Meat processors, like most businesses, work hard to cut costs, hoping to improve their bottom line. But while cost cutting can sometimes improve profits, too often it doesn’t get us very far. So what can? Research with small plants in Iowa indicates that increasing throughput — sales less raw materials — is almost three times more effective at raising profits than cost cutting.
Now, that’s easy to say, but harder to do. Most folks think it’s impossible to put any more meat through their plant. Sometimes that’s true. Yet often small changes can significantly improve your bottom line.
In these short articles, written by Nick McCann with Iowa State University Cooperative Extension, you’ll learn about useful and practical strategies that some small plants have used to increase throughput and profitability.
Many plant owners turn away business in the busy season because they think they’re at capacity. Shifting to daily slaughter can help ease that bottleneck and allow you to grow your business.
A proactive, not reactive, approach to managing inventory can help avoid stock-outs that lead to disappointed customers.
How to improve your wholesale profits? A small plant that went from one delivery per week to three per week and receiving orders multiple times per week saw its sales increase 75%. The retailer had better, fresher product on the shelf and wasn’t ever out of stock. Same truck, same people, same operation.
How can you decide whether to focus on beef or hogs — or game? How many of each will maximize your plant’s profitability?
In this presentation, Nick McCann draws on Goldratt’s Theory of Constraints to analyze and solve common problems in small meat processing facilities. He suggests what may sound like a radical idea: making everyone work all the time is unlikely to make your plant more profitable.