCRIPT

RI PT

an inductive approach. Induction is well suited to exploring social contexts, so as not to limit access to diverse and potentially important insights that needed to be uncovered. Induction allowed for research iteration. As such, the research was redirected toward emerging phenomena that provided answers to the research question (Forman et al., 2008) of ‘how to develop a resource efficiency tool for and with industry’. As alternative explanations of organisational concepts of waste and efficiency were uncovered, induction allowed for research refinement when insights become apparent, rather than a singular focus preventing a shift in the research. Results of this inductive approach are presented in the following sections through the sequential stages (Figure 4) undertaken in the process of DIRECT’s codevelopment. Figure 4: Main stages in DIRECT’s co-development

3 3.1

First stakeholder workshop

Alpha version of DIRECT

Case studies (alpha testing)

Second stakeholder workshop

Beta version of DIRECT

SC

Site visits and waste audits

Launch (beta version) of DIRECT

M AN U

Engagement with food manufacturers

Results – The co-development of DIRECT Engagement with food manufacturers

EP

TE D

The Dynamic Industry Resource Efficiency Calculation Tool - DIRECT was developed over a two year timeframe (2012-14) utilising co-design methods between the research team and food manufacturers. The project was undertaken by the Centre for Design at RMIT University, Melbourne and delivered through the Plenty Food Group (PFG) with funding from the State environment department - Sustainability Victoria’s Beyond Waste Fund. The PFG is a food manufacturing industry network for companies based in Melbourne's north, entirely focused to assist small, medium and large companies in food processing, or supplying products or services to the food manufacturing industry. The group is supported by the City of Whittlesea and Hume City Council. There are over 160 food manufacturers varying in size and type, producing a range of product for the retail, food service and hospitality industries both locally and internationally.

AC C

The project was initially designed with a focus around quantifying and identifying the causality of food waste within food manufacturing operations. As will be explained, the scope expanded to include other resources (e.g., energy and water), along with the importance of tracking and understanding the true cost of waste (Lee et al., 2013). The project was designed to be participatory and collaborative, to encourage ownership of the program and also buy-in. This has been a successful method in previous research undertaken by the team (James et al., 2001, Verghese et al., 2010, Clune and Lockrey, 2014). Engagement of the participating organisations occurred through a number of avenues. The key driver and champion of the project was the PFG Executive Officer, Marshall Dwyer, who was critical in the success of the project. He recruited thirty (30) companies through a combination of email communication and personal conversations (e.g., with Managing Directors, Procurement Managers and Production Managers). PFG compiled a target list of potential participating companies, concentrating on engaging with a variety of food industry types and company sizes. This was strategically important to provide a broad base of information for the project and to make the tool universally versatile to all food manufacturers.

DIRECT Journal Article

ACCEPTED MANUSCRIPT

3.2

RI PT

Participation was voluntary and there was no direct funding required from the organisations. However, there was an implied in-kind contribution through providing an opportunity for the research team to have access to their manufacturing site to observe operations and to discuss where waste occurs, identify the reasons for the waste and to collect resource flow information and business costs. For those companies who were interested, there was also the opportunity to further "road test" the Alpha version of the DIRECT tool. This involved a couple of hours whereby the key contact within the organisation sat with a member of the research team and worked through entering data directly into DIRECT. This provided valuable insight for both parties to discuss the ease and flexibility of the Alpha version of DIRECT and to highlight areas for improvement or refinement (see Section 3.5). Site visits and waste audits

M AN U

SC

Twenty (20) site visits (and in some instances waste audits) to food manufacturers, covering bakery, confectionary, food processing, pasta and cereals, beverages, fresh fruit and vegetables, were undertaken between November 2012 and May 2013. The site visits provided the research team with a first-hand view into the manufacturing/processing operations, ingredient storage and packaging, warehousing and waste management practices undertaken on site. It also enabled the team to talk with representatives of the food manufacturers gaining insight into the different types of waste generated, the quantities, where food waste occurs and the causality of the waste. Where approval was provided, photographs were taken of the waste and recycling bins (Photo 1), of the different waste fractions and of packaging materials and formats used on inbound ingredients and for outbound product. Information on electricity, gas and water consumption was also collected. This enabled the research team to gain a better overview of operations which also provided insights into the features and data collection required to be built into the DIRECT tool.

