Pink Slime, social media and the truth

Posted on March 27, 2012 by Administrator

I perhaps should not use the term “Pink Slime” as somebody that caters to the meat industry, I think it illustrates a point.

I was travelling for 8 days visiting my favorite meat conference, the NAMP Management conference in Chicago, later continuing to Germany and eventually back home. The entire trip was somehow deeply intertwined with truth and what we like to see as the truth. Whatever the truth is, we are no longer living in a world where we reference easily what is true and what is not and if we are not creating some sort of truth ourselves, we will wind up battling truths created by others.


Stephen Colbert coined the term “wikiality” in 2006 during an episode of “The Colbert Report” as “Reality as decided on by majority rule.” Over the past 6 years, a majority of decisions and information we are consuming are wikialities. We see videos of certain feats on Youtube, which some of us take as real. I get almost weekly an email stating some sort of fact, that I can prove false within a few minutes and some additional research. Not only private people create wrong opinions, even elected officials. If one claims that domestic policies can reduce the costs of gasoline to $2 per Gallon, they are either complete idiots or liars, but in any case, they create a wikiality that a large portion of our population believes in.

The truth of the matter is that wikialities drive major opinions, forcing BPI, the company that produces LFTB (lean fine textured beef, dubbed “pink slime”) to close three plants. The buzz, the social media and the perceived truth drives a good company straight to bankruptcy. I would be surprised if BPI will survive the summer, I would be surprised if anybody in the meat supply chain will touch that stuff, I believe that nobody wants to be associated with the product and hiding is no longer an option.


In general I believe that the food industry in general has some issue with the truth. The truth is, some foods are manufactured to provide cheap nutrition to a growing population of people that cannot afford good food. The truth is that BPI provides a nutritious product at low costs. The truth is, that BPI actually recycles meat trimming that would be otherwise unhealthy or would be processed for pet food, creating a higher value. But the truth is also that nobody can go out today in the market and claim that they are in business to provide cheap foods.

Another truth is, that some companies have better processes in place to prevent health hazards than others. In the result, the truth is, that some foods are safer than others. By claiming “safer foods” we also claim that other foods are unsafe(r). That is another non-starter.

All these counter measures by the AMI, other associations are not really helping. Defending a cheap process as a high quality product does not help, it is just not believable.

During this long trip, I met many people that had the one thing in common: They did not understand social media. They did not understand why a company would need a facebook page. I hope the BPI case illustrates it well: If you don’t create the truth about your company, somebody else will. Social Media, Blogs and other tools allow individuals more so than ever to create a positive image of themselves, they create wikialities that the public assumes as a fact. Every kid posts today on facebook content just to appear cool among their peers.

The truth today is largely what we find when we search on google, when we look at our news feeds on linkedin and on facebook. Truth is, what aggregation apps such as Yahoo Livestand, Google Currents, AOL Editions and others on our IPads put together for us. The truth is no longer what is printed in Encyclopedia Britannica, because it is not being printed anymore. We need to print the truths, we need to fill the web and the world of google with what we would like to be the truth. If you are in the meat business or any other business today, you must start. Embracing the truth in the process does not hurt.


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Feature Definition – Product Availability for Meat Packers and Processors

Posted on March 10, 2012 by Administrator

About a year ago I wrote a blog post explaining the weaknesses of MRP concepts in the meat industry. They usually just don’t work. The reason for this is that commodity meat market behaves more like a the oil market, where the costs of actual exploration and production of oil don’t have anything to do with the price oil. The only thing that matters is supply and demand and any changes of these. In a global economy it also does not matter whether we produce domestically more or less, if the global demand is higher than the supply or anticipated supply, prices will go up – oil and meat alike.

Oil does have a key advantage over meat – it has basically no expiration date, but other than that, there are more commonalities then differences. Oil as meat has different yields (e.g. Brent vs. WTC) and different ways to take it apart and produce different cuts. Technically speaking, Propane, Regular, Premium and Kerosene are different cuts of raw oil. The oil and gas industry does conscious decisions on what cuts of oil to produce up to different product specifications for gasoline sold to California or Arizona.


Meat packers must make decisions day in and day out what type of meat cuts they want to make of the incoming supply of animals. Most meat packers can only operate profitably, if they run at 90% or more capacity. This means that a change in the number of processed animals is rarely an option and never a good one.

With this said, meat packers do not really have the option to change the supply and they cannot, at least not on the short term, change the demand on the market. Changes in demand are essentially changes in end customer consumption. These are happening, but they are slow and hard to influence. At the end of the day, the most important decision for a meat packer is what to make out of the incoming animals / carcasses. It is almost exclusively the only decision that really matters for the success of the organization.

