Are your feed operations adapting to the increased volatility of the markets, or are you just reacting and hoping for the best?
To succeed in today’s markets requires more than having the latest “real-time” information system. You need the business processes in place to turn data into actionable intelligence.
A feed manufacturing business today requires an information system that provides up-to-date information on inventory levels, ingredient costs, market prices, and hedging or other risk management plans.
It is a lot of data to manage.
Today, a large percentage of companies spend too much time entering and maintaining this data and not enough time using the information to make business decisions.
You need a system that streamlines the data collection process and presents the information to management by eliminating duplicate entries of data while utilising Business Intelligence (BI) tools that transform the relevant data into actionable intelligence.
A real-time inventory system will help you adapt to changing market conditions, but your competition is doing the same thing.
How do you differentiate yourself? You need to gather additional data and have the business processes implemented to use that data. Think outside the box! The following are just a few ideas that can advance your business.
Opportunity or alternative ingredients
Your purchasing department needs to work closely with the nutritionists to stay current on the availability and costs of opportunity or alternative ingredients. If your producers only provide you with the production formula, work with their nutritionists to open up the formula specifications to allow opportunity ingredients.
Your customers should be thinking in terms of lower cost per pound of meat, not just lower cost per ton of feed.
Frequency of process
How often are you updating ingredient costs? How often are you re-pricing your products? Your systems and business processes should support weekly, even daily price changes to keep pace with the markets. You need to set expectations with your customers as well.
How often do you optimise your formulas? You should be able to optimise weekly, and efficiently get the new formulas to production.
Do you know which customers and products are the most profitable? This information makes pricing of your products more efficient and can reduce the number of products you offer. It may be better to drop a product with a small margin and concentrate on the more profitable products. There could be customers that are not worth keeping – especially if the cost of servicing them is greater than the revenue you receive.
Eliminate duplicate entries. This saves time and helps eliminate errors. Integration provides the capabilities to increase the frequency of formula changes, price changes, and production schedule changes.
Many feed companies today look at the volatile markets with fear and trepidation. The most successful companies will look at the markets as an opportunity to excel.
Which company are you?