Source: BinSentry blog: https://blog.binsentry.com/how-to-utilize-data-to-drive-efficiency-in-feed-production
It’s been said one hundred times: it’s not only about collecting data but turning it into valuable insights to impact decision-making to increase efficiency and generate cost savings. In this first post of the BinSentry Food for Thought blog, Randall Schwartzentruber, CEO of BinSentry, interviews, George Slater, former Business Analytics Manager at Belstra Milling Co. – a feed manufacturer for large-scale sow farms, among other species – who shares how to utilize data to drive efficiency in feed production.
Randall Schwartzentruber: As a data analyst, you’re an authority on collecting data, understanding data, and presenting insights and performance recommendations to management for decision making and strategic planning to improve their operations. What would you say is the most critical dataset a feed mill needs access to in order to begin the journey of improving operational efficiency?
George Slater: Every feed mill will have a unique set of tools to operate efficiently as an independent business. What really sets a business apart, and one can argue most businesses, is when there is an intimate understanding of what their customer needs on a consistent basis. What I mean is that when a feed mill understands their customer (for instance: current inventory of animals, health and the condition of the animals, genetics and the rate of consumption, and the cyclical changes to animal production), a feed mill can calibrate the operations to be prepared to meet the demands of their customer. This is no small task as anyone knows, since this requires each business to trust one another with potentially confidential information, however, when two businesses make the leap to trust one another with internal data, this can help one another improve efficiencies, both can accomplish so much more!
Randall Schwartzentruber: One of the biggest criticisms of “Big Data” (and the sensors that generate that data) is that the data alone is not helpful unless it can be worked with effectively. How can a feed production organization use data effectively to drive increased efficiency at the farm and production levels?
George Slater: Feed production is directly linked to the animals that are fed, and in my experience, the data that proves to be most important is to have a thorough understanding of the variables that drive the volume of feed that is required to satisfy the production system. Whether it be hogs, poultry, dairies, or other ag producers, the rate of consumption and the demand for feed will change based on several factors. It is imperative that a feed mill identifies these drivers and builds the tools internally with their own analysts, or BinSentry who can provide the software and assistance to use the data that has been identified as key to improving efficiencies. Every business can easily be overwhelmed by all the data that is collected, information is abundant, it all comes down to finding what is most important and being very familiar with the drivers of the business.
Randall Schwartzentruber: Even when equipped with data, many mills and vertical integrators struggle to interpret and use data effectively. What advice would you give to a feed mill when turning insights into data-driven decisions?
George Slater: I truly believe that every business is as good as the people working for them. If you are a feed mill that has a business analyst/financial analyst/ or someone similar, lean upon your people to discover what needs to be improved and worked on and start building the data sets to intelligently assist your efforts to improve these areas of the business. If you do not have an individual or team to work on analyzing, researching, and investigating these insights, lean upon partners such as BinSentry, software, or other advisors to help support your operation and translate the data you have into the insights that you need to improve. Lastly, analysis and interpreting data, whether it be operational or financial, is truly a skill that is trained, I believe that people are the greatest asset you can invest in and support in a business, make the leap and make that investment if it has not been made already.
“Without technology, big data is essentially impossible to sort through, understand, and utilize in a business.”
Randall Schwartzentruber: What is the most significant impact you’ve seen when using systems that help manage orders and drive production efficiency?
George Slater: The most beneficial part of having a system to streamline orders is how much more information each business unit possesses. When all the facets of the business that are involved in the production, delivery, and scheduling of feed orders, operate with more information, the communication between business departments improves dramatically. The relationships of individuals working in the departments of transport, production, scheduling, and order entry will improve and people within your business will begin to have a better understanding of their colleagues’ challenges. When this happens departments and coworkers will then have the ability to help one another more effectively now that there is awareness of each other’s needs.
Randall Schwartzentruber:How do you move from identifying a lack of efficiency or an issue to taking action, and how do you think a good data system can help?
George Slater: Nothing will solve itself, build a plan with the leaders in your organization and prioritize the issue into tangible steps that a specific leader owns and follows through on. When data is utilized efficiently in an organization the leaders will have the resources to drill into the facets of the business that they need to understand in order to build this plan. In addition, the leaders in an organization are going to understand the real story of what is happening or what happened in the business. The leaders of the business will not have to guess, or use their gut to build a plan, which will rarely be effective and cost much more than the effort to utilize a data system effectively.
Randall Schwartzentruber: How does a lack of digitization of information in the feed industry create challenges for mills and producers in their quest for better productivity and efficiency?
George Slater:When a feed mill or livestock producer does not have anything to digitize the big data these businesses generate, the challenge will effectively be that they are not managing the small margin that these businesses generate. When producing feed and livestock, it comes down many times to nickels and dimes multiplied by millions of pounds whether it be feed, or the live-weight of a hog. In this industry there is no lack of information. Without technology big data is essentially impossible to sort through, understand, and utilize in a business. When a hog producer sells thousands of hogs a week or a mill produces several thousand tons of feed, the data sets begin to turn into an impossible chore to sort through manually. The simplest tool to use is of course Excel, but this does very little if you don’t have an individual to model the data proficiently for managers to filter and use in operations. The best investment a business can make in themselves is to thoroughly understand the “why” in their organization. These investments can be made in tools that automate your data to continuously add value to your operations, the challenge is of course finding the right tool that works well with your team and your business.
Randall Schwartzentruber: We have had the pleasure to collaborate with you during your time at Belstra Milling Co. What impact have you seen BinSentry have on that organization, and what impact do you see BinSentry making in the future?
George Slater: It was an amazing experience working at Belstra and implementing the BinSentry solution was one of the most challenging projects I worked on. Before the installation of sensors, the several business departments that work together every day had very little knowledge of what was happening out on the farms. Once we had sensors at our facilities communicating to us the rates of consumption, and continuous inventory of our bins, we were equipped to project the feed demand 24-72 hrs into the future. With an internal ordering platform built in-house, paired with the continued development of the BinSentry tools online, business at Belstra changed dramatically. With that being said, sensors don’t come without their own set of challenges, it is still a tool that has to be learned and managed, but at the end of the day and said simply, it has many more benefits than downfalls. The future of BinSentry is very exciting, the sensors are tough, and they work very well with minimal service needed. What will continue to set BinSentry apart will be the continued development of the online tools which will turn the hardware into a seamless actionable process to order feed.
I am so excited to see how BinSentry can change this headache of a farm chore into a sophisticated process that adds economic value to feed mills and livestock producers! When feed margins are thin, and feed costs for producers are 60%+ of total costs, the opportunity for an ROI increases dramatically.
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