Product availability (PA) for oil and gas is essentially reflected in the prices of the commodity markets on stock exchanges. Since oil can be stored for almost an unlimited time, meat basically cannot. The value of meat will be strongly depreciated when it turns from a fresh commodity to a frozen commodity. This is fast the case with chicken, a little slower with port and even slower with beef the case. At its core, a product availability system must cover at the minimum the entire planning horizon of freshness or shelf-life or products until they hit the mark that they need to be sold at a discount or marked down due to freezing.

Different from the traditional MRP approach, PA barely look at inventory positions. More importantly, they look at unsold inventory based on customer age requirements and different allocation methods of sales orders against current and future production. Product availability systems provide a clear view of available products that can be sold (ATS, “available-to-sell”) taking into account hard allocations, in which e.g. distressed product is committed to a certain sales order and must be shipped with that order and soft allocations that take customer specifications into account, such as different pack variations and desired age/shelf life.

Some people may think now that the best way would be to optimize the product mix they are going to produce, but this is actually the wrong way to look at the issue. It actually does not really matter for a meat packer what he produces, that is not the point. There is plenty of variability possible up to the last minute to decide how the carcasses need to be broken and how they need to be boxed up. Key is the price that the item can be sold at. So the only variable in this game is the price I move my meat cuts for, what meat cuts I am trying to move. This will be a consequence of the prices I am going to set.


Basic product availability systems are highly integrated in the order processing functions of the ERP solution. They provide instant feedback on whether a requested quantity of a certain meat cut is going to be available on a requested delivery date with the desired freshness. A basic product availability system provides instant feedback to order takers and production schedulers of failed availability checks and manages the proper interaction between scheduler, order taker and customer of course. Enhanced PA systems can even make smarter decisions and perhaps can check product availability based on available primal, since it does not matter what I am going to make a few days from now, whether I sell the loin bone-in or boneless, because all really matters is that I sell it at the right price and that my customers can rely on me getting what I committed shipping to them.


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How to get GS1 compliant labels – in 89 simple steps

Posted on February 28, 2012 by Administrator

Over the past couple of weeks I covered the technical standards and aspects of GS1-Labels and the applicable standards for the food industry, as well as the physical challenges of printing and applying labels within the food industry. Well, it seems that I forgot to cover the administrative challenges on getting GS1 compliant. Here we go….

Step 1: Getting a company prefix from GS1

The first step is that you license a GS1 company prefix. These numbers are issued by the national offices of GS1 in the country the brand owner of a particular range of products is located. Historically, this prefix was 7-digits long in Europe and 6-digits long in the US, both have been harmonized and the length became variable. You still find that most companies have this 7-digit long prefix, but newer registrants may have longer company prefixes, thus shorter room for their item numbers. GS1 started basically running out of room, with 1 Million participants in the system, it was only able to accommodate less than 10 Mio brand owners total. This change was necessary to increase the availability of GS1 beyond that number while staying compatible with the existing system. The only thing important for companies today is, that they length of the prefix is short enough, so that companies can issue enough GTINS for all the brands they produce. With a 7-digit prefix, this would be a 5-digit number (99999), which should be enough. Even an 8-digit prefix would suffice for most organizations, leaving 9999 GTIN’s available. So regardless of anything, step number one is getting that prefix.

Step 2: Building GTIN’s

GTIN’s, or “Global Trade Identification Numbers” are basically worldwide unique item numbers. There is a range of documents written about these numbers in the standardization documents (links above). But in a nutshell, it boils down to this for most companies:

  • The first digit “P” is the packaging indicator. This indicator has been introduced in 2005. Since a lot of companies still have very old systems, some participants don’t have that completely integrated, so that anything different than a “zero” may cause problems with some customers of yours. You want therefore to use that “0″ whenever possible. To stay within the standard, you must use a “9″ for all catch weight items.
  • Next comes the company prefix “CCCCCCC”, which is in most cases 7-digits long. Check for the proper length when building the GTIN! This is the number that has been issued by GS1.
  • Next comes the item number “NNNNN”. In the perfect world, you want to keep this segment of the GTIN identical to the internal item numbers. It is therefore recommended, that you use 5-digit numeric item codes for all your products that you want to label GS1 compliant.
  • The last digit is a checksum “D”. This checksum is calculated and is needed for technical reasons, making sure that the bar code is properly printed and read by scanners. GS1 provides on its website a check digit calculator that allows you to see how this works and check whether you have it right. You can actually calculate the check digit in MS-Excel using these formulas (A1 contains the number w/o check digit):
    • For the check digit alone: =10 – MOD( SUMPRODUCT(MID(A1, {1,2,3,4,5,6,7,8,9,10,11,12,13}, 1) * {3,1,3,1,3,1,3,1,3,1,3,1,3}), 10)
    • For the whole number: =A1 & MOD(10 – MOD( SUMPRODUCT(MID(A1, {1,2,3,4,5,6,7,8,9,10,11,12,13}, 1) * {3,1,3,1,3,1,3,1,3,1,3,1,3}), 10), 10)

So all in all it would be 14 digits: PCCCCCCCNNNNND



Step 3: Choose your bar code!

