How to Manage a Feed Mill?

Managing a feed mill is a dynamic process that is ever changing and evolving. The demands are changing: people have changed; the business environment has changed. Government regulations have changed; and the global economy has changed. All of these combined with scarcity of resources, such as skilled labour, are forcing feed mill managers to continually improve their management practices in order to manage the demands of today's feed production productively and effectively.

A Feed Mill Manager wears many different hats. Naturally, they are directly responsible for the manufacturing of feed, but they are also often responsible for transportation, quality assurance, safety, environmental, engineering, maintenance, purchasing, human resources, office management, accounting, community relations, sales and nutrition. Primarily, you have to make quality feed, safely, on time and of course, at the best cost. Considering all these hats, it's often easy to forget which one(s) he is wearing at any particular time of day. No matter the size of the plant or the corporate structure which it fits in, the Plant Manager is expected to produce results in the core areas of production, quality, costs, safety, housekeeping, and human resources.

Manufacturing

Just in time or JIT. It would seem that feed mill management invented the term. Most feed mills only have about one day of inventory to work from and never seem to have enough inventory capacity built into the designs. To complicate things even more, our customers often demand their feed “yesterday.” A manager and his team have to manufacture feed to meet the constantly changing needs of a customer. The customers change, breeds change, genetics change, environmental concerns change and ingredients change. The feed mill manager needs to stay abreast of technology available to meet the demands of feed milling today.

Manufacturing at the lowest cost is an objective that is often taken for granted. A term It expects the manager to make prudent and profitable application of capital funds, and it looks for wise use of the purchase and installation of equipment that is labour saving, maintenance free, reliable and offers flexibility for future developments. The company must rely on people to protect those investments by proper maintenance, good housekeeping, and the physical protection of plant property. It also expects the team at the feed mill to help gain a competitive edge by continuously improving ways of reducing costs while improving product quality and customer service.

 Manufacturing the required quantity of finished products in time to meet customer demands is fundamental and is one responsibility with many obstacles to success. The late arrival of ingredients, absenteeism, bad weather, power outages, equipment breakdowns, late orders, quality issues all conspire to disrupt a day's schedule. The manager must use leadership to foresee and overcome any disruption to meet production schedules and motivate the employees to get the work out in spite of difficulties that arise. You must be prepared for potential obstacles and play “what if’ should a problem occur. The manager must set an example, using leadership skills to foresee and overcome the obstacles to meeting production schedules and to motivate the team members to get the work out in spite of the difficulties. First, failure in this area of responsibility can cause the loss of customers. And secondly, livestock, poultry, and pets are dependent on the feed you produce. For the integrated producers the simple goal is to never let livestock or poultry run out of feed.

Another production responsibility of the manager is to accurately determine the production capacity and capability of the plant so that the company can make profitable decisions regarding sales and marketing strategies. Misleading or over-estimating the capacity of the plant, either in total capacity or in the variety of products that it can effectively produce, can result in erroneous marketing decisions or running over capacity which can and will sacrifice quality. For production capacities, time allowances must be made for equipment downtime, cleaning, preventative maintenance, and other non-productive hours. You have to leave some time for catching up should a significant obstacle occur!

Quality

Management needs to establish an attitude in the organization that reaches well beyond laboratory test results. It is how we do our job right the first time and learning from our mistakes. Ask yourself, “why is there always time to do it over but never enough time to do it right”?

One must establish a program and a philosophy of product integrity and excellence that commits the entire organization to manufacturing products using standard operating procedures, each time they are produced, without shortcuts or individual deviation. Avoid setting precedents of allowing substandard quality feed go out the door. If employees see that action they may think it is acceptable in the future.

One area that challenges any feed milling operation is pelleting and pellet quality. At times is seems as if it is more of an art than a science. Pelleting cost and quality management can be one of the most contentious processes in the mill.

Business management and the customer typically want it all: low cost feed with spectacular pellet quality. The simple choice is run the feed through the pellet mill to meet the daily tons on the schedule and reduce costs incurred by the feed mill operations. The other choice is slow the pellet mills down to produce quality pellets. Both save money, but they do so in two different ways. One reduces mill operating costs, thereby feed cost, and the other may be expressed in feed efficiency improvement.

If you save 10 TL per ton in manufacturing cost on 250,000 tons feed manufactured per year, the saving are about 2,500,000 TL. Managers can do this by increasing throughput, reducing plant or supervisory labor, reduce fuel cost, maintenance and repair or capital cost for example. If you save 66 calories of feed conversion by improving pelet durability by 30 PDI, the annual savings is over 30,000,000 TL on a 1 million bird per week complex using today's feed energy costs. Body weight and feed conversion were significantly enhanced by pelleting and positively correlated with pellet quality. To achieve this it may take slowing throughput, increasing fuel cost and electric cost, higher die and roll cost as well as increasing labor costs.

