Profitability is complex, By Dr. Christine Alvarad0, a Senior Food Scientist for Prosur.

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Quality and travel have become less synonymous. There seems to be a significant decrease in comfort and quality and a significant increase in costs compared to a few years ago when quality mattered over quantity.

During the holidays, I was traveling to Texas to pick up my kids and bring them back to New York to enjoy the snow. I was delayed out of Albany for four hours for incorrect paperwork to allow the plane to fly legally. There were no other flights for four and a half days on any airline out of Albany. We had to rearrange our schedules several times and I never made it to Texas. My kids had to fly by themselves part of the way as unaccompanied minors, which I had to pay extra for, and they were unable to sit in the seats I purchased. In addition, they were the last off the plane, which almost made us miss our connection, except there was a maintenance issue with that plane also. There was a very high cost and no “quality” consideration in my travel over the holidays.

Thankfully, I was not flying on Southwest Airlines. That was even more of a disaster. I am hoping that no one reading this had to experience that mess. What happened to create all this craziness during the busiest time of the year? We can always blame the weather and the huge storm that ripped across the Midwest. But if we dig a little deeper, it seems that the storm may have been the last straw. It may not have been the cause of the crazy, but merely the result of long-term decisions based on financial outcomes instead of decisions based on operational and quality outcomes.

I see these decision patterns too often in our industry, as well. When I started in this industry 25 years ago, many of the business decisions made were based on operational parameters, with a priority on quality. Today, I am going to bet that decisions are based more on financial standing of the shareholders. Is that a bad thing? Not necessarily, unless there is not balance between the two. Purely financial decisions are not in the best interest of any company. Quality, safety, and operations should always be included with corporate financial considerations.

In today’s world, many companies are governed by accounting and procurement instead of operations and quality/food safety. How many times do we make decisions based on actual cost of “the product” (ingredient, equipment, antimicrobial, etc.) versus cost benefit of use and quality/safety of the finished product?

We tend to become narrowly focused on profitability, in terms of yield or on pounds produced. A great example is yield improvement during carcass chilling. This carcass yield gain is unaccounted for after chilling (not true yield gain) because it is lost during cut up and further processing. Since most of our products are further processed, why are we considering this carcass yield increase important to our business? There is a current disconnect between understanding a short-term numerical yield improvement and long-term functional yield gain.

I have seen many businesses find the balance among operational parameters, safety, quality, and financial/profitability. It can be done. But it takes a cross-functional team made up of members throughout the entire operation, not just procurement and accounting, involved in making these decisions. There is a science to profitability. When we choose to ignore the science and just use numbers for decision making, we lose sight of what’s important — quality, safety, AND profitability.

Here’es hoping that 2023 brings us all better quality and safety of travel, and brings our industry more insight to the science of profitability.