I don’t believe that there is a real choice to make here, but still. GS1 allows different types of bar codes, but in all reality companies within the food industry must implement a GS1-128 label on all shipping containers. Again, there are different labels on different packaging units such as consumer items, boxes and pallets, and you need to make a choice on each of them. These choices are also dependent on your internal logistics, WMS Systems and other things and are in detailed spelled out in those standards. With GS1-128 as a barcode standard, you have essentially a barcode with variable/configurable content, and you usually wind up with:

  • On pallets: (00) – the so called SSCC number. You may add other data elements to the pallet-id, but in all reality this may cause more problems that solutions. Especially if you deal with mixed pallets. Even pallets with the same GTIN may have eventually different lot numbers on the same pallet. Any additional element you would label on the pallet must be true for all containers on the pallet. This means that any additional element encoded in the barcode puts restrictions on your WMS and order fulfillment process, so the easiest to avoid all that – don’t put anything else on the label unless you absolutely have to.
  • On consumer items: leave it up to the retailer if you can!
  • On the box:
    • (01) GTIN, mandatory
    • (11, 13, 15, 17) one of those dates, based on your preference and customer requirements
    • (310x or 320x) net weight (either in lbs or kgs)
    • (21) or (10) either the serial number (better and more common) or a lot number. Either one ensures traceability.

Use also them also in the sequence as I provided them, it makes the barcode a tiny bit shorter. There are more options, but again, I try to simplify the options for participants in the food supply chain.

Step 4-89: GDSN, EPCIS and other acronyms you don’t understand (yet)!

It never ends. Once you start embracing GS1, implementation of that organization’s standards will never stop. Retailers will ask you to use these numbers in EDI messages for orders and invoices. They want you to electronically share your master data using GDSN (Global Data Synchronization Network) or a national implementation thereof (e.g. ECCNet in Canada), they entice you to participate in the rapid recall exchange for electronic recall and notification management. It really never ends. The first three steps get you basically on the road, but once you have completed step 3, you reach crossroads and you need to decide what road to take next coming again and again to the same crossroads with just different possible avenues to take.


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Labeling within a Food Production Facility

Posted on February 23, 2012 by Administrator

It seems that a lot of people enjoyed my post last week about general bar coding standards for the food industry. As a matter of fact, these standards are already widely implemented within some segments of the food industry. When I visit today a warehouse containing boxed meats from different vendors, I find that probably 80% of the inventory in there is already labeled according to these standards. Even with Fruits and Vegetables we see more and more adaption of the PTI standards, even though adaptation efforts have slowed down a bit, since the majority of FDA regulated food manufacturers is waiting for the final rulings and recommendations for traceability based on the food safety modernization act. FDA regulated food manufacturers are well served on monitoring and subscribing to the information on the progress on FDA’s website for the topic.


USDA regulated foods have already much more sophisticated labeling systems in place, so while most other food industry sub sectors are working on understanding the basics and learning how to adapt these food industry standards for their individual applications, USDA regulated foods, especially meat companies where more looking at how to actually label within a production environment. This is harder than it sounds. Printing a label is not really the issue and applying it on a piece of corrugated box or combo not either. But printing a label and apply it directly to carcasses on the kill-floor or production containers whether these are “Vemag wagons”, smokehouse racks or plastic bins can be challenging. Even if you get them initially on, you may have issues them falling off in the process when you don’t want to, or getting them off when you want to.

Of course you can look at alternate identification technologies, especially for meat harvesting operations, but these solutions have disadvantages as well. Whether you are planning on putting RF-ID’s into your trolleys or drill holes into them, the biggest disadvantage of most alternate identification technologies is, that they do not provide any human readable information. The future may hold other solutions, as we can see the emergence of inkjet printers that can print directly on the surface of a carcass and video recognition software that can read these letter and numbers. These solutions are today bleeding age, with the emphasis on bleeding. Another big disadvantage of these solutions is, that they require significant capital investment for a fairly small application. This makes most of these solutions cost prohibitive, especially for smaller meat packers and processors.


