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Opportunities to Improve Environmental and Economic Performance in the Food Chain – Lean Thinking, Continuous Improvement and Benchmarking - FO0425

Description
The UK food chain contributes significantly to the national economy but has considerable environmental impacts including emissions to air and water of greenhouse gases and other pollutants, use of water and natural resources, and waste generation. Scope exists to tackle these negative impacts by improving resource efficiency, competitiveness and environmental performance across the food chain.

Some research has already examined opportunities to reduce the impacts of agricultural commodities to the farm gate through improved agricultural production techniques and changing diets. However, less is known about technologies and practices which may reduce the environmental impacts in the food chain, notably Lean production techniques. For the purposes of this research the food chain is post-farm gate and includes the manufacture, distribution, retail and foodservices sectors.

This research project, proposed by the consultancy firm Oakdene Hollins in response to a Defra Invitation to Tender under Competition Code FFG 1106, seeks to address this evidence gap by answering the following questions:

1) What benchmarking and auditing tools are available to assess resource use efficiency and environmental performance in the food chain? What are the available options for improvement (technologies, practices) and what is their cost-effectiveness? The research will focus on hotspots in the food chain, and use lifecycle thinking for appraisal of options.

2) What is the current rate of uptake of tools for assessing and improving performance and what are the barriers and drivers to uptake? What are the typical savings, benefits and costs that can be obtained through their use? What does this mean in terms of potential to reduce negative impacts and improve efficiency of the food chain?

The work, to be informed by a Project Steering Group, will be undertaken in three distinct phases:

Phase 1: Impacts and hot spots in the food chain - and any evidence gaps - will be mapped through an exhaustive review of published and grey literature, and through engagement with relevant experts. Recommendations for addressing these impacts and hotspots will be made. In addition, a short list of relevant case studies to be produced in Phase 2 will be proposed.

Phase 2: A series of case studies, agreed by the Steering Group, will be produced addressing key evidence gaps in current practices and uptake of tools and technologies. Importantly, any drivers and barriers to the further adoption of these tools and technologies will also be considered in the case studies.

Phase 3: The data collected in the first two phases will be used to develop more refined assessments of the opportunities for reducing impacts and improving performance, their costs and benefits, and options for promoting their uptake. An Excel-based modelling tool will be developed enabling users to assess the cumulative effects of different levels of uptake of multiple options. Quantitative outputs for the model will be provided for the UK and also at country level. A Guidance Document will be drafted to accompany the tool.

Deliverables for the project, due to run from 15 June 2011 to 31 March 2013, will be:

a) A formal annual report
b) A final report
c) Short quarterly written updates
d) 6 Case Studies
e) Excel-based Model
Objective
7. (b) Objectives

Introduction

The UK’s food chain is responsible for significant impacts on the environment, encompassing a range of impacts including greenhouse gas emissions, other emissions to air and water, exploitation of water and natural resources, and waste arisings. A considerable volume of evidence has been already published or is available in a number of these areas. For example the UK food chain is responsible for over 20% of UK GHG emissions and at least 6.5 Mt of waste (excluding agriculture). There is however a need to draw together and quantitatively analyse the practices, tools, barriers and drivers that have the potential to improve resource efficiency, competitiveness and environmental performance in the food chain.

Previous research by Oakdene Hollins and others suggests that Lean Manufacturing approaches to achieving resource efficiency, if fully implemented, have greater potential to drive change within a company than approaches such as environmental management systems (EMS). This is because Lean techniques are aimed at corporate level and changing the culture of the organisation. By contrast, EMS tend to be driven by the environmental manager who has less influence on a company’s procurement and processes, focusing instead on reducing ‘end-of-pipe’ impacts and ensuring regulatory compliance. Recent evidence from Boston Consulting Group for the sector show that, although Lean Manufacturing has ensured some changes, for most companies the effects have been relatively modest.

This research proposal from Oakdene Hollins is in response to Defra’s Invitation to Tender under Competition Code FFG 1106. This research will gather evidence on technologies, practices and tools which may reduce the environmental impact and improve the resource efficiency and competitiveness of the food chain. Furthermore, it seeks to understand and quantify the marginal and cumulative effects of multiple interventions on abating environmental impacts from the food chain. This research is part of Defra’s Resource Efficient and Resilient Food Chain R&D Programme – itself part of the November 2010 Defra Business Plan.

