Last week we released our Feature Pack 3, a product update containing a suite of valuable new features. One of the features that we’re most excited about is our new variable weight functionality, making it easier for protein manufacturers to cost, code and track their products. In light of this new functionality, we wanted to provide a little background on what makes catch/variable weight such a unique challenge and why these new features are so exciting.
While some industries follow fairly straightforward inventory management and billing systems, the protein industry faces some unique challenges. Because there are often discrepancies between the average weight of food items and the actual weight, many manufacturers opt to use a catch weight inventory management system to avoid issues and treat customers fairly.
What is catch weight management?
Catch weight management is a unique inventory tracking approach that allows organizations to identify both average quantity/weight per item, as well as actual quantity/weight per item.
At first glance, many people assume that actual quantity/weight per item is the proper approach. In reality, this isn’t always the case. When it comes to non-standardized products, it may be necessary to start with average and then move to actual once the number is known.
If that all sounds a bit confusing, don’t worry. Let’s check out an example to clarify what we’re talking about.
Pretend that you run a distributing company that sells steaks. You receive your inventory directly from the butcher at the meat packing facility and then turn around and distribute it to various clients – places like supermarkets and restaurants. The issue is that you never know exactly how much steak you’ll get from the meat packing facility. Every case has slight variances.
Thus, when one of your supermarket clients places an order for five cases and you don’t know which cases you’re shipping, it’s impossible to invoice them for the actual weight. What you do know, though, is the average weight (25 pounds). So, you can let your client know that you’ll be invoicing based on the average (125 pounds in this case). The client agrees to pay based on the average and the invoice is processed.
Once the invoice is processed, your warehouse pickers identify five cases and find that the actual weight is just 119 pounds. This means there’s a -6 pound difference between the average and actual weight. Since this is within an acceptable range, the five cases of steak are packed and shipped.
Since the customer won’t be happy to pay for six pounds of steak that they didn’t receive, your finance department leverages your catch weight management system and bills the client for the exact weight (119 pounds). In the end, everyone is happy.
Who uses catch weight management?
Not every business or industry has use for catch weight management, but it’s extremely valuable under certain circumstances. In the protein industry – catch weight management is very important. You rarely work with standardized weights and you can’t afford to let the demand for accurate invoices slow down your supply chain.
Think about what happens when you don’t have a catch weight tracking system in place. Using the previous example, you would have to receive the order, manually check and weigh cases, relay the information back to the client, and then process the order. If the client decides that they need more or less weight, you have to restart the entire process. Compound this many times over on a daily basis, and suddenly your supply chain is moving at a snail’s pace.
Catch weight management is becoming a standard practice across industries that rely on weight. This includes virtually all food-related industries.
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