AC C

EP

TE D

Photo 1: Examples of food and packaging waste from site visits

Insights from the site visits included: • Some seasonality in generation volumes but consistency in percentage compositions of waste fractions • Generally production was the main source of waste • There was an awareness of wastage of resources through the production operations • For some, waste volumes were too small to have viable alternative systems • There was a general desire to implement sophisticated resource efficient procedures. A variety of opportunities were also identified during the site visits (Table 2).

DIRECT Journal Article

ACCEPTED MANUSCRIPT Table 2: Selection of opportunities identified through site visits • •

RI PT

•

Pipes contain remaining products that need to be cleaned each day with water. Opportunity: use compressed air to push product back through the pipes before watering them. A die needed to be changed for a product profile and as such the edge waste went from 5 mm to 30 mm resulting in rework and loss of efficiency. Opportunity: install new capital equipment. A non-material waste project opportunity to purchase more efficient capital equipment, energy efficiency measures, etc. The boilers/ovens (more insulation), and afterburner management (burning 18,000 MJ of gas per hour in EPA directive), heat could be diverted for process heat, space heating, waste drying, etc.).

3.3

First stakeholder workshop

M AN U

SC

The site visits and waste audits provided representatives from the participating food manufacturers the opportunity to “step back” and look at their practices and operations in conjunction with the research team. It also enabled the research team to ask questions to delve deeper into why certain operations, activities and practices occur and to discover opportunities for efficiency. For example, the initial focus of the site visits was on food waste, but this was broadened to include other resources (e.g., electricity, gas and water) leading to a resource efficiency focus because of the business opportunities that were identified during the site visits.

TE D

Two stakeholder workshops were held during the course of the project (see also Section 3.6) providing an opportunity for representatives from the food manufacturers to learn more about the DIRECT project and to provide feedback and input into its development. The research team was able to interact with the food manufacturers outside of the manufacturing environment and to share with participants the insights that were being gained through DIRECT’s development.

EP

General insights from the site visits and waste audits were presented in the first workshop (March 2013). Small group discussions covered topics such as successful waste reduction projects; challenges and barriers associated with understanding where, how much and why waste occurs within operations; and functionalities and features that would be ideal to include in the industry tool being developed. Feedback received from workshop participants showed a level of interest around a tool that could be used to better understand waste and resource efficiency, such as:

AC C

• Evaluate the resource loss per year, especially on a financial basis (i.e. a calculation module) • Allow sharing good practices between industries • Provide a forum between users, for instance about resources that they could trade/swap; and could help industries mutualising the transport of resources when industries are in the same industrial area (e.g. of industrial ecology opportunities (Almeida et al., 2014)) • Be quick, useful and easy to use • Present outputs in a new and informative way (i.e., bring something new) • Be clear and specific for the user • Provide a description of how to undertake a site waste assessment and resource audit including where to find key data within an organisation (e,g., invoice). This feedback was considered in the subsequent stages of DIRECT’s development.

DIRECT Journal Article

ACCEPTED MANUSCRIPT 3.4

Alpha version of DIRECT

AC C

EP

TE D

M AN U

SC

RI PT

Following the site visits and first stakeholder workshop, an Alpha version of DIRECT was designed in MS Excel, thus forming the calculation module. The key data inputs (process inputs, process outputs and business costs) are entered into DIRECT and three reporting outputs are generated (Figure 5). The pie chart presents the estimated true cost of waste, while the bar charts present the key production ratios and key financial indicators.

DIRECT Journal Article

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

Figure 5 Data inputs and ‘example’ outputs from DIRECT

DIRECT Journal Article

ACCEPTED MANUSCRIPT 3.5

Case studies to refine DIRECT (Alpha testing)

Five food manufacturers participated in the ‘Alpha testing’ phase for DIRECT (JanuaryMarch 2014). The five case studies5 ensured that DIRECT contained necessary features (e.g. supporting resource losses evaluation per year; being quick, useful and easy to use; being clear and specific to the user; presenting outputs in a new and informative way). Feedback focused upon data entry and tool support, proposed users, consolidating data entry time and how the tool could be used within the organisation. Table 3 presents reflections of the feedback from the research team.

