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© IAP Pty Ltd 1 Time Management – You are in Control, if You Choose to Be!
© IAP Pty Ltd 2 Challenges Market Forces High fuel price Electricity – what happened? High cattle prices High feed cost Low carcass price Competition > where did they come from? What can I control? The production process
© IAP Pty Ltd 3 Historical World Oil Price – Nominal & US$2006 Globally Confronting Change in Cost of Our Master Resource Energy
© IAP Pty Ltd 4 Reality of Recent Change in Oil Price We cannot ignore energy cost Global oil price continues to directly influence OUR businesses Power problems in SA? Directly influences our profitability – e.g. feed tonne/litre, head number/litre
© IAP Pty Ltd 5 Confronting Real Domestic Issues IMPORTED FROM BRAZIL Flat World Economy Domestic Sustainability How can Brazil Produce Beef so 40% Import Duty into SA? Lower Energy Production Cost!
© IAP Pty Ltd 6 Plug & Play Anywhere Internet has shrunk our Global World > Flat World Rapid identification of low cost global products, suppliers & services Advantage of territorial commodity prices no longer exist Lowest energy cost (i.e. fuel, labour, grain, etc) = Lowest producer cost One frontier where producers can have a competitive advantage is through their production process
© IAP Pty Ltd 7 Global Meat Processor Presence # 1 # 3 #2
© IAP Pty Ltd 8 Global Meat Processor Presence Competitors - no longer in next state, they are in a different country separated by an ocean Global participants do not strive to be mediocre Processors commonality - Adopt & Adapt > Running fast to expanding their global business Incorporate excellent Controlled Production Processes Why a Controlled Production Processes? Consistent, uniform product Lowest production cost
© IAP Pty Ltd 9 Controlled Production Process Controlled Production Process creates a uniform product from raw materials Aspects of Good Controlled Process Well Defined, Communicated & Implemented (know what one is doing) De-Centralized or does not require daily management decisions to be Functionally Effective (no daily crisis management) Management decisions based on Specific Facts (data driven approach to process improvement) & devoid of Emotional Inputs (not > I think, I feel, I believe)
© IAP Pty Ltd 10 Manage Processes through Measurements One accurate measurement is worth 1,000 expert observations - GM Hopper, USA Navy Processes must be Managed through multitude of objective measurements Resolution - Higher number of steps &/or complexity within process > More Error (KISS) All Processes have areas that may be improved upon > higher efficiency
© IAP Pty Ltd 11 Defining Efficiencies Factors Influencing Profitability Cattle Feed Energy Production Process (fuel, labour, equipment, facilities) What makes me Efficient? Cattle? ADG 1.0 vs 1.8kg/d? DMC 7.0 vs 5.5? Carcass protein kg/d? Feed Energy? Maize $ / NEG Mcal/kg? Gluten meal $ / NEG Mcal/kg? Production? Delivered ration tonne / Fuel l?
© IAP Pty Ltd 12 Feedlots Feedlots are a Production Process Production Processes are Constrained by Time Prioritize Process Steps - Most > Least Critical Action Trigger Pull = Most Critical Action within a process occurring within a short time period Execution of Trigger Pull > Consequences – good or bad
© IAP Pty Ltd 13 Time Management No one can actually manage Time Management > effectively managing an activity or process during a specified time, with defined outcomes from physical actions
© IAP Pty Ltd 14 Work Day
© IAP Pty Ltd 15 Managing a Process We do not have 24 hr work day > 8 hr/d Production Process > continuous series of repeated actions > Product Production Process includes: 1.Resources - people 2.Constraints – time 3.Input Elements – cattle & feed ingredients 4.Transformation – growth or tissue deposition 5.Products – carcass
© IAP Pty Ltd 16 Measuring a Process One can only manage a process that can be measured Measurements are the Data that is used to improve the process Ration tonne/fuel l ( t/l) Head number/fuel l (95-120hd/l) Ration tonne/mixer hr/d (12-22t/hr) Cattle feed intake kg/hd/d (10-15t/hd/d)
