The Missing Billions: the real cost of the supply chain waste

It’s not news that billions of dollars worth of revenue is lost every year in discarded inventory, but that’s just the tip of a melting iceberg.

Avery Dennison’s latest report shows that global organizations are overproducing and exacerbating the supply chain crisis — estimating that on average 8% of their stock perishes or is discarded annually, which is approximately $163 billion worth of inventory. 

The data found that while companies are acutely aware of the problem, they are not yet investing the budget required to fix it. Of those surveyed, an average of 29% say that their organization’s overall sustainability impact comes from supply chain operations. However, three quarters of businesses are investing 5% or less of their technology budget to supply chain sustainability improvement. 

Unsurprisingly, cost and quality are the highest priorities for consumers globally when it comes to buying products. The data also reveals that sustainability still has a long way to go to make it into customers’ immediate priority lists, with just 16% of consumers putting sustainability in their top three considerations for buying products. 

That said, the research points to a shift in the desire for durable products, with durability ranked by almost half of global consumers (48%) as a top five concern — suggesting there is an opportunity for businesses to shape the future of sustainability by putting a greater focus on product durability. 

The research highlights an intention from businesses to address these issues. For instance, 35% of firms plan to introduce technologies to identify unique item-level tracking and traceability to help fix inventory black holes.

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