• • • User of the tool

•

Time for data entry

•

Using the tool

•

TE D

• •

Data can be gleaned from a combination of physical and digital records such as mass of product and waste, resource use, and business costs Digital records include entries in MYOB, Enterprise Resource Management software (ERP), e.g., SAP, and custom computer databases Physical records include waste management, electricity, gas and water bills, purchase orders for stock, inventory records Sometimes calculations, extrapolations or averages need to be used, when all data in range required is not available. The best gate keeper is often the accounts or financial officer. This representative may need to liaise with a general manager, production manager, particularly about production waste data; however most of the records required often reside with this person or department. Reviews of data have lasted between half an hour to two hours, depending upon the combination of data sources, or organisation of the data storage. It is usually no more than an hour. Physically visiting the companies to explain the process has been crucial, to communicate the value of the tool, and how to use it There is a need for adequate training and help initially for users Important to include an explanation of the process on how to conduct a resource audit and use the calculation module

SC

•

M AN U

Data and support

RI PT

Table 3 Reflections of feedback received from Alpha testing of DIRECT

The following are two examples of specific responses provided by Alpha testers, illustrating the diversity of impact:

AC C

EP

• “The development of DIRECT could provide us with the opportunity to involve production managers in using the tool for benchmarking and education, while empowering them to reduce hot spots of waste to potentially incentivise changes”. • “Ratios given by DIRECT are good indicators of efficiencies in the food production system”. The feedback was incorporated into the Beta version of the calculation module of DIRECT (see Section 3.7) and for material presented at the second stakeholder workshop (see Section 3.6). 3.6

Second stakeholder workshop

The second stakeholder workshop (March 2014) involved the presentation of the Alpha version of DIRECT, discussion on resource efficiency more broadly in the sector, and the ‘true cost of waste’ concept. Additional feedback was gathered on the functionalities of DIRECT which included the online web presence that was eventually deployed (http://directool.com.au/).

5

http://directool.com.au/?page_id=1397

DIRECT Journal Article

ACCEPTED MANUSCRIPT 3.7

Beta version of DIRECT

RI PT

Combining insights gained from the site visits, case studies and stakeholder workshops, along with reviews of the literature, the interface of DIRECT as an MS Excel spreadsheet was completed. Co-designing with procurement, production, environment and finance departments was critical to understanding the practicalities of data collection but also the key information that would be beneficial for the organisations. As previously described, organisations typical record waste and dispose of it, however, limited time is spent understanding the dynamics and causality of the waste and its true cost. For instance, a component of human resources (labour) is spent dealing with the management of the waste, though there is rarely a direct calculation made as to the "lost" time spent dealing with this waste, compared with time spent towards the final product.

SC

The Beta version of DIRECT (tracking material and energy inputs/ outputs, waste streams, and associated business costs) was launched in late June 2014. It included a ‘tool-kit’ comprising the method (DIRECT process, site assessment method), a calculation module (true cost of waste, opportunities framework), and an information hub (resources, forum, case studies) (Figure 6) hosted on a web platform (www.directool.com.au).

TE D

M AN U

Figure 6 Screenshot of DIRECT web presence and key stages

4

Discussion

EP

Users also have the ability to identify ‘hot spots’ or areas for improvement and can record the reasons (causality) of why waste occurs. Processes and systems can be reviewed, benchmarked and improved over time so that the organisation can be more resource efficient.

AC C

The site visits were an essential component of the project and enriched the development of DIRECT providing the following insights: • What food manufacturers need from an audit tool (used for the specification of the tool that added value to their business) • The difficulties encountered by food manufacturers to undertake their own self audit (including additional tips on how to perform an audit) • The type of processes and infrastructure in the food manufacturing industry: e.g., supply chains, retailers, packaging lines, processes involved, types of machines, technologies (used to develop the tool database), creating opportunities for business innovation (Mohezar and Nor, 2014) • The types of material (food ingredient) and packaging inputs and outputs: e.g., material and energy flows in the food sector (used to develop the tool database) • Common issues faced by food manufacturers (used to develop the tool functions and tips based on literature results and previous experience, for instance in the packaging and manufacturing field) • Success stories used as tips in the tool to illustrate some solutions that can be shared

DIRECT Journal Article

ACCEPTED MANUSCRIPT with all companies.

RI PT

Difficulties however, were encountered in conducting site visits and collecting waste audit data. The scheduling of some site visits was made somewhat challenging when coinciding with peak manufacturing periods. Participating companies found it difficult to allocate resources, outside of core business activities, to compile the requested waste audit data. Most organisations were small and medium enterprises (SMEs) and therefore had limited staff. Challenges experienced in data collection from the waste audits provided rich insights that feed into DIRECT’s development – that it be easy, intuitive, and focused on core data collection. The benefits that manufacturers can gain by using DIRECT include: Better understanding the true cost of waste How to conduct resource efficiency assessments How to identify and calculate resource efficiency The business value of improving resource efficiency.

