Ineffective or unsophisticated product management processes and procedures lead to wasted food across the supply chain – for example, more than 14% of unsold food at the retail level in 2021 was due to handling errors. The costs that result from it are generally borne by the businesses causing the waste – except when they are pushed downstream to other stakeholders, including consumers in the form of higher prices. And better management of product can also help extend its freshness and usability for those downstream recipients.
"Refining product management" means aligning purchases with sales as closely as possible, and when surplus arises, finding secondary outlets to accommodate it. It also means building out systems and processes for optimal on-site handling. Solutions in this action area employ tactics that simplify inventory management – such as dynamic pricing with artificial intelligence (to improve use of products in stock) and software that enhances future demand planning (to ensure that future product orders won’t lead to excess supply and waste). Product management solutions also include diversifying product outlets in case excess arises, establishing markets for last-minute products through alternative sales channels, and innovative new approaches such as markdown alert apps.
Refining product management should result in less over-purchasing, directly saving those businesses that implement solutions in this action area. As such, Corporate Finance and Spending can cover nearly two-thirds of the funding related to adopting solutions (paying solution providers) or developing internal capabilities. The next largest component comes from Venture Capital, which can fund continued innovation.