There is no single normal level of loss, because the definition of loss changes from business to business: one counts only what is destroyed, another includes what was sold at a discount, a third keeps packaging damage separate. So instead of hunting for an industry average, look at three comparisons that make your own rate meaningful.
Write the definition first. Write down what loss covers (disposal, discounted sales, packaging damage, short delivery) and the numerator and denominator of the rate, for example recorded loss quantity divided by shipped quantity. Track unit, weight and money rates separately without converting between them. The Food Loss and Waste Standard (FLW Standard) says two inventories can be compared directly only on the same scope, meaning the same timeframe, material type, destination and boundary; if the scope or method changes, the old series is recalculated.
Three comparisons that mean something
- Your own history: two per cent last month and three this month means something changed, and it can be found; an industry average says nothing of it.
- Your own routes: if one route in five loses twice as much as the others, look there first: distance, waiting, the vehicle or the receiving routine at the customer. Records are reviewed by lot, temperature trace and damage cause.
- Your own seasons: a summer rise is not waved through as normal; its size is measured route by route.
A zero target is not achievable. The meaningful target is to reduce loss until the cost of reducing it exceeds the cost of the loss: the gain from one percentage point is set against the price of the measure that delivers it, over the same period and in the same currency. If volume changed a lot, show absolute loss too, because a rate alone can hide the number of events.
