Is your protein business using a software solution to manage trade spend? If not, we’re sure you’re tiring of the limitations associated with email chain approvals and Excel program documentation… let alone the organization required to manage claims and billbacks.
And even if you do have a software solution in place, you should keep reading.
It’s very possible that your application is not properly designed to meet the demands of the highly volatile and margin-constrained protein industry. We’ve seen these issues before. Don’t worry, protein-savvy solutions do exist and your business can start reaping the benefits now instead of later.
Protein processors and manufacturers need an end-to-end trade application that keeps pace with rapid market price changes; a trade promotion management application that facilitates (and improves) budgeting, planning and decision-making.
When considering options in trade promotion management capabilities, ask these 3 critical questions:
Question 1: How does the application handle volatile pricing?
Commodity products require a TPM solution designed to manage change very well.
If your pricing changes monthly, weekly, or even daily, you’ll need to know if the application you’re evaluating is equipped to automate those critical changes. You shouldn’t have the headache of searching for month’s old market prices and matching them to past discount conditions before making your payments. And applications that automate payments are out there, so ask about it.
If the application has the following features, you’re off to a good start:
- Workflow automation
- Automated price adjustments that update daily
- Auto pay
- Auto rollover
Question 2: How much room for error is there in the application’s margin calculation?
When margins are tight and you have the wrong TPM application (or none at all), approving discounts turns into a guessing game. Ordinary TPM solutions use averages and plugs in the program assessment. You don’t know exactly what the margin is. That’s right. You don’t. And attempting to create the accurate P&L in Excel is time consuming and bears the risk of human error.
It’s critical that you know the exact margin in the volatile protein industry.
When exploring your options, find out if the application you’re evaluating offers a perfect-margin P&L. Does it take into consideration all programs that impact the deal at hand? Does the financial analysis offer a true and accurate margin? And can you play around with it? Does the application let you mess with the program financials in a “what if” template? Sometimes you want to explore various scenarios and “what-if” features allow you to do so within the application before finalizing the deal. There’s no room for error with thin margins.
You’ll also want to know if the application has the following protein-friendly features:
- Detailed margin page with precise financial accuracy
- Formula pricing
- “What-if” P&L
- Catch weight functionality
Question 3: Has the application been proven by others in the protein industry?
If the TPM solution provider doesn’t have a stronghold of customers in the protein industry, that can be a red flag.
The features of the software may not be designed to ideally match the industry needs. Ask the provider who their protein customers are. Why did those customers choose to use the application in the first place? How are they benefiting now that use the system? Software providers should be able to point to many successful implementations with protein customers and should willingly direct you to contact those customers to learn first-hand about their experience.
As the premier provider of TPM solutions to the world’s best protein producers, Blacksmith Applications is happy to boast a customer portfolio of top names in the industry. Smithfield Foods, Tyson Foods and Pilgrim’s converted from their legacy trade management systems to FORGE TPM and have significantly reduced unauthorized deductions and value the synergy of the application’s interface to their organizations.
With the right software, you’ll see a clear path to improving business process and profitability.