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More Choices Mean More Waste

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As much as 10% of all supermarket food is dumped because it spoils before it can be sold. This amounts to $20 billion in annual waste in America alone. The cause may be from too many choices for consumers.

An editorial from The Economist (reprinted in the Seattle Post-Intelligencer) explains that the industry term for loss is “shrink”. Food spoilage is partially caused by inability to accurately predict demand, but the author highlights a more interesting factor:

Many American store managers believe high shrinkage is inevitable, given their enthusiasm for huge displays and the widest possible range of produce. “This feeds a vicious circle of more and more choice,” says Matthew Isotta of Oliver Wyman. And it can backfire if displays disguise rotten food or too much choice overwhelms customers.

Supermarket

© Flickr user tamaiyuyu

When a process offers choice to a stakeholder, it can generate satisfaction. However, too many choices can overwhelm both the customer and the entire system. In Barry Schwartz’s book The Paradox of Choice, studies of supermarket patrons demonstrate that we are less likely to buy when there are too many options to easily evaluate them all.  The end result is not only a dissatisfied customer, but a supply chain system that generates wasted products.

Workflow management at an office, warehouse, factory or other facility is subject to similar principles. Some choices are good, as they promote flexibility and help people to have ownership of their work. Too many options can establish a culture of chaos where it seems like everyone has a million projects and nothing is ever truly completed.

This is a tremendous irony of our modern culture. We assume that it’s a better business environment to have more options. But in reality, choices can generate problems. This is a classic process improvement problem: people have to wear too many hats and they can’t focus on what matters. Or they have too many tools to accomplish the same tasks.

Are you talking to business consulting experts to help your organization understand the challenges and opportunities in the way you work? Contact us today to help provide the right choices to benefit stakeholders and reduce the tragedy of waste.

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