SAP Solutions for the

Dairy, Meat & Fish Industry

 Global Trends

Global meat production has doubled between By 2050 the world population will approach 10 Until 2050 worldwide agricultural output needs
1977 and 2001 and increased 5x over the last half- billion people. By 2022, the population of India to double to feed the growing population and to
century. Moreover, until 2030 it is expected to will surpass that of China, and both countries will meet the demand for higher-value foods.
grow to a level 10x higher than 1950. have over 1.4 billion people

Source: Food and Agriculture Organization (FAO) of the United Nations, UNwater.org Source: United Nations, World Population Prospects Source: Food and Agriculture Organization (FAO) of the United Nations

Agricultural Production depends on natural New Opportunities from Changing Demand: The food supply chain’s banquet of risks:
resources: it uses 55% of non-forest land, 80% of Consumers are increasingly willing to pay a Product recalls, quality issues, tougher regulations,
total freshwater, 30% of fossil fuels. With growing premium for ensured food traceability, and new industry standards, rising costs: The industry
population calling for a steep increase of global certified food quality and safety. must adopt a “culture of quality”.
food production, to address food security, existing
agricultural practices need to become more Source: European of Food Science and Technology Source: The Supply Chain Brain

sustainable.
Sources: The Worldbank, Food and Agriculture Organization (FAO) of the United Nations

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Top 10 Challenges in the Dairy Industry

1. Milk in a inhomogeneous product

Dairy raw
2. Seasonal and regional supply variances material plan. Dairy
Sales Planning

3. High volatile milk prices

4. Low margin business
5. Raw material is the biggest cost factor Dairy
Milk
Plan to Produce
6. Raw material efficiency is key Reception

7. Subcomponents based planning Dairy

Costing
8. Analyze raw material loss
Dairy Milk
9. Accurate actual costing production plan Balance

10.Decoupled Business Processes

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Ingredients / Components determine the value of the raw milk
Due to dairy specific requirements

Quantity Value
Raw material Raw material
1kg = 1000g value ct/kg

Cream
Protein- Drink 35%
value Milk
Fat
Fat- 3.5% Butter
Protein 3.4 %
value > 82%
Fat 4.0 %
3,4%

Supply Demand
Balancing
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How to detect small figures with high value effects?

Milk Raw material Milk Milk Product

Raw Milk transport Filling Distribution
Receipt/issue inventory processing processing

Raw material ▪ Inventory ▪ Start-up ▪ Prepare ▪ Start ▪ B – Material

reception ▪ Tank- and Pipe ▪ Standardization ▪ Produce ▪ Fill ▪ Returns
▪ Raw Milk Cleaning ▪ Shut-down ▪ Change product ▪ Change package ▪ Destruction
▪ Concentration ▪ Intermediate ▪ Start-up ▪ Change product ▪ Damage
▪ Cream Cleaning ▪ Shut-down ▪ Shut-down
▪ Daily cleaning ▪ Clean ▪ Stop
Raw Material
outbound

Overall Companies Loss

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End-to-End Process Flow along the milk supply chain
SAP Dairy Management by msg for SAP S/4HANA Demand

Sales Orders Planning/ Forecast

Supply External Farmers

Cattle Breeding Calf Breeding Cow Keeping Production Planning Milk Raw Milk
Raw Milk Balancing Collection Planning

Whey + Powder Cheese Planning & Cream

Raw Materials Green Cheese Aging (Affinage) Milk Milk Receiption and Milk Payment
Purchasing Processing Quality Controll

Cream / Butter / Yoghurt Milk /

Skim Milk
Goods Receipt Integrated Production Control Human Capital Shop Floor Financials
Standardized Management Integration
Milk
I n te gr a ted Processes

Powder
Packaging
Invoice
Verification Controlling Product Safety Reporting

Outgoing Payments Warehouse Picking Shipping and Loading Transport Proof of Delivery Billing
Incoming
Payments

