Understanding SAP Catch Weight Management
Do you know "How Many T-Bone Steaks are in 100 Pounds of Beef"?
My dad always said a 'pint’s-a-pound the world around'. You ever wonder what that means? You may not even have heard of it. What he was saying is that 1 Pint of Water weighs 1 Pound, all over the world. It was a Unit of Measure problem, and as it turns out, not one-hundred percent correct (but real close).
Unit of Measurement (UOM) Errors Are Common
What this is, is an example of a fixed conversion factor. Within any computer system, getting your Unit of Measure (UOM) correctly converted is a key task, and, surprisingly, something that isn’t always straight-forward.
Fuel Weight Management
Fuel conversion, for example, depends on many factors, such as altitude and temperature as well as the type of fuel. As a C-130 Flight Engineer, this was a daily conversion task I performed. Today, it is all computerized.
Food Businesses Affected
One of the more interesting conversion problems exist within one of the world’s oldest professions (no, not that one), i.e., agriculture, specifically, cows, think Bessie the Cow.
Bessie the Cow (Image Courtesy of Creative Commons)
Typical UOM Scenario
You may know Bessie as a T-Bone Steak. What’s important if you are a producer of T-Bone steaks or a meat distributor, is something called Catch Weight Management.
What is Catch Weight Management, You Might Ask?
Imagine the following scenario: You ship 100 pounds of T-Bone Steaks from the U.S. to say, Puerto Rico. How many T-Bone steaks are in a hundred pounds of beef? Might be 10, might be 9, might be 20. In other words, the UOM conversion factor is not actually fixed or fixable.
Common Food Industry Challenge
This problem of an unfixed UOM conversion factor appears at all stages of the beef production process. The Dairy Farmer who eventually decides that Bessie just isn’t putting out like she used to and decides to sell her to the slaughter house, the slaughterhouse that has to decide how many T-Bone steaks to make out of the meat, to the frozen meat distributor who has to open every box and count them when they arrive, and many points in between, all have the problem of how to answer the question of “How many T-Bone Steaks in 100 Pounds of Meat”?
Did You Know Meat Evaporates
To make solving the problem even more challenging, turns out the meat evaporates at variable rates during shipment, and not only do you encounter UOM conversion differences between how many T-Bone steaks are in any given 100 pounds of meat, you find that 100 pounds of beef shipped may turn into 90 pounds of received meat. Say what? That is right, meat evaporates and goes who knows where.
Catch Weight Management in SAP
To manage this problem, which exist in a variety of industries, not just agriculture, there is a solution called the SAP Catch Weight Management Processing Solution, which is in use all over the world.
However, to handle this problem in SAP BW, you require some special processing to really understand the data that comes out of such a complex set of conversions.
Catch weight products predominantly use two units of measure:
- Inventory unit: Refers to the unit of measure in which the product is sold, received, transferred, picked, and shipped.
- Catch weight unit: It refers to the unit by which the item is weighed and invoiced.
SAP Catch Weight Management Functionality
SAP Catch Weight Management Functionality is a solution that tackles the complex problem of managing catch weight products, which is prevalent in the food processing and other industries. The challenge lies in the fact that the unit of measure (UOM) for catch weight products is not fixed or fixable, leading to discrepancies in weight and quantity during shipment and other stages of the production process. SAP Catch Weight Management offers a way to manage this problem by using two units of measure:
- Inventory Unit
- Catch Weight Unit.
Please see the previous paragraph for a more detailed explanation of these two UoMs.
Warehouse Management Implications
Due to the varying relationship between the actual weight of a product, the average weight (also called the nominal weight) of a product and exact weight, there are various enhanced functionalities that are provided by SAP. For example, pricing for chicken breast often vary, as witnessed by the consumer, even though they are sold as a package of 4 wings, yet the weight varies, and thus the price varies.
Point of Sale Integration
In our chicken breast scenario above, a typical retailer will have to use IP aware weights & scales, which, in-turn, are integrated with their Point-of-Sale (POS), such that when the price tag is attached to the package of chicken breast, the Barcode which is generated, is actually unique to that package.
Product Pricing
Another business area impacted by variable unit of measurement relationships is product pricing. While there are many variations that occur within the retail environment, one of the common ones that must be dealt with are quantity based price breaks. While small weight variations may not seem like much, on an individual transaction level, multiplied by thousands or millions of transactions, losses can add up quickly. SAP allows you to model such scenarios.
SAP Customer Activity Records (CAR)
SAP Customer Activity Records (CAR) is a powerful tool that can help businesses manage their catch weight products more efficiently. By tracking every point of sale (POS) transaction, SAP CAR can provide detailed insights into how catch weight products are being sold and managed, allowing businesses to identify areas where they can improve their processes and reduce waste.
Speak With Catch Weight Management Experts
Dealing with catch weight management scenarios is one of the more challenging problems out there, so if you are facing such an issue, you can save some time by talking to someone who has already ran across and solved this somewhat rare UOM issue.
Where have you run across the Catch Weight Management issue?
More reading:
8 Secrets to SAP Enabled Spend Performance Management
Learn What Tools To Use To Investigate IS-Mill Functionality
Leverage SAP BW to Increase Supply Chain Inventory Accuracy
BusinessObjects Explorer Best Practices
