Raising Abattoir Output And Profit: A Case Study
Find out how Ramburg Beef, a local and rapidly expanding abattoir and meat wholesaler, has boosted productivity, profitability and success with software custom-made for abattoirs, saying: “the return on our investment was clear when measuring the speed and precision of the production process, combined with new controls and real-time reporting we now have.”
The Consumer Protection Act (CPA), other industry-specific legislation, as well as greater consumer awareness about responsible food production means that the abattoir industry is under increasing pressure to ensure that their systems and processes allow for complete traceability of stock and access to real-time, accurate information.
This mindset shift can prove challenging in an industry that is dominated by manual processes and excessive spreadsheets. Furthermore, SME’s within the abattoir industry may view an investment in new systems and technologies as an unnecessary expense, as opposed to a platform that enables expansion and increased profit margins through production efficiencies.
While some of the new legislation is aimed at benefiting end-users, it also forces abattoirs to audit their current systems and implement end-to-end solutions to meet legislative requirements. In turn, this is assisting SME’s within the industry to harness the power of Enterprise Resource Planning Solutions (ERP) to streamline their processes and increase their profits.
A local and rapidly expanding abattoir and meat wholesaler that is tasting the success of implementing such a system is Ramburg Beef. The business realised that they needed to embrace technology rather than resist it, in order to stay a cut above the rest in the competitive and demanding red meat industry.
The business challenges –
There were three key areas that Ramburg Beef wanted to address to grow their business, protect margins and to comply with legislative requirements. These were traceability of stock (from feedlot to retailer), improved access to information and a fully integrated production, sales and accounting system.
The following four business challenges were identified:
- No integration between Payroll and General Ledger; this was done via manual capturing and was therefore very admin intensive and time consuming.
- Multiple units of measure; incorrect pricing could hurt relationships with clients and incorrect units of measure could change the product price per line item.
- Reports on output of workstation; the reports on production output were not live and were dependent on manual capturing. This meant that there was a greater risk for human error, or for clients to miss certain pieces of pertinent information by having to go through extremely large reports.
- Production stage tracking; being unable to track at what stage a production order is at, and how long it has been at a specific stage could affect the output of the production process.
After identifying the business challenges above, Ramburg Beef decided to change the way they do business and implement an ERP solution to address the risks associated with these challenges. They found the solution their business needed in the SAP Business One Abattoir software.
WHAT WAS DONE :
- To address the lack of integration between Payroll and General Ledger: the system incorporated these two aspects of the business and all postings to ledgers became an automated process.
- To improve the units of measure and pricing: a warehouse and inventory management solution was implemented which allowed inventory to be managed using various costing models, while maintaining the master data.
- To improve reporting on the output of workstations: a completely integrated solution was implemented to provide a real-time, bird’s-eye view of KPI’s. This provided a holistic view of company information – set up to the particular users viewing requirements. This allows for the elimination of production issues through immediate notification and to generate reports with live, accurate data for educated decision-making.
- To address the lack of production stage tracking: a specific abattoir modular solution was implemented which links back to a specific farmer or feedlot. The individual animals’ ear tags are linked to a unique serial number and a tag with the same serial number is firmly attached to the carcass. This data is stored to provide a complete timeline for every carcass which includes slaughter and dispatch time, through to deboning.
THE RESULTS :
- Integrating the Payroll and General Ledger: the finance department saved valuable time, which they are now able to use to better manage company finances and budgets.
- Managing various costing models with one master data dashboard: personnel are now able to determine which valuation method is best for their business, find data applicable to them easily and select from different pricing options provided for use per client or product line.
- Real-time production output indicators per work station: Ramburg Beef is able to accurately plan based on live data which improves their production lines. They are also able to address queries faster and have much better business insight, which ensures that they always have enough finished goods to satisfy demand, and manage their cash flow and available resources.
- Eliminating the reliance on manual processes and spreadsheets to run the business: This greatly reduced the risk of human error.
Clyde Langenberg, Financial Manager of Ramburg Beef, reported that “the return on investment was clear when measuring the speed and precision of the production process, combined with new controls and real-time reporting we now have in place”.
He also noted that when looking at the cost implications of not having these processes, it quickly became clear that the business had made the right decision. The abattoir now has the ability to accurately track all products and batches to provide a better service to their retail stores and local butchers.
From the case study above, it’s clear that it is important for abattoirs, and other growing SME’s, to realise that moving over to an automated, integrated and real-time work environment is not as daunting as they may think. Once the decision has been made to take the business to the next level, decision-makers need to ensure they have the correct implementation partner to provide training and ongoing support. Harnessing the power of this type of technology can increase productivity, profitability and success.