product costing for meat processors
TRANSCRIPT
WEBINAR - 25 August 2021
Product Costing for Meat Processors
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Welcome
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House-keeping
▪ Questions can be asked throughout the session, by using the Q&A function. We will answer questions at the end of the session, as well as have a panel Q&A
▪ This session is being recorded, and will be made available to you shortly following the webinar
▪ Following today’s session we will be in contact with the webinar resources
▪ If you would like to arrange a one-on-one demo or chat, to discuss your needs, please email [email protected]
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Sirma KarapeevaCEOMeat Industry Association
Challenges and Opportunities for Red Meat
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New Zealand red meat sector overview
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Covid-19: the lows and highs
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Lessons learned
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The future looks bright
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But there are headwinds
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Comprehensive network of trade agreements to keep markets open
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We have already made significant gains on environmental performance
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…And we are committed to doing more
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Telling our Story to the public
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Pasture Raised Advantage: the role of red meat in a balanced diet
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A leader in animal welfare
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Labour constraints and economic returns
• 43% of total red meat exports are halal certified - worth approximately $3.3 billion
• Rely on about 250 specialist halal workers out of a total workforce of 25,000
• Each of these halal workers contributes more than $13 million in export earnings
• Cannot recruit sufficient numbers domestically and must look to skilled migrant labour
• Current immigration settings are putting approx. $1.5 billion export earning in jeopardy
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Thank You
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John Walker
Director
BMA Group
Matthew Smith
President and CEO
3C Software
Technical Solutions for Product Costing
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Minimise The Framework Effects We Operate In
Costing can’t change
the frameworks we
operate in, but it can
minimise the effects
Global Supply Chain – Changing markets and the
ability to offer product to decentralized base
comes complexities. High export exposure means
benefits need to outweigh the risk.
Regulation – Regulation costs effect almost
every action in our process. The cause and
effect on a product level is often concealed in
hidden costs creating skewed results across
products.
Ultimately, small % changes in headline costs
can have a material effect on product
margins. Knowing your processes at the
detailed level can minimise errors.
People – Comparatively high rates coupled with
minimal flexibility with sharp demand changes.
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What Is Modern Product Costing?
The ability to quickly and accurately answer the question “what’s the cost of…” to improve your company’s ability to make smarter, informed decisions around the tactics and strategies relevant to your business.
Rules DataTools
Three Edicts of Modern Product Costing
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Rules – Models Are More Than Just Maths
To deliver value through insights, product cost models should adhere to four fundamental tenants.
Support (your) real world situations
Include measurable
and meaningful KPIs
Apply consistent logic and assumptions
Deliver timely results
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ImpactECS Model ing & Analyt ics P lat form: User -Def ined Models
Product Costing
New Product & Configurable
Quoting
AllocationsBudgeting & Rate Building
What if Simulations
Variance Analysis
ProfitabilityCost-to-Serve
Inventory Valuation
Supply Chain Analytics
Tools & Data: Existing System Landscape Has Analytics GapRobustness and flexibility are required for budgeting, planning, and forecasting processes.Combining historical and new data with user-defined rules, assumptions and calculations can power a wide range of analytics activities across the enterprise.
Customer Master
Activity Master
Order Master
Vendor Master
Sales Master
ERP
General Ledger/Chart of Accounts
Material Master
Routing Master
Product Master
Bill of Materials
Equipment Efficiencies
Equipment Capacities
Set-up / Changeover Times
Lot Sizes
Work / Production Orders
Shop Floor/Process Control
Run Times
Machine Speeds
Labor Times
Material Flows
Forecast Data
What-if? Inputs
Projected Volumes
Best-Likely-Worst Case
Any Input Override
Simulation Results
New Data
Data Warehouse
Warehouse Management
Systems
Payroll & Time Tracking
Ticket Systems
Other Systems
User Defined Apps
Legacy
Lab / Quality
Excel Files
Third Party Payment
ETL
Regulatory Expenses
Farm Meat Block Disassembly Processing + Packaging Distribution Channel
Total Cost: Costs are accumulated for each process and activity at each stage of the value chain.
Profitability Insights: Compare or simulate costs and profits at any stage or across the entire value chain.
Profitability Insights: Meat and Poultry IndustryFinance and accounting teams are expected to provide forward looking, actionable insights to shape strategic goals and improve day-to-
day decision making. The best companies make operating and investment decisions by employing an integrated, end-to-end approach to
cost and profitability analytics.
▪ Data collection and availability
challenges
▪ Number of grow-out days
▪ Feed formulations and costs
▪ Immunisation cost
▪ Planning for finished product
demand cycles
▪ Inconsistent quality of incoming
material (means radically different
yields and costs)
▪ Mathematical challenges – meat
block valuation
▪ Cut patterns and trees
▪ Yields
▪ Inventory valuation methodology
▪ SKU explosion
▪ Challenge of manufacturing
process change to reassemble from
disassemble
▪ Difficulty assigning direct and
indirect labor and overhead to
products
▪ Packaging and Labeling BOM
complexities
▪ Data collection challenges
▪ Indirect costs hard to assign to
products
▪ Variability in process – hired freight,
own trucks, customer pickup
▪ Yield loss and spoilage
▪ Pressure from customers
▪ Cost reductions
▪ Varying packaging and delivery
requirements
▪ Trade Promotions
▪ Rebates
▪ Discounts
Grow out
Breeder → Farm
Raw materials → FeedDisassembly Portioning
Further processing
Logistics Cost-to-serve
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Processors NZ 24
ImpactECS Demo
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Processors NZ 25
• Kevin Simon
• Director
• BMA Group
Kevin SimonDirectorBMA Group
Panel and Audience Q&A
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Processors NZ 26
• Recording• Resources• Further questions
Thank you
Want to Connect?
BMA GroupBma.com.au
https://www.linkedin.com/company/the-bma-group
+61 2 9884 8499
