One of the upcoming trends in the world of food ERP is the phenomenon of Catchweight. Catchweight in Lehman’s language is defined as “approximate weight” used by food manufacturers and distributors to manage products where an individual item’s actual weight varies from the standard (quoted) weight.
For catchweight products, there are two units of measure i.e. inventory unit and a catchweight unit. The inventory unit is the unit in which the product is received, transferred, shipped and sold. On the other hand, a catchweight unit is the unit of measure by which the product is weighed and invoiced. Bear in mind, standard weight is generally defined for the inventory unit to account for variance. This way it is easy to determine whether a recorded actual weight is within tolerance limits or not.
Catchweight processing is usually done for high value food items. The primary rationale behind this is that the cost associated with tracking catchweight goods is quite high. Not to mention high value food items tend to vary in size and weight. A classic case of this being put to use is by seafood traders and seafood processors. For ages, seafood traders and processors undercharged owing to the wear and tear of the product from production to selling point and the resulting weight cut the product went through. Seafood items like fish and poultry tend to shrink in weight with time. It is for this reason catchweight has become a prerequisite for seafood traders. For seafood traders owing to catchweight get a fair price for their product portfolio.
Catchweight has a whole host of benefits. By targeting the variance in standard weight and actual weight, catchweight ensures a fair market value for customers and seafood traders alike. Catchweight also supports dual units of measure such as that of inventory (in inventory unit) and invoicing transactions (in catchweight unit). Recording actual weight at the time of shipment ensures value for money for all customers. Not to mention, customers can order in blocks and pay per-pound. With this level of transparency and accountability, catchweight truly has its worth weight in gold.
However, the concept of catchweight did not come without its set of challenges. Traditionally, food manufacturers did catchweight processing manually. The standard weight and actual weight were recorded in excel. This made the process slow and error prone. As a result, not only it reduced operational efficiency and increased costs but also failed to meet compliance requirements set in by the government. To add fuel to the fire, making catchweight a labour-intensive task resulted in more production and processing investments both in terms of time and money. Imagine if a big customer wanted a small change in weight for an order? This would mean starting the production process for that order all over again.
What do we do?
The solution to this is food ERP. With food ERP, data is recorded with tolerances defining tolerance percent and ensuring catchweight item falls within the range of values. With automation, recording of data happens speedily and error free. The pricing is done transparently and becomes flexible and scalable. Not to mention the added advantage of lot tracking through food ERP that avoids wastage and optimizes operational efficiency.
To speak volumes of our recommendation let’s look at a case of seafood ERP. Imagine being a seafood trader for marine snail abalone, the most expensive seafood of the world. Let’s say the trader sells the abalone in ten-pound cases. Bare minimum, the variance in each case would be an ounce or two. Do you think the company that sells the marine snail abalone can afford to lose an ounce per order? Multiply the loss per order to the thousands of orders. Not only losses but unhappy customers who demand transparency and value for money would bring the company down. Here comes seafood ERP to the rescue. With cases sold at actual weight at the time of invoice, the customers know they are paying for the weight of the product at the bill counter and seafood traders charge for each ounce they sell. A win-win for all. Another popular example in this regard is the trading of lobster tail. How is it priced? The answer is seafood traders charge the lobster tail based on its size (weight) and its quality.
Seafood traders and processors are stuck between the devil and the deep blue sea. On one hand are the strangling government compliance requirements and on the other are demanding customers, changing their taste and preferences in the blink of an eye. The only way for seafood traders to stay afloat in this business is to sail on the catchweight boat. For if profit is the name of the game, then catchweight is how you will keep score and seafood ERP is how you win.