What is the meat of the matter for manufacturers of meat products?

Meat production

With millions of animals being processed in one single production plant, meat is definitely a complex business.  Whether you’re processing pork, beef or poultry, the challenges are very similar. Meat manufacturers usually suffer from the lack of cross-functional visibility as well as cross-company visibility. Everything starts and ends with the planning department, resulting in a high-stress environment for planners at meat manufacturing facilities: If a customer’s order was missed, or if there’s a raw material shortage, the blame is placed on them. Why does this happen?

What is distracting meat manufacturers from building efficient plans? Let’s have a look at the key challenges that meat planners are facing:

The unpredictable nature of size

One of the key challenges in meat planning is the uncertainty in supply – you can never be sure if you’ll get the number of animals that you’ve ordered. In addition, the size and weight of the animals may differ. As the exact specification of the animal is only known after the slaughtering, planners need to be flexible once reality kicks in. With the right planning tool, the optimal valorization can be recalculated and a new plan can be created in real time, based on the most recent information received.

Strict food safety regulations

Monitoring a product’s shelf life is a key factor in maintaining food safety. It’s also a very important topic for meat manufacturers, and it’s also a difficult one as shelf life changes throughout the production process. Here’s an example: fresh meat expires in 2 days but when you cook it, the shelf life is extended to 4 days. Shelf life can also be extended by adding flavors such as salt or smoke. Different storage methods such as freezing or vacuum-sealing can extend the shelf life of a product, too.

The functional requirements for shelf life add a fundamental complexity to generating a good plan. In Master Production Scheduling, you now need to know the age of each product. It is only possible to create a feasible plan in terms of shelf life when you have an advanced planning tool in place as all the rules and regulations make it so complex and difficult.

In addition, allergens such as gluten, nuts, or milk products that are present in certain convenience products need to be monitored. Cleaning between certain product processing cycles needs to be planned to avoid contamination.

There are more rules that make planning more difficult. The rules are fixed per product and per customer, e.g. a discounter supermarket might be more flexible and allow different ranges of meat, while a premium supermarket would want meat of a specific quality and freshness. With those constraints, meat manufacturers simply have to plan, and plan well.

Complex intercompany logistics

Intercompany transport is necessary, as there are multiple types of factories: Some only cut the meat, some produce convenience products etc. A factory that cuts meat can send products directly to the customer or to the convenience food factory to process the meat further.  This shows that planning per factory won’t make it possible to oversee all options and make the best decision. A manufacturer can’t just look at each plant as he always has a trade off between fulfilling customer orders now or sending it to a convenience product factory to obtain a higher margin product.

Shifting customer demands

Orders from customers often come in at short notice, for example with only 2 days in advance. Sometimes a customer might even call the very next day to change the order – doubling or halving the quantity of meat, or cancelling the order outright.

Because of this uncertainty, a manufacturer needs a system that can create a new plan very fast to include all the new information.

Retailers are eager to avoid revenue declines that result from gaps in inventory, so the order fulfillment rate is a key factor in assessing the quality of their relationship with a meat supplier. The bad news? Retailers will not hesitate to go elsewhere if a manufacturer cannot supply sufficient goods for peak demand points or promotional initiatives. So remember: never underestimate the importance of your customer order fulfillment KPI.

Plan smarter and get fit for the future

Because of the uncertainty in supply and demand, as well as changes in customer demand, a manufacturer needs a system that can create plans that can quickly be adapted to include all new information to face any disruption head-on. Also, all this information needs to be collected in one place – a spreadsheet-based plan and an inconsistent planning approach with different files being used in different plants make it impossible to have one single source of truth.

With the right planning and scheduling tool, you can immediately see if order fulfilment is possible or not. In addition, live feedback from the MES on the shop floor to the scheduling system helps to improve productivity and efficiency as planners are given full visibility over the entire operation.

As you can see, the challenges faced by meat manufacturers makes their planning efforts extremely complex. In order to become more agile in the business it is necessary to have one single integrated solution – from S&OP to production planning to manufacturing to transportation scheduling. It is only possible to create a feasible, optimal plan when you have an advanced planning tool in place.

Learn more about the challenges faced by meat manufacturers and how to solve them in our brochure, What’s eating the meat industry? Download it here.

Are you facing more planning challenges that are different from what we’ve mentioned in our brochure? Let me know in a comment or contact us so we can take a closer look at your planning puzzle.

This post was previously published on LinkedIn.