The following specific research questions will be addressed:
1. (i) What benchmarking and auditing tools are available to assess RE in the food chain?
(ii) What are the available options for improvement (technologies, practices) and their cost-effectiveness?

2. (i) What is the current uptake of tools and what are the barriers and drivers to uptake?
(ii) What are the typical savings, benefits and costs that can be obtained through their use?
(iii) What does this mean for the potential to reduce negative impacts and improve efficiency in the food chain?

Scope

The scope of this research is the environmental and economic performance of the UK food and drink supply chain. Figure 1 illustrates each of the different stages of the food chain and gives the proposed boundaries of the research, based upon a successful project that Oakdene Hollins conducted for WRAP on waste in the UK Food and Drink Supply Chain. For the purposes of this proposal we would include those post-farm gate components of the bounded by the dotted line.

Four key stages are included within the proposed scope for this research:
• manufacture (represented as product manufacture and product filling)
• distribution (shown as product storage)
• retail
• foodservice, catering and hospitality.

The research would therefore build upon that previous study by further analysing the environmental and economic impacts of food and drink supply chain. Foodservice, catering and hospitality are included as an additional stage of the supply chain with the purpose of including and building on ongoing Defra- and WRAP-funded activities in the sector.

In line with that research and because of the considerable research that has already been conducted on options to reduce the impacts of the supply of agricultural commodities, production to the farm gate has been excluded from the proposed scope. Similarly raw material extraction, packaging manufacture and households are also excluded in the proposed research scope.
Figure 1: Proposed scope and boundaries of the research

Source: Adapted from Oakdene Hollins (2010) Waste arisings in the supply of food and drink to households in the UK. WRAP.


Research Phases & Objectives

The research will be undertaken in three distinct phases:

Phase 1: Literature review & expert engagement (June 2011 – September 2011)
Phase 1 will map impacts, hot spots and tools in the food chain. Data will be gathered though an exhaustive review of published and grey literature, and by engagement with relevant experts. Any evidence gaps will be identified. The specific objectives of Phase 1 are:
• Objective 1a: Review and synthesise existing literature to map impacts, hotspots and tools
• Objective 1b: Identify evidence gaps and make recommendations on how to fill them
• Objective 1c: Produce a short list of potential case studies for Phase 2.

Phase 2: Further analysis & case studies (October 2011 – May 2012)
Phase 2 will conduct further analysis to fill the evidence gaps identified in Phase 1 and to investigate drivers and barriers to the further adoption of tools and technologies. A number of specific tasks and approaches are proposed, the implementation of which will depend on the availability and quality of the evidence collated within Phase 1. With the agreement of the Steering Group and Defra a series of case studies will be researched and conducted. The specific objectives of Phase 1 are:
• Objective 2a: Address key evidence gaps in current practices and uptake of tools and technologies
• Objective 2b: Identify drivers and barriers to improving environmental and economic performance
• Objective 2c: Conduct case studies of environmental and economic performance in the food chain.

Phase 3: Develop modelling tool (April 2012 – January 2013)
Phase 3 will utilise the data collected to develop refined assessments of the opportunities for reducing impacts and improving performance, their costs and benefits, and options for promoting their uptake. A computer-based modelling tool will be developed enabling users to assess the cumulative effects of different levels of uptake of multiple options and to assess the impact of each tool on each of the hotpots identified in the earlier phases. A Guidance Document will accompany the tool.
• Objective 3a: Develop modelling tool to simulate the effect of options to improve current practices
• Objective 3b: Provide guidance on the application of the modelling tool.


Project Documents
• EVID4 - Final project report : FO0425 phase 2 Lean report - EVID4   (799k)
• EVID4 - Final project report : Hospitality research report EVID4 FO0425   (2414k)
• TRP - Technical Report : Hospitality research report technical annex - DEFRA FO0425   (5621k)
• TRP - Technical Report : Lean research report - FO0425   (7106k)
Time-Scale and Cost
From: 2011

To: 2013

Cost: £335,656
Contractor / Funded Organisations
Oakdene Hollins Ltd
Keywords
              
Fields of Study
Resource Efficient and Resilient Food Chain