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Standard SAP S/4HANA Processes SAP Dairy Management by msg Other solution 6
SAP Dairy Management by msg for SAP S/4HANA – Overview

Raw Material Planning Production Activity-Based Costing

SAP Dairy Management provides an end-to-end solution for Dairy & Cheese Planning and
Operation & Costing that offers comprehensive functionality along the production processes

Analytics • Production • Labor & Production Equipment Management • Activity-Based Costing • Compliance
Native Technologies • Raw Material Planning • Implementation Tools

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SAP Dairy Management by msg for SAP S/4HANA – Fiori
Dairy-Specific Usage of SAP Fiori

SAP Fiori UI
▪ Improved user
experience by
personalization and
simplification
▪ Direct access to relevant,
user centric information
and data entry points

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UI = User Interface
World-class execution, analytics and monitoring with SAP Dairy Management
Comprehensive & Dairy-Specific Reporting

Fiori Smart Business Reporting

▪ Create your own operational reporting using Smart Business Modeler Apps
▪ Create your own KPIs
▪ Core Data Services views for reporting with predefined CDS data models

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CDS = Core Data Services | KPI = Key Performance Indicator
SAP Analytics Cloud
Availability of additional Reporting Content on SAC

• Use advantages of the central cloud analytics solution combined with dairy-
specific key figures and processes

• Provided content on SAP Analytics Cloud by msg systems ag

• Raw Material Plan Balance
• Activity-Based Costing Analysis

• Get a first impression of the new reporting possibilities

Visit us: SAP App Center

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SAC = SAP Analytics Cloud
Affinage
Cheese Handling JAN FEB MAR APR MAY JUN
Requirement Receipt

PUSH PULL

Cheese: Buying / Production Requirement / Sales

Dairy

Own Production Purchasing Affinage / Aging Finished Products

Individual Aging Information

▪ Periodicity of inventory postings Benefits
▪ Aging loss for each period
Value in EUR ▪ Automatic adjustment of weight
▪ Process costs on batch level
▪ Correction of remaining weight
stocks at the end of aging
process
▪ Optimization of default aging
0 1 2 3 4 5 months
loss information
▪ Reporting functionalities
Weight in KG
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Customer Example

Emmi chose SAP, because their product perfectly serves the needs of the dairy industry.

Source:
https://www.youtube.com/watch?v=2EnXbzBTH4s

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Dairy Management Customers … so far

Largest dairy Largest dairy Largest dairy Largest dairy One of the Exports to 55 Largest dairy
company in company in company in company in largest branded countries all company in
Germany Switzerland Saudi Arabia Canada dairy operators over the world Israel
in the US

“” We are pleased that SAP has added this innovative solution to its solution portfolio. SAP Dairy Management by msg is a key part of our
SAP strategy. This ground-breaking industry application sets the cornerstone for ensuring solid performance, innovation, growth and
lasting success.
Heinz Hodel, former CIO, Emmi on leveraging SAP Dairy Management by msg
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Further Information

https://help.sap.com/viewer/p/SAP_DAIRY_MANAGEMENT_BY_MSG_FOR_SAP_S4HANA

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SAP Meat and Fish Management by msg
Overview
Common Situation at Meat Industry Companies – Challenges
Due to meat specific requirements

Fragmented business processes Lack of cost transparency

Excel based planning Planning not connected to execution

Lack of product traceability and material control

Heterogeneous IT-landscape Less process automatization

Own development Shop floor disconnected

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Meat Industry Business Models

1 2 3 4

Livestock Prepared
Slaughtering Disassembly
operations Food

Full supply chain operation Traditional Company Combined Company Specialized Company
▪ Own livestock production ▪ Purchase of livestock from ▪ Execute two following steps of the ▪ Only livestock
▪ Contracted farmer contract farmers value chain for all animal categories production
▪ Own fields and feed mills ▪ Production of fresh meat parts, ▪ Livestock operation and ▪ Only slaughtering
products and prepared food slaughtering ▪ Only disassembly
▪ Fresh meat, prepared food
▪ Selling to retailers, traders, hotels, ▪ Slaughtering and disassembly ▪ Only further processing
▪ Retail operations
butchers ▪ Disassembly and further processing

