IN recent years, I have encountered many companies that were strategically investing in business operations technology in an effort to connect their organization. Their goal is to achieve better visibility, directional decision-making and, ultimately, higher profitability.
I fully expect this trend to substantially increase in the near term. Why? Because advanced technologies and processes are commonplace at high-performing companies, leaving laggards with shrinking profitability. The global feed industry is no exception.
Feed industry leaders see this shift occurring, but most companies are hesitant to make a move. That's because technology purchases represent a substantial investment of capital — both financial and intellectual — and few organizations are confident that they know exactly how or where to start.
Admittedly, the first step is always the most difficult, but to ensure that your organization can effectively sidestep the minefields — and there are many — the most critical decision you make will be choosing the right partner.
I say "partner" because the organization you choose to help transition your company must be intimately involved with your business on a day-to-day basis. Their people must fully understand the feed industry, market forces, unique aspects of your operation, proper process and, last but not least, the technology that connects it all together.
Feed companies today realize less than 50% of their technology's value. This lost value is the result of inadequate time spent at the start designing the business process and execution. To make things worse, not enough time is spent after implementation on "best practice" training and knowledge transfer.
When I talk about training, I am not talking about training on the software. The value-added training is related to process execution and industry-specific experience. This is critically important in the volatile and highly specialized feed industry, and people must be nurtured to advance to the next level. This is what ultimately makes the difference and solidifies your business process for long-term sustainability.
I recently received some coaching from a colleague and friend, Dr. John Foley. He told me, "Put a group of great people into a company with great processes and systems, and watch 'em go. Put those same people into a company with terrible processes and systems, and they'll have to fix all that stuff before they can really get rolling. There will be a lot of wheel spinning before productivity takes off."
The point is, don't allow this wheel spinning and frustration to happen to you. The spinning takes place in a transformation because of "The Gap." The Gap occurs because the software vendor does not fully understand the customer's business and the customer does not fully understand the technology and the capabilities of the system being installed.
The feed industry is unique due to volatile raw material costs, a constantly changing bill of materials, dynamic pricing needs, process manufacturing and others. Its processes vary greatly from most other sectors. To ensure a highly functional operation, these must be fully understood.
As you consider your transformational journey, be sure you align with a partner who can cover The Gap. They're understanding of the technology is simply the price of entry. More important, they must understand the feed business and the processes and best practices that will help your organization be productive and ultimately capture value.
Successful, real-life experience in a feed mill operation, purchasing or formulation department is a must. That experience, connections and past trials and tribulations will be invaluable to your transformation and allow you to hit the ground running with minimal spinning.
Before you start, establish measures to judge success. This ensures that you know what the end game is. An experienced team will be able to assign a dollar figure to the prize at the end of the journey.
Don't be afraid to take the first step. When you have a partner that understands The Gap and measures of success, you are ready to start driving the long-term sustainability of your business and capture those elusive dollars to your bottom line.
*John Conboy is director of the EMEA region at Feed Management Systems Inc. He focuses on the development of the region and on creating measurable value for customers in manufacturing, business operations, formulation, purchasing and continuous improvement consulting. Conboy can be reached at [email protected]