FEED Management Systems Inc. (FMS) recently announced that it has added a critical new intelligent functionality to its Pennent Mill Manager Advanced Purchasing Module that provides feed manufacturers with a 360-degree view of all of the hidden — or "landed" — costs included in every ingredient they purchase.
Hidden costs can add up to 80% to the final costs of any ingredient, according to FMS, and the new function captures the costs and provides options to preserve margins and set pricing.
FMS said the landed cost may be an eye-opener since this is a new concept for the feed industry.
"A generic view of landed costs is available within some ERP (enterprise resource management) platforms in use by feed manufacturers, but none offers the specificity and depth of intelligence afforded by the FMS Landed Costs for Pennent Mill Manager Advanced Purchasing Mode," the company said in a statement.
The new system allows feed producers to track in real time the true and actual costs of an ingredient, including freight, fuel charges, warehouse fees, customs, utilities, taxes, finance charges and insurance.
"This real-time insight provides greater decision-making flexibility, such as whether to substitute a more competitively priced ingredient or when to recognize the financial impact of these costs," FMS noted.
"We are focused on delivering actionable intelligence to our customers. With landed costs, that means exposing all of the invisible charges that are buried in an ingredient's cost," Brad Guyer, global operations portfolio manager for FMS, explained. "This knowledge is power to a feed manufacturer who can now substitute a cost-competitive ingredient at that point in the process and retain the same margin and selling price for his finished feed."