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End-to-End Process Flow along the Meat Supply Chain
SAP Meat and Fish Management by msg
Demand

Sales Orders Planning/ Forecast

Contract Farmers
Supply

Feed Mill Broiler Production Livestock Slaughter

Pullet Breeder Management Hatchery Grow out Planning Reception Planning
Management Egg Production

Raw Materials
Purchasing Further Processing Disassembly Sorting Slaughtering Slaughtered
Stock Settlement

Goods Receipt Integrated Whole bird Human Capital Shop Floor Financials
Production Control Sales Management Integration

I n te g r a ted Processes

Invoice Packaging
Verification Controlling Product Safety Reporting

Outgoing Payments Warehouse Picking Shipping and Loading Transport Proof of Delivery Billing Incoming
Payments
SAP S/4HANA
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SAP Meat and Fish Management by msg
18
End-to-End Process Flow along the Meat Supply Chain
SAP Meat and Fish Management by msg
Demand

Sales Orders Planning/ Forecast

Contract Farmers
Supply

Cattle Breeding Dairy Farming Calf Breeding Young Bull Production Livestock Slaughter
Fattening Planning Reception Planning

Raw Materials
Purchasing Further Processing Disassembly Sorting Slaughtering Slaughtered
Stock Settlement

Goods Receipt Integrated Production Control Quarter-Carcass Human Capital Shop Floor Financials
Sales Management Integration

I n te g r a ted Processes

Invoice Packaging
Verification Controlling Product Safety Reporting

Outgoing Payments Warehouse Picking Shipping and Loading Transport Proof of Delivery Billing Incoming
Payments
SAP S/4HANA
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SAP Meat and Fish Management by msg
19
End-to-End Process Flow along the Meat Supply Chain
SAP Meat and Fish Management by msg
Demand

Sales Orders Planning/ Forecast

Contract Farmers
Supply

Feed Mill Sow and Boar Sow Management Piglet Breeding Pig Fattening Production Livestock Slaughter
Breeding Planning Reception Planning

Raw Materials Further Processing Disassembly Grading and Slaughtering Livestock

Purchasing Sorting Settlement

Goods Receipt Integrated Production Control Half-Carcass Human Capital Shop Floor Financials
Sales Management Integration

I n te g r a ted Processes

Invoice Packaging
Verification Controlling Product Safety Reporting

Outgoing Payments Warehouse Picking Shipping and Loading Transport Proof of Delivery Billing Incoming
Payments
SAP S/4HANA
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SAP Meat and Fish Management by msg
20
End-to-End Process Flow along the Fish Supply Chain
SAP Meat and Fish Management by msg
Demand

Fishery Sales Orders Planning/ Forecast

Supply

Fingerling Production Fish Harvest

Parents Breeding Production of fish spawn Final grow up
produktion planning receiption Planning
fish spawn

Raw Materials Classification and sorting

Purchasing Further Processing Disassembly Harvesting Harvest stock
settlement

Goods Receipt Integrated Whole Fish Human Capital Shop Floor Financials
Production Control Fresh sale Management Integration

I n te g r i e r t e Prozesse

Invoice Packaging
Verification Controlling Product Safety Reporting

Outgoing Payments Warehouse Picking Shipping and Loading Transport Proof of Delivery Billing Incoming
Payments
SAP S/4HANA
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SAP Meat and Fish Management by msg
21
Solution Overview – SAP Meat and Fish Management by msg for SAP S/4HANA

Supply Planning (push) Production Planning Demand Planning (pull)

