Savings through eCommerce

While eCommerce may not be a word commonly associate with agribusiness, one Australian family-owned meat company, using eCommerce standards in their business, has delivered significant efficiencies and real savings.

Meat and Livestock Australia (MLA), a producer-owned company promoting the quality, safety and nutritional value of Australian red meat, in Australia and globally, is working to develop a competitive advantage for the industry through the red meat supply chain.

To this end it has initiated a number of projects with the industry, endorsing the use of eCommerce standards and the uptake of the GS1 System. Collectively these projects cover cattle production, meat processing, transport, domestic and export distribution.

The premise of the GS1 System is that by introducing standards to supply chain identification and communication, all trading partners will understand the standards used – essentially everyone will speak the same language.

The GS1 System identifies trade items or products using Global Trade Item Numbers (GTINs) based on global standards. These are internationally unique numbers assigned to each different variant of an item, which are then represented in the bar codes we are most familiar with at the checkout in retail stores.

In fact, however, these numbers, or globally unique identifiers, can be used in many more ways to provide trading partners with an accurate and quick way of keeping track of, and managing, their products all the way along the supply chain. In the meat industry, where traceability and maintaining the cold chain is critically important, this can give businesses a competitive advantage.

MLA partnered with the Australian Meat Processor Corporation (AMPC) and Nolan Meats to apply the GS1 System in the red meat supply chain and eliminate paper-based systems. AMPC is the national body representing all processors active in the red meat processing industry and Nolan Meats is an Australian, family-owned company and an integrated producer, wholesaler and distributor of beef. The company owns feedlots, a processing plant and off-site cold storage.

To carry out the project Nolan Meats needed to implement GS1 Numbering and Bar Coding, and implement electronic messaging (eMessaging) systems within its own operations as well as with its trading partners.

The project was based on three stages:

  • a review of the company’s systems and determination of benchmarks;
  • the implementation of existing systems and equipment to use GS1-compliant numbering systems; and
  • the implementation of eMessaging systems based on global standards.

Nolan Meats directory, Tony Nolan, said the audit of the company’s system (in which communication between trading partners was largely paper based), identified areas needing improvement, particularly the double entry of data.

As part of the process, the time and costs that would be saved at each data point were identified to give a framework to the improvements that could be expected.

The company was using their own product codes on products, but by switching to the GS1 numbering system and using it for eMessaging, they could significantly reduce the number of paper documents processed.

“The GS1 System demonstrated the potential to combine National Vendor Declarations, Meat Standard Australia declarations and National Feedlot Accreditation Scheme declarations into one electronic format,” Nolan said.

“It can also notify consignors of the receipt of cattle electronically, send producer feedback, generate electronic Meat Transfer Certificates, send consignment information to major customers and distributors, and receive notification of receipt of goods by customers.”

The audit identified that the GS1 Bar Codes needed, would be significantly larger than the existing product codes and that the GS1 Numbers and old product codes, would need to co-exist in the system for a period of time. This necessitated the need for equipmentand data systems to be able to handle both simultaneously.

Consequently a number of issues needed to be addressed:

  • Labels needed to be redesigned to provide for the larger GS1 Bar Codes;
  • New labels would be required for both slaughter floor (hanging labels) and boning room (carton labels);
  • GS1 Global Trade Item ]>Numbers needed to be allocated to products;
  • Software needed to be modified and upgraded to handle the new GTINs and the co-existence of the original product codes and new GTINs;
  • New printers were required to print the new labels; and
  • Staff training in the new systems and product identification would be required to ensure a smooth implementation.

With the GS1 Bar Codes, systems and labels in place the company then moved on to implementing eMessaging and communicating between different sites and with other companies. The ultimate goal of the new system was to allow Nolan Meats to replace the paper-based system with a wholly electronic system.

To do this a number of documents needed to be redesigned to fit the new systems and provide traceability for the product through the supply chain.

With their decision to implement eMessaging, Nolan Meats found the flow of information to be much faster, allowing data to be sent ahead of loads, removing double data entry from the supply chain.

The system of eMessaging is based on email, giving it a simple and universal interface, while requiring very little bandwidth. This makes it suitable for communication with rural producers on dial-up lines.

Nolans Meats found that implementing these systems not only reduced operating costs and eliminated paper documents, but improved the accuracy and timeliness of data internally as well as the company’s interaction with suppliers and customers.

According to the company, overall benefits derived included the timely arrival of accurate data, standard descriptions and numbering between organisations, reduction in data input errors, and reduction in use of paperwork and forms.

GS1 Australia is a neutral, not-for-profit organisation that registers and issues bar code numbers in Australia so no duplication of numbers can occur.

There are significant benefits to the meat industry in moving to an eCommerce environment. These include:

  • Reduction in labour for National Vendor Declaration (NVD) preparation at the feedlot
  • Reduction in labour for kill agenda preparation
  • Reduction in labour at lairage
  • Reduction in record-keeping costs
  • Less manual data-entry errors
  • Reduction in labour for
  • Meat Transfer Certificate (MTC) preparation
  • Improved reconciliation between shipment and paperwork
  • Reduction in labour for filing paper forms
  • Increased inventory accuracy
  • Increased traceability.
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