Clear-cut bonus for meat firm

The web-hosted software application from SignalDemand allows businesses - particularly those in the meat processing sector where the deconstruction of carcasses into many different meat cuts is carried out - to optimise their production and pricing mixes to maximise margins achieved.

The system has been specifically developed for use by manufacturers, although similar systems have been used in the retail environment for a number of years, claims SignalDemand. It allows manufacturers to weigh up the benefits of, say, incurring additional processing costs to add value that might or might not be reflected in additional price margins secured for those products.

Using SignalDemand's on-demand software application, Cargill's beef business is now able to use product mix and price optimisation to facilitate hundreds of thousands of pricing, production and product mix decisions every week. Other SignalDemand clients in the US are National Frozen Foods, Rich Products and Ventura Foods.

The software works by taking price and cost data and running this through a series of mathematical models or algorithms, which manipulate numerous complex variables so as to optimise demand-pricing decisions.

This technological approach is becoming even more attractive as input costs soar and price pressure from supermarkets intensifies, claims SignalDemand chief executive officer Michael Neal. "Most companies don't know where they are making their money," says Neal, who adds that while they might know their gross margins on items, the same is frequently not true for their net margins. "Knowing where you are truly making your money has a value," he says.

Signal Demand has set up a UK-based operation to handle sales to Europe. The facility is headed up by sales director Steve Neat, formerly with software supplier SAP. Two former Oracle sales people have also been recruited.

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