▪ Livestock Procurement Planning ▪ MRP Planning (Make-to-stock, Make-to-order) ▪ Demand Planning
(Kill forecast) ▪ MRP Calculation (cut list) ▪ IBP integration
▪ Scheduling, Further Processing, Disassembly
Livestock
Livestock Livestock MEAT Production MEAT
Operation
Operation Procurement Slaughtering Disassembly Further Processing Distribution

▪ Livestock operation ▪ Livestock Reservation ▪ Meat inspection results ▪ Disassembly Master ▪ Data Recording ▪ Labeling
structure ▪ Livestock Reception ▪ Slaughter data capturing Data (cuts & cut lists) ▪ Recipe processing per ▪ Picking
▪ Animal Data base ▪ Slaughtered Stock ▪ Control of slaughtering ▪ Execution of tank ▪ Packing
▪ Animal Transfers / Settlement process optimized ▪ Weighing strategies ▪ Shipping
Movements (based on animal data) ▪ Carcass sorting based disassembly plan ▪ Controlling Further
▪ Cost transparency on Quality ▪ Automation of Processing
goods movements
▪ Cutting controlling

Cross Components (Core)

▪ Stock type specific processes like poultry, pig, beef, fish, …
▪ MEAT specific Master Data (e.g Material master data, Cut list, …)
▪ Batch Traceability (From farm to fork with animal ID)
▪ Catch Weight Management CWM: Two independent units of measure (e.g. piece and kg)
▪ Data Capturing and Machine to Machine communication
(FOM, Scales, machine control systems, MII, IoT, …)

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Overview of Meat Specific Business Logic Production
Planning
Disassembly - Balancing (Push/Pull) for all animal categories
Demand
How many animals fits to the demand?
Push X Number of animals available Pull
Supply

Which parts are long/short? How to optimize?

Which criteria? Demand
Supply

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Planning Logic
Production
Planning

Supply Planning (push) Production Planning Demand Planning (pull)

Livestock Livestock MEAT Production MEAT
Operation Procurement Slaughtering Disassembly Further Processing Distribution

Cut List
Bill of Material Supply (reverse BoM)
Demand Bill of Material
Requirements
Day old Chicken Chicken
Breast Breast pick
chicken carcass warm carcass cold

Animal feed Head Cooling loss Leg Label pack

Broilers Broilers
Vaccine Feet Back Foil deliver

… Giblets Wing
Packaging
Material settle
Slaughtering
Chicken
Cycle based loss Disassembly
order Breast packed
planning

Production Production Production

order order order

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Overview of the Chicken Supply Chain – Cycled based Production Pullet Egg Broiler
ManagementProduction Hatchery Grow out

Pullets Broiler

Eggs

Feed
Chicks
Feed
Broiler
Pullets
Eggs
DoC
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Outcomes of Meat Companies working with SAP Meat and Fish Management
From the region Speed due to
Use the whole animal Competitiveness Business Requirement
for the region fresh products

Heterogeneous, partly out-

Planning not connected
Cost intransparency
Lack of Product
of-date systems and Challenges
to execution Traceability fragmented processes

Planning mostly Excel Values not

based and not connected to
Process Breakups Inefficient Processes
integrated into supply material flow
high manual effort Lack of transparency
and demand high Effort

Enhanced
Profitability

Accurate production Cost and margin Homogeneous master data

Total transparency a
planning: Match visibility: Reports support, end-to-end
few clicks away
supply with demand – showing critical areas processes, less
Quality based
reduce waste – in real time, providing interfaces and systems,
Material control
increase yield faster insights for modern technology
better decisions.

Harmonized, fit for the

Balancing Real time cost
Product Traceability future System- and Process
Outcomes
Transparency Landscape

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Customer Example

Micarna drives speed and operational excellence with SAP

Source:
https://www.youtube.com/watch?v=9oT5ueCz2yw&list=PLdzEJoB6CqJ9xZe26fSqmEh8XiLmIqIiX&index=1

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Further Information on SAP Homepage

Product

Documentation References

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Thank you.