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Circular Procurement for the Food Catering Sector

Singapore has shown how economic development, environmental conservation, and social inclusion can all co-exist. However, we now face new challenges. Climate change challenges our way of life and survival as a low-lying island state. Addressing waste management with everyone goes a long way towards mitigating climate change, especially when our planet’s limited resources are being stretched by growing consumption due to global population growth and rapid urbanization. Earth’s limited resources are becoming increasingly strained because of the massive volume of wastes generated.

Procurement helps companies achieve long-term success by incorporating circular economy thinking into supply chains, especially if they are already actively working with external parties for innovations. Companies should take a comprehensive approach to retrain current sourcing teams to take advantage of circular economy opportunities while managing risks.

Considerations sustainable procurement
Picture taken from SIPMM: https://publication.sipmm.edu.sg/main-considerations-sustainable-procurement/

Sourcing for Waste Collection and Conversion

In the food service industry, the extensive use of cooking oil is almost unavoidable. Previously, the sourcing committee was required to source a waste collector to consolidate the waste oil and transport it to designated disposal facilities. However, as more organization are increasingly becoming socially responsible, there has been a change in how companies dealt with waste oils. Instead of engaging waste collectors for such disposals, the company can either sell the waste oil to the waste collectors, process the waste oil into biofuel, and sell them to the targeted market.

Another way is to invest in constructing a small bio-fuel plant in the facility for the processing work before selling them at a higher margin. Even though building a small biodiesel processing plant is prohibitively expensive, the return of investment (ROI) is comparatively high since biofuels can fuel the delivery trucks to deliver catering services rather than purchase commercial diesel, which is based on fluctuating market rates.

Fewer emissions are also released during combustion as the waste oil is converted into reusable fuels. Biofuels, according to reports, will reduce greenhouse gas emissions by up to 65 per cent. Biofuels are also less polluting to the atmosphere since they are produced from renewable energy. As Biofuels are biodegradable and have a higher cetane number and better lubricating properties that extend the combustion engine’s lifespan and reliability, it decreases the risk of soil contamination and groundwater pollution during shipping, storage and usage.

central kitchen operation
Picture taken from SIPMM: https://publication.sipmm.edu.sg/supplier-managed-inventory-central-kitchen-operation/

Procurement of Food Waste Composting Machine

Food waste is a significant waste stream in Singapore; when it comes to achieving eco-friendly and sustainable growth, there is a need to improve the current food waste recycling rate. Most of the general waste is disposed of and handled by an external waste collector whose monthly charges are dependant on the number of bins requested or the total weight of general waste disposed of. Building a biofuel manufacturing plant is significantly more expensive than installing a Food Recycler device in the facility. However, the ROI is equivalent because the waste is being segregated through in-house efforts, which gradually decrease the general waste collector’s reliance. Before decomposing food waste into composting machine, the machinery will produce a food audit report, which allows the organization to modify their processing processes or redesign the menu on the use of raw materials to optimize usage and minimize waste.

The equipment can eliminate food waste by up to 90 per cent, reduces CO2 emissions, and save energy due to the low operating temperature involved. The product is an organic fertilizer free of insects, Mollusca, and their larvae. As a result, no additional treatment or processing is required. The by-product can then be packaged and sold for monetary gain. It increases the brand awareness of the business.It also allows the end consumer to be part of the circular process by closing the end loop since the compost goes directly into the soil as fertilizer for the plants.

P:rocurement Contracts
Picture taken from SIPMM: https://publication.sipmm.edu.sg/major-agreements-negotiating-procurement-contracts/

Strategic Sourcing for Eco-Friendly Packaging Solutions

The attractiveness of a product’s industrial or consumer packaging has a significant impact on its popularity. However, long before the product reaches the consumer, the packaging plays a vital role in its transportation, storage, and handling. Accessing the lifecycle of packaging material choices and the provision of waste and recycling facilities to handle waste materials are some examples to illustrate. However, not all bio-degradable plastic can be broken down entirely unless buried in landfills, which Singapore cannot afford due to land scarcity. In contrast, compostable packaging can be decomposed along with food waste as its materials are made of bamboo or sugarcane pulps. In this regard, the procurement team could help assess the reorder stage based on prior usage outcomes, consolidating the sustainability of packaging and supplier’s compliance to the relevant worldwide standards, product certification to introduce waste reduction strategies. At the same time, manage the quantity to avoid over-ordering. By managing the quantity well, it allows the lead time to be minimized through selective sourcing to reap savings and create opportunities to re-negotiate contracts to maximize long-term cost savings.


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References

Carolyn Khew, Straits Times. (2017). “Recipe To Turn Used Cooking Oil Into Fuel”.Retrieved from https://www.straitstimes.com/singapore/environment/recipe-to-turn-used-cooking-oil-into-fuel, accessed on 03/04/2021.

Cynthia Wong Mei Kuen, ADPSM. (2021). “Key Success Factors for Sustainable Procurement”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/key-success-factors-sustainable-procurement/, accessed on 05/04/2021.

Lyn Chong Mei Ai, DPSM. (2020). “Essential Techniques to Manage Food Inventory”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/essential-techniques-manage-food-inventory/, accessed on 03/04/2021.

NEA. (2017). “Food Waste Minimisation Guidebook For Food Manufacturing Establishments”. Retrieved from https://www.nea.gov.sg/docs/default-source/our-services/waste-management/fwm-guidebook-for-food-manufacturing-establishments-(resized).pdf, accessed on 03/04/2021.

Nur Afiqah Bte Ismat, DPSM. (2020). “Common Techniques for Planning and Controlling Inventory”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/common-techniques-planning-controlling-inventory/, accessed on 03/04/2021.

Westcom Solutions. (2021). “Benefit Of Food Waste Machine”. Retrieved from https://westcomsolutions.com/benefit-food-waste-machine/, accessed on 03/04/2021.

Desmond Tan, ADPSM
Desmond Tan, ADPSM
Desmond Tan has extensive years of experience in the specialised field of procurement, and specifically in interior design, food and beverage, and the hotel industry. He holds a SHATEC Diploma and is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Desmond completed the Advanced Diploma in Procurement and Supply Management (ADPSM) on April 2021 at SIPMM Institute.
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