There is an overlooked solution for a lot of smaller to midsize companies within food, “Loop Labels” where I had somehow trouble finding appropriate vendors in North America. These labels are common in Europe to mark luggage or mark plants in gardening stores. These labels can be made of a plastic compound, that does not tear and can be printed with thermo-transfer label printers. The costs of these loop labels in Europe are in the neighborhood of $60 USD per thousand. This makes the label supply approximately three times more expensive than paper labels, but with $.06 per piece still a practical solution for most companies that want to automatically mark production within the process. These labels can be looped around pretty much anything, whether these are handles of cards and bins, smokehouse sticks or even tendons of hanging hogs. You may even carve a little pocket into the meat and loop them through there. These labels withstand heat, humidity, physical abuse even dirt, which you can easily wipe off. They come also in different shapes, width and supply forms to accommodate any printing need.

The only real downside these labels have is the costs of actually applying them. A trained person can probably apply such a loop label within 10 sec. This is reasonable to do in a lot of instances, especially if volumes are not too high.

It sometimes just takes a look at complete other industries to find solutions for a problem. I know from other solutions, where companies used sugar labels used in tiling swimming pools for labeling, because they can be simply hosed of a container. There are always solutions to affixing markings and identification within the material flow of production facilities except when product is being pumped in enclosed systems. You just need to be creative and you will find the identification technologies for your process.


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Overview of barcodes in the Food Industry for dummies

Posted on February 16, 2012 by Administrator

A lot of companies approached me over the past few weeks about challenges they had with barcodes. While I wrote already a few items on the topic, I thought to write a general overview for people with the necessary resources so that they understand the general framework of barcoding.

First of all it helps to understand that bar-codes are just a font. The only difference between these fonts and the one you are looking at while reading this text is, that barcodes are easier to read for machines and more difficult to read for humans. With this said, creating a barcode is actually as simple as formatting a text in MS-Word. It actually is! The only problem is, that companies in the supply chain have agreed on certain standards, so that barcodes generated by one organization can be used by another. In technology terms, you call this ‘interoperability’ or ‘compatibility’.

To ensure interoperability and compatibility retailers and manufacturer of retail products developed standards in the 70s, first the UCC in the United States followed a couple of years later by the EAN in Europe. Both harmonized their standards eventually with Sunrise 2005 and both standardization organizations became GS1. Today, GS1 has a presence in 108 countries, has over 1,000,000 participants in 156 countries. GS1 is the bar-code standard everybody should use because everybody can understand it, there is no alternative. There are proprietary barcodes for internal applications (e.g. 2 of 5 INT) that we still find in legacy applications, but if you implement barcodes today, you should avoid any implementation of barcodes outside of GS1 Standards. These standards are defined in the “GS-1 General Specifications V12″ (free Download from GS1-Sweden, $1,500 via GS1-US, don’t you love Globalization?).

I don’t know if you really bother downloading the specifications (you should) and read the specifications (you should not), but these are very complex. These standards apply to a wide range of industries, so that they are not only in use in food and grocery distribution, but in manufacturing of all kinds of industries. Even auto parts.

To harmonize the adaptation within certain industry segments, GS1 and trade organization defined within the GS1-framework certain implementation guidelines. They basically define a subset of the general specifications and dumb it down to the relevant information for their constituency. There are already a few out there:

These standards define how we interact between business systems, like warehouse management systems and ERP Systems.

Over the past few years, we saw the rise of consumer barcodes using so called QR-Codes. QR codes today enable consumers to scan barcodes using the build in camera of the smart phones to automatically process information. Most applications of QR codes today contain a link to a website, but QR codes can do much more than that. GS1 has addressed the rise of QR-codes in the latest edition of its general specifications, so that we see a convergence of QR and GS1 standards that probably will progress over time.


Companies that need to implement bar coding solutions have different options. It can be as simple as using a generically available labeling software such as Labelview, via industry specific solutions that provide basic database functions with bar coding and data retrieval (e.g. Harvestmark for produce) to fully integrated industry specific ERP and data collection solutions for food (such as CSB-System), which implement all standard business processes such as order processing and manufacturing based on the industry standards above, naturally enabling companies to adhere to these standards.

It is important for companies to understand the scope of their GS1 implementations. GS1 does not stop at bar coding. GS1 standards encompass other areas, such as EDI, data synchronization and even programming interfaces between business systems, like EPCIS, which is basically Facebook for business applications. Expect that a GS1 compliant implementation will grow, you may start very basic but your implementation will grow over time, since your customers and vendors want to make their business processes more effective and efficient in their pursuit of productivity and competitiveness increases. Companies need to make smart choices on how the implement what they need on the short-term to pacify the demands of their business partners and adapt to changes as they will evolve in the future protecting investments into technology already done.


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