High-Steaks Business Planning: Are You Meating Your Forecast?

Winter is leaving and spring is arriving. There’s nothing better and more delicious than a cold beer and plate of sizzling meat from the BBQ, don’t you agree? Do you have your plans ready for the busy season ahead?

The meat of the matter

As part of the fresh food business, the main challenge is supply chain complexity due to the need for freshness, high service levels and price pressure from the retailers. In order to stay ahead of the competition and strengthen customer loyalty, producers need to look at better supply chain practices and place a stronger emphasis on smarter planning.

Meating your planning objectives

The key challenge in meat planning is the uncertainty in supply. You never know if you will get the number of animals you’ve ordered. In addition, the size and weight of the animals may differ. Your planners need to be able to identify and address any gap between forecasted and actual volumes. They have to match the demand for individual cuts with supply, given the capacity constraints of individual plants. Adding to this is the inherent complexity of the raw material: A carcass is a composition of several cuts, each with its own demand curve and a fixed number of disassembly options. The challenge lies in determining what to make from the fixed and mixed supply as to feed the demand for individual cuts.

Optimizing the use of product to match demand in the meat sector is a complex undertaking but can be the key to profit margins. Explore how to overcome demand challenges in the meat processing industry:

Cross-functional visibility

Meat processors are faced with an extra problem. Imagine a summer barbecue without spareribs, steaks, sausages and pork chops, watching a world cup without chicken-wings, or a cozy winter comfort-meal without a roast or casserole. Different seasons demand for very different cuts of meat. What you are left with is a large surplus of the remaining cuts at a particular time. So what can you do with those? Freezing these cuts comes at a cost – not just carrying or inventory costs, but also the cost of freshness and hence, a reduction in value.

What’s the best way to tackle this challenge? The answer is: With end-to-end visibility and a consistent planning approach. Enhanced supply chain visibility and real-time information will help you select the most profitable option, which balances supply and customer demand. Enhanced visibility will also help you determine the shelf-life of less demanded excess cuts and indicate the time windows of when these items need to be sold.

Combine product variations with scenario planning

Product variation in meat is strongly connected to the changing consumer’s taste and lifestyle. Smoked, coated, filled or fried meat has to be readily available from your trusted grocer. Although these variants make an existing product portfolio more complex, these higher-margin products are essential to any meat processor striving for innovation.

With all these new options, it can be difficult to determine the optimal product mix. Scenario planning and the creation of what-if scenarios can help you find the mix that will not only boost profits but is also in line with your business KPIs.

Plan smarter for long-term growth

Meat processing is a complex business: Product margins are tight and external factors including promotions and changing consumer requirements place tremendous pressure on meat manufacturers. The solution? A single integrated solution – from S&OP to production planning to factory to workforce and transportation scheduling. Read how you can beat the four most urgent hazards faced by meat manufacturers.

Interested to learn more about profitable planning in meat processing? Contact me. Learn about the planning system that provides cross-functional visibility, decision-making support, standardized processes, control over inventory holdings, and support in S&OP execution.

What are your biggest constraints in meat production? I look forward to hearing your thoughts.

CATEGORY

Manufacturing, Supply Chain Planning & Optimization

AUTHORS

Catherine Deck and Thomas Wesselink