SC

• • • •

M AN U

Finally, these insights emerged from one case study in tracking food waste, in order to explain the critical aspects of the co-design of DIRECT. This derived from a need to describe what was occurring in a specific context, and then to identify theoretical insights present within the practice of co-design (Eisenhardt, 1989) as we’ve discussed above. For this reason, insights from our study are not generalizable across organisations, industries or populations. Even so, patterns emerged across organisations examined which may indeed be general, particularly around issues of critical personnel and data access. It will now be the task of new research and an opportunity for scholars to assess if those insights are applicable generally across organisations and industries dealing with food waste, or in other organisational contexts. Future developments

TE D

5

EP

The next evolution of the tool not only allows manufacturers to calculate the true cost of waste, but to have a resource that can identify possible solutions/opportunities they can utilise to avoid landfill (Garrone et al., 2014), create better resource efficiencies (based on appropriate calculation module indicators (Bjørn and Hauschild, 2012)), and link to opportunities within their community through general knowledge, networks, online links (e.g. to existing models for specific calculations (Giuseppe et al., 2014)), forums and data entry/analysis.

AC C

The DIRECT methodology has subsequently been employed in a new research project with a top 100 private Australian supply chain organisation and their customers6. This project focuses primarily on the quantity and reasons for food waste generated with the ultimate objective of optimizing food efficiency in the supply chain of the participating customers. There are also opportunities to expand DIRECT into a fully integrated online tool linked to business systems and global protocols (Figure 7). Utilising whole supply chain dynamic realtime data based on, or extending existing mapping method (Brown et al., 2014) and future scenario building with market strategic analysis and competencies, are areas that the research team continue to explore including critical success factors (Grimma et al., 2014).

6

http://www.dlabresearch.com.au/projects/food-supply-chain-resource-efficiency-and-true-cost-of-waste/

DIRECT Journal Article

ACCEPTED MANUSCRIPT

RI PT

Figure 7 Example opportunities to expand DIRECT

M AN U

SC

The DIRECT project and resultant tool has demonstrated the benefits of early and continual engagement and participation with end users. Collaborations and partnerships within organisations and across supply chains, such as that of the DIRECT co-designed development, provide a unique opportunity for greater efficiency, as announced previously by Henningsson et al (2004). For instance, business oriented value, such as relevant efficiency measures, was added to DIRECT as input from industry. With further research, there is an opportunity to gain more insights as to the effect DIRECT may have in supporting industrial efficiency. This goes beyond our contribution detailing how tool development adds value to organisations. The next step is whether practical outcomes by way of such a resource helps in organisations addressing food sustainability issues, problems that will only get more acute in the future.

EP

References

TE D

Acknowledgements This project was funded through the Beyond Waste Fund, part of Sustainability Victoria7, Government of Victoria. We would also like to thank; participating food manufacturers; Plenty Food Group; those who attended workshops and seminars; and Faye Aforozis (City of Whittlesea) and Dr. Stephen Clune (whilst he was at RMIT University), who both developed the funding application and proposal for the DIRECT project.

AC C

ABBAS, N., GRAVELL, A. M. & WILLS, G. B. Historical roots of Agile methods: where did “Agile thinking” come from? International Conference on Agile Processes and Extreme Programming in Software Engineering, June 2008 Berlin Heidelberg. Springer 94-103. ACT PARLIMENTARY COUNSEL 1997. Environmental Protection Act. no. 92 of 1997. ALMEIDA, J., ACHTEN, W. M. J., VERBIST, B., HEUTS, R. F., SCHREVENS, E. & MUYS, B. 2014. Carbon and Water Footprints and Energy Use of Greenhouse Tomato Production in Northern Italy. Journal of Industrial Ecology, 18, 898-908. BERNARD, A. & TICHKIEWITCH, S. (eds.) 2008. Methods and tools for effective knowledge lifecycle-management, Berlin: Springer. BJØRN, A. & HAUSCHILD, M. Z. 2012. Absolute versus Relative Environmental Sustainability. What can the Cradle-to-Cradle and Eco-efficiency concepts Learn from Each Other? Journal of Industrial Ecology, 17, 321-332. BOEHM, B. W. 1988. Spiral model of software development and enhancement IEEE International Symposium on Electronics and the Environment, 21, 61-72. BORN, S. & SONZOGNI, W. 1995. Integrated environmental management: strengthening the conceptualization. Environmental Management, 19, 167-181. BROWN, A., AMUNDSON, J. & BADURDEEN, F. 2014. Sustainable value stream mapping (SusVSM) in different manufacturing system configurations: application case studies. Journal of 7

http://www.sustainability.vic.gov.au/services-and-advice/business/energy-and-materials-efficiency-for-business/casestudies/food-processing-and-storage-case-studies/direct-tool

