About 8 percent of global stock perishes or is thrown away every year, translating to about $163 billion worth of wasted inventory, Bloomberg reported Nov. 10, citing a new report from materials supplier Avery Dennison.
The report, "The Missing Billions: The real cost of supply chain waste," is based on a survey of 318 businesses in the U.S., U.K., France, China and Japan, as well as 7,500 consumers. It covers five segments: food, beauty, apparel, automotive, and healthcare and pharmaceuticals.
The beauty sector has the highest amount of lost inventory due to overproduction (6.2 percent), followed by the pharmaceutical industry (3 percent).
"Many companies are playing it safe with additional inventory, rather than risking leaving consumers empty-handed and frustrated," the report said. "The result of this trade-off is overproduction, which is a significant cause of waste in the supply chain."
The report estimated inventory reduction alone could save the pharmaceuticals industry $25 billion.
View the full report here.