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Feed mills cut waste, boost efficiency with integrated production software
96 Plays1 year ago
Modern feed manufacturing requires sophisticated tools to manage complex operations, control costs and maintain quality across multiple facilities.
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Transcript
Introduction to Feed Strategy Podcast
00:00:08
Speaker
Hi everyone.
00:00:09
Speaker
Welcome to Feed Strategy Podcast.
00:00:12
Speaker
I'm your host, Jackie Remke, Editor-in-Chief of Watts Feed Brands.
00:00:16
Speaker
This edition of Feed Strategy Podcast is brought to you by FeedStrategy.com.
00:00:21
Speaker
FeedStrategy.com is your source for the latest news and leading edge analysis of the global animal feed industry.
Guest Introduction: Carol Vervette
00:00:29
Speaker
Today we're joined by Carol Vervette, Senior Product Specialist for Nutrition at BestMix.
00:00:35
Speaker
He's here to examine feed mill efficiency techniques.
00:00:38
Speaker
Hi, Carol.
00:00:39
Speaker
How are you today?
00:00:40
Speaker
Hi, Jack, and doing well.
00:00:42
Speaker
Thank you.
00:00:43
Speaker
Very good.
00:00:44
Speaker
Well, let's get right into it.
What are the features of modern feed formulation software?
00:00:47
Speaker
Moving beyond traditional recipe creation, how can feed formulation software help manufacturers become more strategic in their overall production planning and scheduling?
00:00:59
Speaker
Well, that's quite a comprehensive question to start off with.
00:01:03
Speaker
But I think when you look at traditional recipe creation or feed formulation in the past and you compare it with today's, how the software, let's say the software, how do you call it, architecture at our customers,
00:01:20
Speaker
or at feed companies looks like more in general, it is becoming more and more an integrated solution.
00:01:26
Speaker
So where you saw in the past that you had the recipe formulation department, then you had the purchase department, then you had the sales department, then you had all these different departments that really worked in an independent way.
00:01:38
Speaker
Nowadays, if you come from that traditional scenario, nowadays, when we look at how software is implemented at feed companies nowadays, it's really an integrated solution.
How does the software improve production processes?
00:01:51
Speaker
So being a software vendor and providing a software solution that covers the different departments of a feed company, it just provides a lot of insight for feed companies to follow the
00:02:05
Speaker
and where the software follows the business processes that happen at a feed company and not the other way around.
00:02:14
Speaker
It's not the software that dictates the process, but it's the process that is going to allow feed companies and that the software enable feed companies in those processes, where you will see that the boundaries between the real recipe management
00:02:33
Speaker
on the one hand, and for instance, the production of recipes on the other hand, those boundaries become more and more flue, more and more thin.
00:02:43
Speaker
In the past, we saw that typical recipe creation, typically formulation, once the job was done, the information was either printed on a paper or sent through file to production, and there people started making the product in the factory.
00:03:00
Speaker
Nowadays, we see in a lot of cases, we see that really people in the factory are really fine tuning production orders with the latest state of the art information they have from going through different lots with different qualities, with different prices.
00:03:15
Speaker
They really want to tweak and tune
00:03:18
Speaker
the production so that it fits to the best of their abilities, let's say the quality and the strategic overall production plan, how it was set up.
00:03:29
Speaker
So looking at it from that perspective, yeah, the world has really evolved a lot and it requires a lot from fleet formulation software, let's say to accommodate all of that.
00:03:43
Speaker
And yeah, I hope that explains
00:03:47
Speaker
a little bit what I think where we came from with the traditional recipe creation.
00:03:53
Speaker
Now it's really the feed company as a whole that is involved in the entire, let's say, in the entire recipe creation.
00:04:02
Speaker
We will come back to that later on during the podcast with other examples.
00:04:06
Speaker
But yeah, I think the part that, let's say,
00:04:09
Speaker
Feed formulation is now really integrated with production, with the ERP environment, with the quality control environment that really made a huge difference over the last couple of years.
How do manufacturers minimize waste with software?
00:04:21
Speaker
Now you mentioned, of course, the integration.
00:04:24
Speaker
How does that translate over to inventory tracking and management?
