Meat Producer Brings Home the Bacon with Supply Chain Optimization
The fresh meat supply chain is one of the most challenging of any industry. Working with a highly perishable product, food producers need to ensure their supply chain is both efficient and cost effective.
One such meat producer and LLamasoft customer manages a reverse bill of material where a single raw material (a 280-pound animal) is reduced to several perishable co-products. These parts then go into their own bills of material which include other ingredients including a few cost elements the company adds directly to the bills. For this meat producer, the result is more than 8,000 multi-layered BOMs that can be produced at any of its sites. The company needed a way to quickly analyze various production scenarios in order to make the right production decisions and reduce costs.
LLamasoft worked with project managers to create a supply chain model with several built-in scenarios that allow the meat producer to compare options. To make the modeling process faster and suitable for more frequent use, they simplified the multi-layered BOMs to focus only on those layers that played a key role. In addition, they used expression constraints to account for the numerous co-products produced when processing an animal.
Before running the models, the LLamasoft team also needed to help the company address a few data challenges. The company had grown by acquisition so there were variances in the data gathered from multiple sources. This was especially true of historical data from some of the acquired companies that had previously used a different production management system. To ensure more accurate results, the team used Data Guru to combine the data from different sources and reconcile it before plugging it into the model.
The modeling initiative identified up to 14 percent in annual distribution savings with a reorganized distribution network, and up to 20 percent savings on individual categories of finished good productions. The next step is for LLamasoft to continue the knowledge transfer to the company’s Supply Chain Center of Excellence and prepare them to incorporate supply chain modeling into their production management processes.