© IAP Pty Ltd 17 Production Process Quantified by Time Production Process is Quantified by Time (e.g. ADG, km/hr, t/hr, t/d) Good Processing Efficiency > Low cost Failure to Control a Production Process > Process Controlling Us! Good to Bad Controlled Process Feed Cattle from Start > Days? > Exit to Abattoir Live Cattle Enter Abattoir > Hours? > Carcasses or Meat Cuts
© IAP Pty Ltd 18 Time Can Not Be Replaced or Repeated Production processes require a time period for completion of individual actions e.g. delivering ration kg/pen Actions within Process impose scale of consequence – e.g. feed kg/pen delivered > ADG Trigger Pull is a critical action within a short time period in a process
© IAP Pty Ltd 19 Feedlot Revolves Around Feeding Cattle Feed Delivery Consumption Feed Preparation & Processing Feed Load/Mix
© IAP Pty Ltd 20 Ingredients - Quality & Number Ingredient Quality (e.g. by-products, grain, silage & hay processing) Number of ingredient materials required to build a ration number of ingredients > loading time & loading weight error factor Number or mixers & capacity must satisfy feed quantity delivered within 6hr period
© IAP Pty Ltd 21 Repeated Feed Team Action Cycle Ration Mix Ration Delivery Pens Feed Order Ingredient Loading Actions require a quantity of time
© IAP Pty Ltd 22 Repeated Feed Team Action Cycle Ration Mix Ration Delivery Pens Feed Order Ingredient Loading Ration > kg/pen = kg/hd/d < 1min
© IAP Pty Ltd 23 Repeated Feed Team Action Cycle Ration Mix Ration Delivery Pens Feed Order Ingredient Loading Diet Ingredients kg/mix 4-7min Ration > kg/pen = kg/hd/d < 1min
© IAP Pty Ltd 24 Repeated Feed Team Action Cycle Ration Mix Ration Delivery Pens Feed Order Ingredient Loading Diet Ingredients kg/mix 4-7min Ration mixing 4-5min Travel time to row/pen 2-8min Ration > kg/pen = kg/hd/d < 1min
© IAP Pty Ltd 25 Repeated Feed Team Action Cycle Kg/pen > # pens 2 - 4min/pen Diet Ingredients kg/mix 4-7min Ration mixing 4-5min Travel time to row/pen 2-8min Travel time to Feed shed 2-8min Ration > kg/pen = kg/hd/d < 1min
© IAP Pty Ltd 26 Ingredients Loading Accuracy (4-7min) Ration By- Product 2 By- Product 3 MaizeSilageHay/StrawPremix By- Product 1 Mixer Load Impacts hd
© IAP Pty Ltd 27 Repeated Feed Team Action Cycle Kg/pen > # pens 2 - 4min/pen Diet Ingredients kg/mix 4-7min Ration mixing 4-5min Trigger Pull Travel time to row/pen 2-8min Travel time to Feed shed 2-8min Ration > kg/pen = kg/hd/d < 1min
© IAP Pty Ltd 28 Ingredient Loading Process Trigger Pull - Accuracy of loading multiple ingredients into mixer – small action time w/greatest impact Individual Ingredient Loading Accuracy is more Critical than Loading Speed Consequence of error directly influences cattle fed by that specific mixer load > 200 – 800hd Right ration, right ingredients, right mix & right quantity/pen
© IAP Pty Ltd 29 Work Day High Cattle ActivityLow Cattle Activity No Cattle Activity
© IAP Pty Ltd 30 Create Consistency in Stockman Actions Daylight is start of day for cattle - feeding behavior > 1 st light & after midday Assess pen as group of cattle within 1 st 3hr of daylight Natural posture = health Unnatural posture = non-health Trigger Pull is critical observation time of cattle within pen > natural versus unnatural posture
© IAP Pty Ltd 31 Daily Stockman Action Cycle Trigger Pull
© IAP Pty Ltd 32 Stockman Actions or Reactions Pull right cattle at right time more important than antibiotic treatment – Late pulls = tissue damage Manure physical characteristics is a poor indicator of health Assess pen feed intake kg/hd/d Focus on cattle posture! Emotional reaction > impromptu ration change can be costly
© IAP Pty Ltd 33 Herd of Buffalo
© IAP Pty Ltd 34 Australian Mandate? Australian - National Livestock Identification Scheme NLIS Reason > Major Beef Exporter Created traceability for export Feedlot found economic benefit in traceability as a measurement tool Feedlot > Identified risk of poor individual performance ( $/hd) through new Data base ADG / Breed – Sex - Origin - Buyer Health / Breed – Sex - Origin - Buyer Carcass wt & Specification / Breed – Sex - Buyer