00:04:28
Speaker
How are manufacturers using these tools to minimize waste, reduce storage costs, and create more of a dynamic just-in-time production strategy?
00:04:39
Speaker
Yeah, I think that's one of the key aspects.
00:04:42
Speaker
I mean, if you look at the volatility of the raw material market nowadays, well, nowadays, I shouldn't say nowadays, it's always been like that, but now we have software tools to help us with that.
00:04:55
Speaker
If you look at the volatility, what manufacturers want to do, they want to make sure they buy at the right time.
00:05:02
Speaker
They don't want to buy too soon.
00:05:04
Speaker
They don't want to buy too late.
00:05:06
Speaker
and they want to have it at the factory when they need it, because storage is costly, and storing raw materials is an expensive waste of resources, so they really want to make sure they do that in time.
00:05:21
Speaker
So you need software tools on the one hand to
00:05:25
Speaker
to do a very good forecasting and because that's where it all starts.
00:05:29
Speaker
If you cannot predict what you're going to produce, therefore what you're going to sell, then any other assumption you make is just a waste of time and money.
00:05:38
Speaker
And so first of all, you need to have a good way of making a good prediction of what am I going to sell and therefore what do I need to produce.
00:05:49
Speaker
And once you know that, again, coming back to the integrated solution, if that forecasting is sent over to the formulation department, then the formulation department nowadays have at their disposal formulation tools where they can really formulate the entire recipe portfolio.
00:06:09
Speaker
And I'm not talking about only one mil, but I'm talking about multiple mils at the same time.
00:06:15
Speaker
where they can really predict, okay, given a certain raw material forecast, this is really what we need in terms of raw materials, the macro materials, the minerals, the amino acids, you name it.
00:06:26
Speaker
This is really what we need to be able to produce and to be able to sell and to ship to our customers that certain sales forecast that we predicted.
00:06:36
Speaker
And then again, with the right software tools to organize the shipping and the transportation and the logistics to have those raw materials that you decided maybe months upfront to buy, to have them the ability to really, from the logistical point of view, get that raw materials at the gate, at the factory, at the exact right time.
00:06:58
Speaker
That's of course a key differentiator for feed companies that really want to reduce their costs and have
00:07:05
Speaker
this just-in-time strategy because you don't want to have the raw materials lying there three, four, five days up front.
00:07:12
Speaker
You want to have them there at the moment when you really need them.
00:07:16
Speaker
And
00:07:18
Speaker
Then I think, in my opinion, it starts with a very good buying strategy.
00:07:22
Speaker
And where typically you would say feed formulation, recipe creation has nothing to do with buying.
00:07:29
Speaker
Nowadays, it's all about buying.
00:07:34
Speaker
We see in the industry that many people from the purchase department nowadays, they use formulation software.
00:07:41
Speaker
Just to decide whether or not to buy certain lots of raw materials.
00:07:47
Speaker
Whether or not a lot that is offered by a certain supplier is sold at the right price.
00:07:52
Speaker
And whether you can or cannot make use of that raw material in your production process.
00:07:59
Speaker
So...
00:08:00
Speaker
doing that with the right tools, doing these multi-blending and these forecasting.
00:08:06
Speaker
And I mean, there's a lot of information out there in the market and you can really save a lot of money with that.
00:08:13
Speaker
is really using formulation software to decide when you are going to buy raw materials and for what production location.
00:08:21
Speaker
I mean, in the feed industry, we see that many of our customers and many companies, they become bigger and bigger.
00:08:29
Speaker
You see a lot of consolidation, but therefore that also means that the amount of raw materials and the amount of production facilities that you need to service, they also increasingly,
00:08:40
Speaker
increase yeah and and therefore yeah making the right decision really can can earn you thousands and thousands and thousands of euros or dollars depending what side of the world you're at so yeah it will really make make your life a lot of a lot easier if you have this again this integrated solution because yeah reducing uh reducing waste reducing storage cost uh just in time strategy yeah formulation software alone
00:09:10
Speaker
is impossible with formulation software alone to solve that.
00:09:14
Speaker
You really need the sales and the purchase department as a, let's say, to work in a cooperative way.
