In this guide, Foods Connected explores how investing in a procurement solution can help save your business supply chain costs and deliver sustained savings.

When it comes to livestock procurement, there are many factors that influence supply, including market changes, disease outbreaks, declining herd figures and the weather to name a few. All of these present their own challenges when it comes to driving cost efficiency across meat supply chains. To mitigate this impact, organisations in recent years have seen the value of using digital procurement and purchasing tools. 

Typically, these tools have come in the form of siloed procurement management systems (PMS), contract management systems, or sourcing and procurement automation solutions (SPAS). Today, procurement tools have become much more integrated and designed to automate and digitise the entire procurement process, from sourcing to contract management, order placement and performance review.

Companies that implement these smart procurement solutions can gain significant cost savings and drive long-term value. In fact, according to research from Aberdeen Group, organisations that invest in procurement solutions can see a return on investment of up to 25%. Learn how Foods Connected’s livestock procurement solution drives cost efficiency.  

What is livestock procurement? 

Livestock procurement is the process of sourcing animals like cattle, pigs and chickens from farms or suppliers. It involves price negotiations, transport arrangements, and ensuring livestock quality and safety standards are met. 

What are some of the challenges of livestock procurement? 

Market fluctuations

Unstable market demand, trade policies, and tariffs often affect livestock prices and availability. For example, if consumer interest shifts towards plant-based proteins, demand for certain types of livestock drops, impacting procurement strategies. 

Environmental impacts

Droughts, floods, and diseases can severely affect livestock health and availability. Outbreaks like avian flu can lead to sudden shortages in poultry products, impacting procurement. 

Animal welfare standards

As consumers demand ethical sourcing, procurement teams must ensure suppliers meet strict welfare standards, requiring certifications and transparent audits. 

Disconnected systems

Traditional procurement systems often lack integration with production and inventory tools, causing inefficiencies and data silos that lead to over- or under-ordering. 

Regulatory compliance

Meeting varied national and international regulations requires thorough documentation and adaptability to sudden changes in standards.

How digital tools improve livestock procurement 

Integrated & automated systems 

Digital procurement tools provide seamless integration between procurement, production, and inventory systems, giving a holistic view of the supply chain. This reduces supply errors and overstocking and allows real-time data sharing across teams. For example, insights on market trends and weather patterns help procurement teams adapt their sourcing strategies more effectively.   

Cost savings & efficiency 

Automation streamlines repetitive tasks like managing contracts and shipments. This reduces labour costs and improves accuracy. Data analysis can also uncover cost-saving opportunities - for instance, insights into market pricing and livestock health data can help manufacturers identify the most cost-effective suppliers. 

Compliance & traceability 

Digital systems guarantee compliance by automating documentation and record-keeping, simplifying audits. They also allow quick identification of the sources of each batch of livestock. For example, traceability features help companies verify that all sourced livestock meets animal welfare standards and that suppliers remain transparent in their practices. 

Adapting to market changes

Data-driven insights help procurement teams forecast market trends and adapt sourcing plans accordingly. This allows flexible and responsive procurement strategies - if consumer trends shift towards smaller portions of meat, procurement can adjust sourcing to favour the right livestock sizes, preventing waste. 

In conclusion, digital tools in livestock procurement address traditional challenges by providing automation, seamless integration, real-time information to drive faster fact-based decision-making and improved compliance. This helps businesses prepare for market changes and environmental challenges while upholding ethical and sustainable sourcing standards. 

A centralised supplier management approach in livestock procurement 

In today’s business landscape, regulatory compliance is a key issue for all industries. This is particularly true in the food industry, where large-scale recalls are commonplace. In such industries, procurement teams have long been tasked with validating and verifying the source of materials and services. They also must manage supplier relationships, including tracking and audits. 

Businesses can link their supplier compliance, food safety and quality, product specifications and sustainability to their livestock procurement function using the Foods Connected fully integrated supply chain management solution.

They can then benefit from real-time visibility of which suppliers are approved and compliant to supply, and apply exclusion zones to supplier maps in the case of disease or recall. This allows your business to manage risk more efficiently, and only compliant suppliers remain on your approved supplier list.

Smart pricing grids 

Using the pricing grid feature, your business can procure the right quality of raw material at the right price, with penalties applied to products that fall outside your desired specifications. The pricing grid tool is fully customisable, enabling your business to specify exactly how penalties or bonuses are applied when livestock are graded. The user-friendly tool has an inbuilt grid approval process and facilitates comparison of grids and duplication of grids – All of which is actionable at the click of a button. 

Active pricing grids can be linked to contracts for longer-term agreements or directly to an order that is placed regularly with your farmers. This provides your business and your farmers with greater transparency over the pricing process, as the parameters are clearly set out from the beginning and centrally accessible by all parties to refer back to. 

When the livestock are processed, the relevant pricing grid is used to automatically calculate the final price to be paid to the farmer. A full summary of which categories animals fell into on the grid is also available for review, providing valuable insight to inform future purchasing decisions. 

Streamlined contract & order management 

Whether your business agrees long-term contracts with suppliers for animals in feedlots or completes spot bookings a week or two in advance, our livestock procurement solution has the capability to manage your requirements. 

With it, you can create, share and manage your livestock procurement negotiations and agreements from one central location, including information on delivery period and price with the relevant pricing grid and quality parameters interlinked. Once a contract agreement is finalised, the data will be accessible within the Order Manager, allowing a purchase order to be issued seamlessly. 

Once livestock are received into the lairage, details can be recorded against the booking to help generate a kill agenda and when the animal is slaughtered and graded via the pricing grid, the weight and quality data can be sent from your ERP system against the Order to calculate the payment due. Farmers can be notified by email with their Livestock feedback and due payments, and the system can provide an RCTI if required. 

Access to real-time analytics facilitates comparing supplier offers and reviewing historic negotiations and agreements to guarantee you always get the best possible deal from the most suitable supplier. 

Identify gaps in the supply chain 

Gain real-time visibility over stock control and forecasting of what product is required, where and when with our livestock procurement suite. So, you stay one step ahead of the game on any outstanding livestock volumes. Livestock volumes that have been forecasted but not yet acquired, can be automatically assigned to a new negotiation template within the purchasing manager. This will allow you to begin a new contract negotiation process with alternative suppliers to identify gaps in supply early on to limit supply chain disruption. 

Leverage market insights & reporting 

Market data analysis and reporting help to keep your business up to date on market changes, compare supplier pricing and create internal reports on the impact of our livestock purchasing decisions on overall primary processing production as well as profit loss performance. 

Foods Connected have collaborated with Mintec, an industry-leading provider of global market-published commodity pricing data. Mintec data covers more than 14,000 food and packaging market prices across 650 commodity types, covering 18 different food and non-food categories. The integration between the two systems will provide buyers with the ability to combine their live purchasing negotiation data with an extensive range of market data for insight and benchmarking to make evidence-based decisions. 

Enhance your food quality standards with Foods Connected 

Using digital solutions for livestock procurement improves supply chain operations and significantly reduces expenses, driving businesses towards sustainable growth. As part of our supply chain management tools, Foods Connected offers meat processing software to optimise livestock procurement and create full-custom meat production models. Request a demo to find out more.