What is catch weight Management in food industry?
In food manufacturing, some aspects of inventory management, sales, and distribution are easy to track and manage: In a case of 24 jars of mayonnaise, for example, where each jar contains 32 ounces of mayonnaise, a customer buying a case will get 768 ounces of mayonnaise, no matter what case is used to fulfill the order. There’s no variability in either price or weight from case to case.
For other types of foods, such as meats, produce, and cheese, variability in weight comes into play. Foods such as papayas and frozen turkey vary in size, so no two bushels of papayas or cases of frozen turkeys will have the same weight of product, even if they have the same number of items. The variation in weight might not be large, but a few percent either way can add up.
This situation can cause problems for food wholesalers and their customers. Wholesalers stock and sell their products by the case, bushel, or other large base unit of measure, but retailers typically sell these variable-weight products by weight. If they pay the same price for each of two cases, but one case weighs 5 pounds less than the other, it complicates their cost-of-goods-sold calculations and affects their margins.
To address this situation, the industry came up with the concept of catch weight. Food wholesalers and distributors use catch weight extensively to manage these variable-weight products.
What Is a Catch Weight?
What is catch weight? In food businesses, a catch weight is simply a parallel unit of measure used to manage variable-weight products. The catch weight unit is the unit that represents the actual weight of the sales unit for a particular item. Consider an example:
- A wholesaler advertises cases of 100 frozen chicken thighs at 55 cents per pound, with a nominal (average) weight per case of 50 pounds. The average weight is based on the wholesaler’s experience and gives the customer an approximate idea of what to expect.
- A grocer calls the wholesaler and orders two cases of chicken thighs. At order time, the actual weight (and therefore the price) of each case is unknown, because chicken thighs vary in weight and the particular cases to fill the order haven’t been picked yet.
- At fulfillment time, the two cases are picked and weighed. The weight value of each case is the catch weight for that case, and it’s used to calculate taxes and shipping charges and to invoice the customer.
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How Can I Manage Catch Weights In My ERP System?
In the mayonnaise example above, unit conversions are straightforward: One case (the base unit of measure) equals 24 jars, and each jar weighs 32 ounces. Pricing can be managed at the case level because each case contains the exact same amount of mayonnaise.
For variable-weight items and other catch-weight products, it’s a bit more complicated, because pricing has to be managed using a different unit of measure (pounds) than the inventory unit (cases) used to stock the product and fulfill orders. There’s no direct, consistent conversion factor between the two, so they have to be tracked separately; there’s no getting around the fact that these products use two units of measure.
Fortunately, catch weight management is built into a number of ERP systems, such as IFS, Microsoft Dynamics AX, and SAP. Catch weight management in an ERP system simplifies the task of accurately tracking and reporting inventory and sales of products that can vary in size.
IFS has particularly robust catch weight functionality. The IFS catch weight management features enable food industry wholesalers and distributors to define catch weight units and weight classes at every point in the supply chain. Although catch weight management in SAP is also quite robust, SAP catch weight can be more complex to manage, and in any case SAP’s costs are typically beyond the reach of smaller food businesses.
At Corning Data, we have extensive experience working with every level of the food industry. We are a dedicated service and resell partner of IFS, and our consultants are experts in setting up catch weight management functionality to best serve your needs. If you are in the food industry and are struggling with catch weight management issues, contact us today to learn how an IFS solution can help you.