Jan Grütter, Managing Director of softproviding, is convinced that “the main problem faced by the industry is sinking profit margins. The market, particularly the retail sector, dictates the prices. The actual sales price is determined in advance.” Further, the meat industry is very capital-intensive. High energy costs, high material input, onerous statutory conditions, such as traceability in accordance with EU Regulation no. 178/2002, and the pressure on prices are really hammering the industry. “If you’re an SMB and you don’t just want to survive, but also want to be successful, your guiding principle must be to make all costs and processes transparent, for value added can now only be generated within the company,” adds Stefan Mailänder, CFO of SAP Business Partner ORBIS AG, German consultancy partner of softproviding for the meat industry.
Covering comprehensive requirements
The specific requirements of the meat trade were not adequately reflected in the functionality and technological possibilities of previous solutions. “That’s why our goal was to develop a solution that was tailored to the industry and based on SAP,” explains softproviding Managing Director, Jan Grütter. According to Grütter, myMEAT, the qualified mySAP All-in-One solution, depicts all industry-specific processes, from slaughter, purchasing, storage, production, batch allocation, carcass cutting, order picking, and sales right through to traceability, financial accounting and EDI (electronic data interchange) in a meat-industry standard. “Furthermore, it is a practice-oriented software solution where industry specialists were involved in the development,” Grütter stresses.
The Swiss software company used the SAP R/3 ERP standard functions as far as possible, but enhanced these processes and functions by means of industry-specific modules, particularly in production logistics and process controlling. Subsystems, such as those used for slaughter and carcass cutting (weighing, classification systems) or in order picking (weighing, labeling systems), are also easily integrated via a standard interface.
The solution records all data relating to a specific delivery and animal from the point at which the livestock is accepted. It is particularly important that individual animals can initially be withdrawn from the slaughter procedure, if, say, a vet has reservations, and then returned at a later stage as necessary. At the same time, the vet can set a freely definable defect code. From this the system automatically derives the relevant status for further processing (suitable, partially suitable, unsuitable). “If an animal is either completely withdrawn or subsequently reintegrated into the slaughter process, the slaughter sequence isn’t interrupted. Instead the sequence is automatically updated and kept intact,” explains Jan Grütter. This ensures a smooth process and secures consistently high meat quality.
From paddock to counter
“Today’s consumers don’t just want high quality, they also want to know where the meat on their plate has come from,” says Grütter. The butcher number provides the necessary transparency. “myMEAT assigns a unique number that enables an animal to be identified as soon as it is accepted,” explains ORBIS CFO Stefan Mailänder. This enables a company to identify an animal precisely and trace it back to the corresponding producer.
The system also assigns a batch number, but only after slaughter when half carcasses have been booked into the warehouse in terms of quantity and value. As meat-processing companies also work with batch numbers in the following processes of carcass cutting and production, “half carcasses can thus be traced at any time,” Mailänder remarks. Using the butcher and batch numbers, myMEAT can identify the animal from which any individual piece of meat originated.
The operational data capture feature integrated in myMEAT, with weighing, pricing, classification and control systems, provides additional transparency of the meat-processing and business process. “The system thus ensures that the origin and processing history of an animal can be monitored seamlessly as required by the regulations from the paddock to the butcher’s window at all times,” Jan Grütter assures.
Monitoring processes and cutting costs
As processes in the meat industry not only have to fulfill statutory requirements, but are also very intensive in terms of materials and energy, it makes sound economic sense to calculate, monitor and minimize the costs incurred (for instance during the carcass-cutting process). This applies to purchasing control, materials planning and the production process in equal measure. A special monitoring process compares the material quantities going into the carcass cutting process with those after carcass cutting is complete. This enables companies to compare losses of materials and actual/target deviations from the carcass cutting process at any time. The system also measures and records production-relevant losses due to boiling and cooling. This gives companies an overview of the excess or shortage of individual items at any time, and they can determine running costs and losses or profitability. From this they can flexibly cost prices, such as slaughter prices or material prices. In Switzerland, for instance, the calculation of the slaughter price is based on certain quality characteristics (classification, “label meat,” CH-TAX), and these can be extended as required. Each business can apply its own criteria for defining the evaluation price if it chooses. Ongoing monitoring of processes and calculation criteria helps businesses check and reduce internal costs.
Additional tools, such as ORBIS iControl, provide a powerful graphical means for visualizing results and analyses from myMEAT. In the production sector, the SAP consultancy company’s Business Intelligence (BI) solution analyzes machine and operating data (temperature, water consumption, current intensity etc.) for production purposes. The BI tool also provides customer and cashdesk data as an important basis for deciding aspects such as the various product groups supported, the structure of the product range, and other market-related factors.
Closing the gaps
According to the Swiss SAP Business Partner, the implementation can take between 3 and 18 months, depending on the functionality required and the size of the company. Grütter explains that the significant difference in the implementation times quoted derive from the individual structure of companies. Project runtimes are determined by the depth of the process in question and criteria such as the type of process (slaughter, carcass cutting, production) and external systems (number of points for capturing operational data, pricing, etc.). myMEAT is therefore only suitable for companies with annual sales in excess of €15 million, the minimum number of users depending on the SAP (R/3 ERP) and myMEAT functions installed in each case. System requirements are “classic” SAP configurations of Windows, Linux or Unix systems under Oracle, MAX DB (formerly SAP DB) or SQL Server. softproviding does not provide concrete pricing for myMEAT, “although we are happy to provide interested companies with a concrete quotation,” reports Grütter. “The main thing is that we can now provide the meat industry with a real company management, optimization and control system.” In comparison to other process-oriented industries, the meat industry had a lot of catching up to do before it arrives at a highly integrated functional system. “We have now plugged this gap with myMEAT,” he remarks proudly.