© IAP Pty Ltd 35 Future of Global Beef Industry Traceability is the ability to verify the history, location, or application of an item by means of recorded identification Important > Consumer Perception Meal Safety = Meal Security Maximum Residue Limits - Monitoring Program Benefits > Markets in Developed Countries How far back does AUS traceability go: Property of cattle birth Transfer through different grazing properties Feedlot Abattoir Box (meat)
© IAP Pty Ltd 36 Future of Global Beef Industry Other countries with traceability: Canada, United Kingdom, European Union – eradication program (e.g. BSE & FMD) EU banned Brazilian beef JAN 31, 2008 for lack of traceability requirement! What benefits would SA feedlots using EID scheme: retail meat yield carcass > carcass gain kg/d health problems – disease Beef measles – What is annual cost to your industry? Cattle Buyers – Are their cattle really Cheap? Identify individual cattle as profit centre Promote consumer confidence in SA beef meal
© IAP Pty Ltd 37 Cargill Steps in Marketing Better Eating 1. Indentify breeds for specific meal product 2. Specific purchase of quality cattle 3. Paddock-to-Plate traceability 4. Company owned feedlot 5. Superior nutrition 6. Accurate measurements (full feedlot = 250,000 cartons) 7. Stress free handling of cattle 8. Hide & carcass cleaning 9. pH-temperature decline 10. Carcass tracking 11. Carcass scanning (video image of beef quality attributes) 12. Carcass sorting 13. Carcass mapping 14. Carcass monitoring 15. Enhanced food safety 16. Advanced table boning 17. Lean point verification 18. Innovative packaging 19. Product identification 20. Cold storage 21. Inventory management 22. Quality control – ISO Customer focus 24. Continuous improvement 25. Environmental management
© IAP Pty Ltd 38 Australian EID Trialled electronic identification device EID > durable Passive transponder - magnetically imbedded number on inside & visual number on outside Same technology used in stores for tracking valuable goods in/out (e.g. plastic tag they take off clothing or scan boxes to remove from inventory)
© IAP Pty Ltd 39 Electronic Data Transfer Ear tag transponder powered by battery antennae Hand held Wall mounts Trigger Pull - capture cattle EID Software (e.g. StockaID) captures EID Scale Weight Date/time Records Products applied to cattle – implant, Vaccine, antibiotics, drench Grazing paddock & pens Associated $/hd
© IAP Pty Ltd 40 NLIS > Connectivity NLIS data management located on web site for EID ownership transfer Why use electronic data? Connectivity = Transfer Information at High Speed Accuracy of data, minimal recording errors Allows immediate & future assessment with additional data Does not get lost in piles of notebooks
© IAP Pty Ltd 41 EID + Software Schematic Tracking Individual Cattle through Process – Wt, +Products, DOF, ADG, Sort, $Inputs, $Health > Abattoir > +/-$ ROI
© IAP Pty Ltd 42 Individual Cattle Identification Each Animal is a Profit Centre
© IAP Pty Ltd 43 Individual Cattle Identification
© IAP Pty Ltd 44 Electronic Identification Device EID EID technology is only as good user that implements – No Silver Bullets (cure all) Technology is not a cost decision > assess through return on investment AUS NLIS start 2000 & full activity since 2005 > got it Right! SAFA should take initiative to develop uniform system & government will adopt Dont re-invent the wheel – it is already in working mode
© IAP Pty Ltd 45 Summary Global markets will continue to dictate our commodity prices Feedlot revolves around feeding cattle through production process Trigger Pull – is a critical action within your production process Cattle traceability will become more dominant in our meal industry > Adopt to your advantage to measure your efficiencies Technology is only as good as the user – No Silver Bullets You are in control of your Process - if You Choose to Be!
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