Food processing margin management

The problem

Having full control and understanding of costs is essential in such a price- sensitive sector. Unfortunately, businesses find it difficult to account for all the fluctuations, complexities and variants associated with food processing.

Analysing costs when supplying different specifications to a number of customers can often leave processors guessing their margin. The tracking of credit back values need to be considered, as well as other factors, including waste, promotional activity, price adjustments, new product development and specification changes. This leaves little time for cost analysis, meaning problems are often identified when it’s too late and profits are dented, or losses have been made.

The solution

Integreater® provides a detailed breakdown of costs, automating calculations to ensure that processors have continuous, accurate and up-to-date information.

Product specific benchmarks can also be set to measure and compare results against. This helps processors to avoid overspending, allowing them to understand if and where they can make cost savings.

The application works by using a hierarchal structure to include prices from the initial raw material, right through to multiple finished products. This incorporates each stage of the processing flow, as well as credit back values.

Ingredient prices, packaging prices and product specifications are simply imported. This allows users to view existing price and cost, matched to actual and forecast sales volumes. Additional specifications or costing models can be easily created and users can also view margin by product and product group. Sales price, costs and margins for both their actual or forecast sales volume can also be easily analysed. This gives the overall weighted average margin of the business, as well as the weighted average margin by customer and product group.

Integreater® allows users to easily adjust margins to their desired position, enabling them to view the sales price that will need to be charged in order to achieve their goal.

The result

Management gain complete understanding and control of all their costs. They are able to identify where they are making a profit or loss and understand the reasons why. Integreater® provides a total understanding of the implications that any changes will have on overall margin. This is particularly useful when negotiating prices and planning promotional activity.

Download Margin Manager factsheet