Margins: Why You Must Focus on Maximizing Yield
On Tuesday, Walmart confirmed it will order USDA Choice-graded beef for all 3,800 of its U.S. stores, adding the higher grade product to the Select-grade beef that has dominated their cases until now.
When the world’s largest retailer boosts demand like that, it makes an impact. Beef packers are now struggling to meet the sudden uptick in demand, and margins are being squeezed as they turn to higher cost cattle to satisfy the buyer’s requirements. Ironically, they are struggling to make a profit when demand is higher than ever.
You can see a variation of the material-cost theme happening in the tree nut market with pecans, where processors are facing a double-whammy of short supply and increased demand from China. When demand is higher and material supplies are lower, the result is the same: manufacturers struggle to fill orders and see their margins squeezed tight by higher costs. It’s a major issue in the food and beverage industries today.
With raw material and commodity costs volatile and climbing across many industries, the same thing can happen to any manufacturer, in any industry. And since there is a limit to how much additional cost can be passed on to the consumer, companies are wondering how to get ahead. The answer: you must focus on eliminating waste and maximizing material yield.
Check out Tuesday’s webinar: The Top Five Ways to Improve Margins and Control Yield Loss.
Webinar this Week: Industry Focus on Profitability
This week, I look forward to hosting IQity’s first industry-specific webinar on Thursday, June 30, at 11 am EDT, entitled How Poultry Producers Can Profit in Challenging Market Conditions. This eye-opening webinar represents two things that are unique about IQity Solutions and our flagship business application, IQ-Fusion:
First, this one-industry focus demonstrates the business knowledge that IQity brings to the table that sets us apart from many of our competitors. At IQity, operations experience came first, a quarter century of it. After building our careers working in manufacturing plants, we applied next generation technology to create IQ-Fusion, the solution we knew was needed. In other words, our software arose directly out of the needs we identified from our work in industry. And we’ve built pre-configured industry templates, so whether your industry is food or pharma, or any other manufacturing environment, you can be up and running in a few short weeks.
Second, IQ-Fusion was made expressly to solve the problems that you grapple with every day. Its ease of use and practical application to real-life operational problems is something that sets it apart, and something you’ll see more of on Thursday. Analysts and professionals who know our industries and who know all the competing softwares tell us that no other solution combines both the breadth of enterprise monitoring with the same depth of data collection that we do, all served up in visual interface that is as easily understood on the shop floor as it is in the executive offices.
Taken together, this unique blend of industry knowledge and technical expertise makes us a new genre of business partner: one who knows your problems and can offer you the right blend of professional guidance and new technology to solve them. Whether your field is poultry or not, I invite you to join us at Thursday’s webinar for a glimpse at how we work. Talk to you then!
Memorial Day
Today, you might be joining me and millions of our compatriots in a great American tradition: The Memorial Day Cookout. If you’re like most of us, you have an array of items on your grill – steaks, burgers, hot dogs—and of course, chicken.
Here at IQity Solutions we love chicken, and not just because it tastes great with my family’s secret barbeque sauce recipe. We love it because we’ve worked side by side for more than 27 years with the hardworking folks who raise and process those chickens for us – the leaders and employees of companies like Tyson, ConAgra, and Pilgrim’s.
You may have seen the recent article in the Wall Street Journal and in Morningstar about the challenges facing American poultry producers in today’s market. The economic headwinds of oversupply, underpricing, and commodity costs comes as no surprise to anyone in the industry. As the article’s author reminds us, most companies are at a stalemate, trying to wait out unfavorable market conditions and just survive the storm. But I know something the Wall Street Journal doesn’t know, and now you will, too: poultry producers have another option. Its name is IQ-Fusion, and my company invented it. (Forgive me if I sound proud, but it’s a day for American pride!)
Poultry producers can’t control driving economic forces, but they can control their own operations. Now, despite years of advances in automation technology, we still don’t see producers making the most effective use of the technology, equipment, and people in their plants. Why? Because they haven’t had a way to connect what’s going on in their plants with their desired outcomes in real-time. (They also don’t realize how much opportunity is at stake. But that’s a subject for another post….)
IQ-Fusion delivers, once and for all, a real-time, meaningful connection between business outcomes and plant performance that reveals exactly where operational improvement opportunities lie and how much each one represents in dollars. What that means is a powerful and efficient new way to reduce conversion costs. And in a market where poultry producers are facing long-term losses for months or years at the mercy of outside forces, IQ-Fusion opens the door to achieving profit within one business quarter. Like a secret barbecue sauce recipe that transforms plain chicken into a sumptuous feast, IQ-Fusion has the ability to transform any poultry operation from typical to exceptional.
So as I reflect on Memorial Day, I realize that IQity Solutions and our innovation, IQ-Fusion, is a classic example of American ingenuity and hard work. I for one am grateful to live in this land of opportunity that has allowed me to make my vision a reality. On this solemn and proud holiday, please join me in honoring those who have fought for and served this great country and who gave us the freedom we all enjoy to pursue our dreams.
And later, as you stand around the grill with friends and family, give a nod to the producers of the finger-lickin’ feast on your table. Save me a drumstick. Thanks, guys.
