I was travelling the East Coast of the US last week, talking to potential clients about the opportunities in their business and potential solutions for them. I have been looking at existing systems in plants for about 20 years, designed, implemented or sold these solutions in more than 200 companies to date. Believe me when I tell you that highly optimized solutions can only work in fully integrated systems. In other words, you should rather opt for a system that may be missing a few features, than having a system in place that can do it all, but is fragmented and not integrated.
I wrote an article about the Top-10 features for the meat industry a few weeks ago. I listed features that based on my experience are making a difference for meat packers and processors if they are successfully implemented. I followed that up with one that explained one of the features, one about Least Cost Formulation. This article explained already that the larger the problem optimized, the better the solution gets.
This means that for a truly optimized least cost formulation program, you would need to look at:
- Purchasing to understand what specifications of raw material in what quantity will be available in your planning horizon
- Warehouse Management to understand what raw materials you may have frozen available that can be used to substitute any required raw materials.
- Production to have recipes that define lean points, protein content and possible meat ingredients for a meat block formula that create the exact same product.
- Sales Demand and Product Availability, so see what production orders perhaps can be moved or sales orders can be delayed in loading and expedited in transportation.
- Quality Management and LIMS which tracks the actual analytical values of the raw materials you received, so that you can accurately formulate the meat block based on actual data.
You see very quickly that the sausage maker can only achieve the optimal result to the solution by looking at almost all aspects of the business at the same time. This is tremendously hard to do, if certain segments of the supply chain process that are impacting the optimized model reside in different systems. This becomes even harder, if your business is working 24/7 and you never have the opportunity to extract data, optimize, and write the optimized results back to these systems.
Integrated Systems are actually very hard to find. In the meat industry you find only 2 companies in North America that provide truly specific business software solutions for the meat industry. An industry specialist must make more than 50% of its revenue in a certain industry to be truly a business solution provider and having truly a stake in the meat industry and a desire to advance it. To provide a business solution, you must provide more than just ERP or just data collection, you must be able to at least deal with serialized inventory, create the bar-codes and scan them out and you must have some of the specific solutions for cutting and deboning, animal harvesting or least cost formulations that make the industry successful.
To my knowledge, there are only two companies that fit that mold:
- CSB-System with approx. 1,600 plants running world-wide and probably the largest install base in meat processing companies globally. CSB is also the market leader for meat packing and processing facilities in Canada.
- Aspen Systems with about 200 plants running in the US, and a smaller installation base in the North American international market (Canada).
Anybody else does either need partners to complement a solution that may fit the meat industry, or does not have a significant stake in the industry, and their system comes with a lot of solutions that are not suitable for your business, and advancement always competes with the other industries.