Fish and seafood processing – cost modelling and yield management

One of the unique features of our fish processing software  is that it only allows you to book output if it’s correct. Our OCMs ensure that the batches are changed at the right time, as they are constantly calculating the yield.

If a piece of salmon which weighs 5kgs, you might expect to get 2kgs of fillet from it. Therefore, for 500kgs of salmon at intake, the OCM will predict the processing at 200kgs of fillets.

Sometimes they might be getting a better yield so it will allow them to do it but, predominantly, it’s a check to ensure they don’t start booking the next batch of fish against the wrong production run.

For example, at Seachill, they’ll buy in the fish in boxed with ice in it and record the supplier weights. Then, there are two parts to their production:
They issue the fish into the first part of the process, according to the weight from the supplier; the fish is then de-headed, gutted and filleted. Other processes may include skinning, pin-boning, square cuts, dependent on what product is planned for the day.
The tray (or kit) of mixed fillets is booked as work in progress (WIP) on our system and the actual weights of the fillets are captured (as opposed to original supplier weight). The filleted product is issued in a production line. At this point our software is keeping track of the balance for what’s been issued (using a trace ID) and what weight results after production and after it’s been packed and sealed. If the weight exceeds the expected amount then that’s when we stop production.
Within cost modelling we set up the cost of whole salmon against filleted output and the product codes. For instance, measuring the differences in yield – skin on (when the yield will be better) or skin off, square cut. The level of trim is weighed (“the frame”) and captured. In terms of sustainability, every part of the fish will be sold – everything will be found a home.
As we also integrated to the weight price labellers for fish, there’s additional information that must be stored as validation that everything they are doing is legitimate, i.e. the catch method details – whether it was line caught or trawled, whether it was farmed, and the area of the catch. We capture all this detail. The operator chooses from a list, on the OCM, that’s acceptable.
For specialist processes, such as smoked salmon, process is the same up to the point of the filleted product. The trays of fillets will be issued to a smoking process and afterwards it is smoked the fillets will be weighed and booked as a smoked product.  Again, cost modelling will feature a different yield for smoked products as the weight will reduce.

Fish processors always pay at market rate; the market rate is subject to extreme volatility. For instance, fish prices can change by £1-2 per kg a day dependent on weather. Using formulae, dependent on what has been the cost of the fish determines how much they are going to sell finished product for.
We can also set up product substitution, where the yields will be different, and measure the giveaway for fixed weight.
The relevant accreditations/approval certificates will be provided whenever the fish is bought in. These will be scanned in on a flat-bed scanner and stored as part of the document management.  Against any of the purchase orders any of the scanned PDF documents can be accessed.

Processing fish and handling payments bought directly from fishermen
Some fish processors will pay the Government fees on behalf of the fishermen (as the fishermen will not have the facility to handle the payments) and then charge the fees back to the fishermen. We capture all this information and process the payments.

Yield management for shipments bought direct from boats

However, the biggest challenge is when the processors buy shipments straight off the back of the boats. The container will be a mix of fish, seafood, ice and water. It’s too big a task for the processor to check through it in advance and any extra handling would damage the fish and delay processing.

After intake and as the fish is sorted during processing, each catch type is keyed in using the OCM. The data for the filleted product is then uploaded to inform the purchase order detail.

Example:

if sea bream is within the mixed box, it will be booked against the main purchase order. We’ll work out, through cost modelling, the ratios, i.e to produce 1kg of filleted sea bream, 3kg is required. We then write back to the PO 3kg of sea bream.

Through cost modelling, we reconstruct what fish should have come in compared to what they’ve been able to produce.  The fishermen send an estimated invoice for what’s been caught, and that’s the compared to what’s been booked on the actual PO on our system. If the yield is proven to be poor then the fishermen will receive a lower payment.