Production planning and management - Agribusiness Management - page 331

6. Establish effective record-keeping procedures that document the HACCP system.

7. Establish procedures for verifi cation that the HACCP System is working correctly.

Unique issues with agricultural products
Special problems inherent in the production of agricultural products infl uence many of the
decisions involved in operations management including the choice of plant location, method
of transportation, and scheduling. Two such problems are seasonality and perishability . (A
more complete list of these factors was presented in Chapter 1 . )
Agribusiness supply fi rms are engaged in highly seasonal production processes.
During the peak planting and harvesting seasons, facilities are often strained to the utmost to
produce the services and products producers need to utilize in a very short period of time.
While the manufacture and processing of farm supplies is scheduled as evenly as possible
throughout the year to maximize effi ciency, lack of suffi cient storage to accommodate
peak season needs places tremendous pressure on production facilities as they struggle to
keep up.
Perishability is in some ways related to the problem of seasonality. Of course, fruits and
vegetables are highly perishable and must be processed quickly to prevent spoilage. At the
same time, some of these products are so highly seasonal that processors, canners, freezers,
and packers are left with virtually idle facilities after a peak season. Some industries have
evolved successful ways of counteracting this dual problem and the tomato industry is one.
Storing tomatoes in aseptic, non-refrigerated, stainless steel vats effectively eliminates prob-
lems of deterioration. Operations that produce tomato products are now able to run consist-
ently for 12 months of the year without fear of spoilage, thus reducing costs during the peak
season and increasing productivity in the off-season. Fresh tomatoes can be shipped across
the country in aseptic railroad cars, which produces signifi cant savings in transportation
costs.
Yet another typical problem of agricultural products is bulk ; the costs for shipping bulky
loads of oranges from Florida to the Pacifi c Northwest can be extremely high. Handlers must
also wrestle with the physical problems of storing bulky products as they await processing
or shipping. As with most such problems, this diffi culty is also refl ected in costs.
Variability in quality and quantity must still be managed in the agricultural industry
although consumer demand for consistency has had signifi cant impacts in this area.
Processors, canners, and freezers of lobster and shrimp, for example, must weigh and dif-
ferentiate among fi sh of unequal quality. Apples and other fruits are sorted using near infra-
red technology on the basis of size, shape, and color. Eggs and milk must be graded, as are
many other products. In some cases, product weights must be standardized to fi t certain-size
packages or selling weights; this can sometimes produce waste.
A fi nal diffi culty experienced in the production of agricultural products is variation in
value . Price effi ciency demands that production managers manufacture outputs with the
highest possible value consistent with the costs of production. A dairy processor may fi nd
that cheese has a higher market value than milk for table consumption; but if its value is only
one-third more than that of milk, and it requires twice the production cost, then price effi -
ciency tends to favor producing the milk. Because there is such a wide variety of value in
agricultural products (in different cuts of beef, for example) this is an important area
for agribusinesses to explore. This infl uences decisions related to product mix, which were
discussed earlier in Chapter 7 .