DIRECT Journal Article

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

Cleaner Production, 85, 164-179. BSR 2013. Analysis of U.S. Food Waste Among Food Manufacturers, Retailers and Wholesalers. Prepared for the Food Wasre Reduction Alliance. New York: BSR. BYGRAVE, K. 2016. Inventory of business change tools. Guidance and tools to support business change. D2.5 - Final. Deliverable Report. EU Horizon 2020 REFRESH. UK: WRAP. CLUNE, S. & LOCKREY, S. 2014. Developing environmental sustainability strategies, the Double Diamong method of LCA and design thinking: a case study from aged care. Journal of Cleaner Production, 85, 67-82. COLLINS, R. 2014. Efficiency program uncovers hidden cost of waste. DEEDI 2010. Reusing solid waste and product recovery. Eco-efficiency resources for the food processing industry. In: DEPARTMENT OF EMPLOYMENT, E. D. A. I. (ed.). Brisbane: Queensland Government. EISENHARDT, K. M. 1989. Building Theories from Case Study Research. The Academy of Management Review, 14, 532-550. EKSOZ, C., AFSHIN MANSOURI, S. & BOURLAKIS, M. 2014. Collaborative forecasting in the food supply chain: A conceptual framework. Int. J. Producuction Economics, 158, 120-135. ENCYCLE CONSULTING & SUSTAINABLE RESOURCE USE 2013. A study into commercial & industrial (C&I) waste and recycling in Australia by industry division. Canberra: Report prepared for the Department of Sustainability, Environment, Water, Population and Communities. EPA 2007. Project Outcome: Peerless Foods. Melbourne: Environment Protection Authority. EPA 2010. INTERNATIONAL FLAVORS AND FRAGRANCES: Efficient Food Ingredients. Melbourne: Environment Protection Authority. FORMAN, J., CRESWELL, J. W., DAMSCHRODER, L., KOWALSKI, C. P. & KREIN, S. L. 2008. Qualitative research methods: Key features and insights gained from use in infection prevention research. American Journal of Infection Control, 36, 764-771. GARNETT, T. 2014. Three perspectives on sustainable food security: efficiency, demand restraint, food system transformation. What role for life cycle assessment? Journal of Cleaner Production, 73 10-18. GARRONE, P., MELACINI, M. & PEREGO, A. 2014. Opening the black box of food waste reduction. Food Policy, 46, 129-139. GIUSEPPE, A., MARIO, E. & CINZIA, M. 2014. Economic benefits from food recovery at the retail stage: An application to Italian food chains. Waste Management, 34, 1306-1316. GRAY, D. 2004. Doing Research in the Real World, London, SAGE Publications. GRIMMA, J. H., HOFSTETTER, J. S. & SARKIS, J. 2014. Critical factors for sub-supplier management: A sustianable food supply chain perspective. Int. J. Producuction Economics, 152, 159-173. GUNDERS, D. 2012. Wasted: How America Is Losing Up to 40 Percent of Its Food from Farm to Fork to Landfill, New York, Natural Resources Defense Council. GUSTAVSSON, J., CEDERBERG, C. & SONESSON, U. 2011. Global food losses and food waste: extent, causes and prevention. Rome: Report by the Swedish Institute for Food and Biotechnology for the Food and Agriculture Organization of the United Nations. IGD. 2010. Supply Chain Waste Prevention [Online]. Watford: Institute of Grocery Distribution and IGD Services Limited. Available: http://www.igd.com/index.asp?id=1&fid=5&sid=43&tid=158&foid=127 [Accessed 19/04/2011 2011]. INAYAT, I., SALIM, S. S., MARCZAK, S., DANEVA, M. & SHAMSHIRBAND, S. 2015. A systematic literature review on agile requirements engineering practices and challenges. Computers in human behavior, 51, 915-929. JAMES, K., GRANT, T. & SONNEVELD, K. 2001. Stakeholder involvement in Australian paper and packaging waste management LCA study. The International Journal of Life Cycle Assessment, 7, 151-157. KLAUER, B. 1999. Defining and achieving sustainable development. International Journal of Sustainable Development and World Ecology, 6, 114-121. LEE, P., PARFITT, J. & FRYER, A. 2013. The True Cost of Food Waste within Hospitality and Food Service. Quantification of the true cost of food waste in the UK's Hospitality and food Service sector. UK: Waste and Resource Action Programme (WRAP). LEE, P. & WILLIS, P. 2010. Waste arisings in the supply of food and drink to households in the UK. Oxon, UK: Waste and Resource Action Programme (WRAP). LOFTHOUSE, V. 2006. Ecodesign tools for designers: defining the requirements. Journal of Cleaner