“Sometimes you have to spend money to make money” is a phrase often used. This phrase can be said for ingredients, maintenance, equipment, parts, staffing or processes. That does not mean one should not always be looking to reduce costs where you can without compromising quality. In the pellet quality aspect as above, increasing costs to produce higher PDI's generated a higher return for the company.

Instilling respect for total quality and continuous improvement is a heavy demand on abilities of a manager, but is extremely important. It is a responsibility management can’t ignore. Customers steadily grow more demanding of quality performance, more sophisticated in evaluating feed quality, and more willing to hold the feed supplier legally liable for the cost of issues caused by deficient quality. With feed representing the highest percentage of production cost, performance and feeding efficiency is paramount to profitability. Legal liabilities in feeding livestock and poultry can come from food safety concerns via consumers. Food safety is paramount.

Costs

The requirement to produce at the lowest costs or within budgetary guidelines is the most obvious element of the manager's cost responsibility. When the plant cannot produce or deliver at the manufacturing or trucking costs that have previously been agreed upon by sales, manufacturing, and general management, the company may find its profits significantly reduced, if not eliminated altogether.

Another cost responsibility of the manager is to prepare or to be actively involved in the preparation of operating budgets for all plant functions such as production, maintenance, and trucking, then control expenses within the limits of those budgets throughout the year. The manager faces the task of creating a cost and value consciousness throughout the organization and a system ofworkable controls.

Company management, generally, is no longer willing to accept the once a year crash program for cost reductions that were maybe done in the past and may still exist in some companies. They expect managers to set up result producing, continuing programs of cost control. Further, cost predictions from a carefully planned and executed program are included in the company’s overall profit projections and management has every right to expect those predictions and projections to be on target.

Finally, the manager must be involved in the company’s capital expenditure program. The manager should make recommendations for new plants and equipment to expand production, to reduce costs, to improve quality and customer service, to meet regulatory requirements, and replacement of worn out equipment. The manager has the responsibility to protect investments in existing facilities with sound maintenance practices.

Housekeeping

The manager's responsibility for good housekeeping is critical, especially in the feed and other grain processing and handling industry. Safety is impossible in a plant that allows spills, dust, and debris to accumulate. Dirty surroundings are where attitude and efficiency of the workforce are lowered if the plant is not clean. Dirty surrounding also threatens product quality. Housekeeping is not a sporadic “clean up” function to be performed when there is not much else to do or when there is a notice that visitors are coming. Housekeeping is an on-going activity and assignments for specific areas should be given to employees. Rotate the housekeeping assignments periodically to provide a fresh perspective for employees. Make it known that a dirty plant is one ofyour “pet peeves” and will not be tolerated. A manager should not be afraid to get dirty.

A sharp manager realizes that the plant is often visited by upper management, customers, and regulatory agencies who may know nothing about feed mill operations but do know a clean plant when they see one. Their judgment on housekeeping is offen on the management of the facility whether we like it or not. Important impressions are based on how the plant appears.

Transportation

Many managers have transportation as part of their job description. Trucks, rail, barge and ships carry both incoming and outgoing shipments. As with all the other parts of a manager's job, on time efficiency and best cost are a very important part of transportation. Opportunities to continually improve costs and customer service are ever present, as are the challenges of safety, regulations and maintenance. There are many resources available to managers covering the various modes of transportation. State and federal departments of transportation, trade associations, industry periodicals, internet web sites, and networking with industry peers are some of the many ways to learn about transportation issues.

Maintenance

Feed manufacturing continues to evolve. It is a competitive, complex and highly automated industry with sophisticated equipment and processes. We are constantly trying to move processes from an “art” into practical science. An important aspect of feed manufacturing is maintenance. Operations require us to meet customer's needs, on time and at the lowest cost while increasing efficiencies. Having reliable, trouble free manufacturing and transportation is critical to success of any operation.

Today there are many tools available to help manage maintenance. Programs are available to help you track preventative maintenance, work orders, repairs, parts and labor, employees and costs. The programs can be as simple as a manual paper program or as sophisticated as a computer program that tracks actual equipment run time in your feed mill and generates work orders based on that run time. Records should be kept by maintenance that contains information about specific pieces of equipment in the plant, parts records for parts in inventory, parts lists for equipment, vendor information, and job records that describe maintenance that should be done a specified intervals.

Whatever system the manager employs, it takes a concerted effort to learn the feed mill thoroughly and an understanding of what downtime or poor maintenance costs the company. Feed milling equipment and facilities are expensive. Capital has been expended to improve labor efficiencies and product quality. A poorly maintained operation can lose the advantage of the labor saving equipment if maintenance is ignored.

In summary, it's better to get the fundamentals right compared with chasing new technology. Once you have the basics in great shape, then new technology can really take your production to the next level. The point is, review the basics before chasing a fad or new trend. If you do not have the feed management fundamentals all in place, you may miss a core problem. Keep it simple then go to the more complex issues. There is a wealth of opportunities in feed manufacturing that we should be considering.