Delivering the Perfect Cut Every Time. With AI.

Carcass value optimization is a critical process in the meat processing industry. It involves maximizing the value of each animal by producing the optimal mix of primal, subprimal, and value-cut products that meet the market demand and specifications. In today's dynamic market, with changing consumer preferences, environmental regulations, and animal welfare standards, maximizing carcass value is becoming more critical than ever for meat producers to stay competitive. By maximizing carcass value, meat processors can gain competitive advantages such as increased revenue, reduced waste, improved quality and consistency, and enhanced sustainability. For example, a research project by Colorado State University found that optimizing beef carcass value based on primal cut prices, consumer demand, and processing costs could increase the value of an average carcass by $50 to $100.

A maze with billion combinations

Because of the complexity of the meat value chain, driven by the vast number of possible cutting and processing combinations for each carcass, it has been challenging to make optimal decisions. In general, there are three main challenges that meat processors need to consider:

1. Value chain complexity. The value chain is a constantly moving set of gears, where isolated decisions have both up- and down-stream consequences. With variables and parameters creating billions of possible combinations at any point in time, it is crucial to have a system that can comprehend the complexity with a clear understanding and visibility of the consequences.
   

2. Uncertain demand & supply. Forecasts are always uncertain, and inaccuracies have an enormous impact on production effectiveness and profitability. At the same time, the value chain is constantly changing based on supply, demand, and production possibilities, creating a high risk of building up an undesired stock of raw materials and finished products when satisfying short- and long-term demand.
   

3. The (sub)optimal utilization of animals. Making optimal value chain decisions that positively impact production costs, demand satisfaction, inventory levels, labor constraints, and profit margins is crucial for meat producers. Deciding on the right quantity of animals to process is challenging. Processing too few animals can lead to short orders, higher fixed costs, and underutilized labor. Processing too many animals can result in unwanted inventory, higher supply costs, lower sales prices, and lower margins.
   

Too basic for the industry’s complexities

Currently, traditional methods to optimally utilize the animals and maximize carcass value use know-how based on written and unwritten rules combined with Excel or industry-agnostic production planning software.  

Excel is undoubtedly the most successful and widely used business intelligence software ever created. But its ability to incorporate data from various source systems needed for a complete overview is a significant constraint to optimizing production planning. Additionally, even if data were to be extracted, prepared, and delivered into Excel, the vast amounts of computer power needed to run through the various scenarios to reach the optimal plan would push the computing power of any system. To be able to run through the calculations requires computing power only available through cloud computing.  

Production planning software goes a step further than Excel by helping to pull insights based on inventories and previous production plans and orders that need to be fulfilled. However, systems like these have significant limitations in discovering optimal production plans. For example, they fail to take into consideration yields, prices, freight rates, etc., which significantly impacts profitability for meat processors. Additionally, there is a limit to insights that can be gained from such solutions. Since the meat industry is unique in terms of the constraints and rules that producers are under, it can’t be expected that general planning software would be able to account for these.  

This is where artificial intelligence (AI) solutions come in to help meat producers optimize carcass value.  

The power of combining AI with industrial expertise

By utilizing AI, meat producers can achieve numerous benefits. For instance, AI can help to enhance the quality and consistency of meat products by identifying the best cuts for different types of meat. This not only helps to improve customer satisfaction but also increases the premium value of the products. Additionally, AI can provide real-time insights into market demand, allowing producers to adjust their production accordingly. This reduces the risk of overproduction and underproduction, ensuring efficient use of resources and minimizing residual products.

However, AI itself is not enough. The meat industry is complex and heavily regulated, with unique challenges and requirements requiring specialized expertise. To truly optimize carcass value in the meat industry, AI needs to be combined with industry expertise and knowledge to ensure that the technology is tailored to the specific needs and demands of the industry. By combining the power of AI with industry expertise, meat producers can unlock the full potential of carcass optimization and maximize the value of each animal.

My company, Völur, has created a solution that uses AI to improve planning and scheduling by supporting decision-making on the sorting and cutting processes and suggesting the right raw materials to use in value-added or processed products. With deep technical and industry knowledge, Völur’s solution is a game changer for the industry.

The solution enables meat processors to maximize the value of each carcass, ensuring that they deliver the exact market demand. Völur provides processors with an optimal production plan that enables higher utilization of animals, demand satisfaction, and revenue increase while reducing inventory levels and waste.

Takeaways

Carcass value maximization is crucial for meat producers to remain competitive in today's market. AI and tech solutions offer an excellent opportunity to optimize carcass value, improve quality and consistency, and enhance sustainability.  

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