DIRECT Journal Article

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

Production, 14, 1386-1395. MACINNIS, D. J. 2011. A Framework for Conceptual Contributions in Marketing. Journal of Marketing, 75 (136 -154. MOHEZAR, S. & NOR, M. N. M. 2014. Could supply chain technology improve food operators' innovativeness? A developing country's perspective. Trends in Food Science and Technology, 38, 75-82. NSW GOVERNMENT 1997. Protection of the Environment Operations Act In: NSW GOVERNMENT (ed.) 1997 No 156. PAPARGYROPOULOU, E., LOZANO, R., STEINBERGER, J. K., WRIGHT, N. & BIN UJANG, Z. 2014. The food waste hierarchy as a framework for the management of food surplus and food waste. Journal of Cleaner Production, 76 106-115. PARFITT, J., BARTHEL, M. & MACNAUGHTON, S. 2010. Food waste within food supply chains: quantification and potential for change to 2050. Phil. Trans. R. Soc, 365, 3065-3081. PARRY, A., JAMES, K. & LEROUX, S. 2015. Strategies to achieve economic and environmental gains by reducing food waste. Banbury: WRAP. RIEL, A., LELAH, A., MANDIL, G., RIO, M., TICHKIEWITCH, S., ZHANG, F. & ZWOLINSKI, P. 2015. An Innovative Approach to Teaching Sustainable Design and Management. Procedia CIRP, 36, 29-34. RIEL, A., TICHKIEWITCH, S. & MESSNARZ, R. 2010. Qualification and certification for the competitive edge in integrated design. CIRP Journal of Manufacturing Science and Technology, 2, , 279-289. RUSSELL-BENNETT, R., WOOD, M. & PREVITE, J. 2013. Fresh ideas: Services thinking for social marketing. Journal of Social Marketing, 3, 223-238. SANDERS, L. 2008. An Evolving Map of Design Practice and Design Research. Interactions. TICHKIEWITCH, S. & BRISSAUD, D. (eds.) 2004. Methods and Tools for Co-operative and Integrated Design: Springer Netherlands. VERGHESE, K., HORNE, R. & CARRE, A. 2010. PIQET: The design and development of an online 'streamlined' LCA tool for sustainable packaging design decision support. International Journal Of Life Cycle Assessment, 15, 608-620. VERGHESE, K., LEWIS, H., LOCKREY, S. & WILLIAMS, H. 2015. Packaging's Role in Minimizing Food Loss and Waste Across the Supply Chain. Packaging Technology and Science, 28, 603-620. VERGHESE, K., LOCKREY, S., CLUNE, S. & SIVARAMAN, D. 2012. Life cycle assessment (LCA) of food and beverage packaging. In: YAM, L. (ed.) Emerging Food Packaging Technologies: Principles and Practice. London, UK: Woodhead Publishers. VICTORIAN EPA 1970. Environment Protection Act 1970. In: DOCUMENTS, V. L. A. P. (ed.) 8056/1970 Version No. 180. WILLIAMS, H., WIKSTRÖM, F., OTTERBRING, T., LÖFGREN, M. & GUSTAFSSON, A. 2012. Reasons for household food waste with special attention to packaging. Journal of Cleaner Production, 24, 141-148. WOODSIDE, A. G. 2010. Case Study Research: Theory, Methods, Practice, Emerald Group Pub Ltd. WRI, CGF, FAO, EU-FUNDED FUSIONS PROJECT, UNEP, WRAP & WBCSD 2016. Food Loss and Waste Accounting and Reporting Standard. Version 1.0. Washington: World Resources Institute (WRI), The Consumer Goods Forum (CGF), Food and Agriculutre Organisation of the United Nations (FAO), EU-funded FUSIONS project, United Nations Environment Programme (UNEP), The Waste and Resources Action Programme (WRAP), World Business Council for Sustainable Development (WBCSD). YIN, R. 2003. Case Study Research: Design and Methods, Sage Publications. YIN, R. K. 1992. The Case Study Method as a Tool for Evaluation. Current Sociology, 40, 121-137.