00:09:24
Speaker
You need them to work together to make that happen.
00:09:27
Speaker
But it is key nowadays, it is really key for feed companies to achieve operational excellence.
Can software handle supply chain disruptions?
00:09:38
Speaker
Now, if immediate decisions about ingredient substitution are required, say when facing supply chain disruptions or something along those lines, will you walk us through some real-time analytic capabilities?
00:09:54
Speaker
Well, of course, again, logistics sometimes can be a nightmare.
00:10:01
Speaker
And we know that not always.
00:10:03
Speaker
And we can try to...
00:10:05
Speaker
to be on the safe side all the time, but that's not always going to happen.
00:10:10
Speaker
So you will always end up in situations where, let's say, a truck does not arrive at the right moment, a boat gets delayed, a canal gets stuck, whatever.
00:10:19
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And we have geopolitical things that all of a sudden cause logistical disruptions.
00:10:26
Speaker
And then again, yeah, I probably am going to repeat myself every now and then.
00:10:31
Speaker
If you have a formulation software where, let's say,
00:10:34
Speaker
You can easily either replace one raw material with another one.
00:10:41
Speaker
That's just very helpful.
00:10:42
Speaker
If you look at an operational mill where you have three, four, 500, let's say, operational products that you can produce and you know that a certain raw material no longer is available, there are multiple ways formulation software can handle this.
00:10:57
Speaker
I mean, I give an example.
00:10:59
Speaker
It could be that you say, you know, we don't have one raw material.
00:11:04
Speaker
It's no longer available.
00:11:05
Speaker
Well, we just one-on-one, we replace it with a very similar raw material.
00:11:10
Speaker
We don't care.
00:11:12
Speaker
I'm not saying it's the right approach, but it's an approach.
00:11:14
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We don't care if there are slight quality issues or if there are slight price changes because of the one-on-one change.
00:11:23
Speaker
We just want to keep the mill running because not running the mill also costs a lot of money.
00:11:28
Speaker
Then there are tools in formulation software where you can say, okay, from all my operational products, I take out one raw material, I replace with another raw material, and automatically I recreate new products.
00:11:39
Speaker
I send them to the factory, I send them to the ERP, I recreate my labels because I'm legally obliged if I switch a raw material to make a new label.
00:11:48
Speaker
And again, that all happens with one or two clicks of a button.
00:11:52
Speaker
You don't want people...
00:11:55
Speaker
Therefore, the volume and the amount of recipes that nowadays formulators need to manage is just too big.
00:12:02
Speaker
They need to have tools at their disposal where they can do these operations in, I would say, split seconds.
00:12:09
Speaker
But usually these kind of operations, they take a while.
00:12:12
Speaker
But because we need so many products to process, but it's just a couple of clicks and that raw material is, let's say, replaced.
00:12:21
Speaker
That's not the optimal solution because here in this scenario, you're just not looking at the changes in quality or the changes in price that this might impose on the products that you're doing the substitution with.
00:12:36
Speaker
The better solution is that again, in your multi-blend environment, in the environment where you are really looking at all the recipes of one mill,
00:12:47
Speaker
that you just insert a new raw material, that you remove one raw material, and then you re-optimize the new scenario.
00:12:54
Speaker
Because when you re-optimize the scenario, then obviously again, all quality parameters are...
00:13:02
Speaker
are fulfilled and also you are sure that this disruption and this introduction of a new raw material is done in from the price perspective as well the most optimal way and still after you did your optimization after you changed all your recipes still you're going to process that output again by recreating new products by recreating new labels by adding medication to those products wherever it's needed
00:13:31
Speaker
by making private label products if you want and so on and so forth so the the the flow of let's say a logistical disruption when that perspective does not change that much from the daily operational flow because also in the daily operational flow yeah formulators they need to consider logistical restrictions and whether you get information that
00:13:57
Speaker
for instance, the wheat has to be limited to 500 tons on that day, or because the boat did not arrive yet, or you have to say, well, you know what, there is no more wheat at this moment.
00:14:10
Speaker
Look for an alternative.
00:14:11
Speaker
Yeah.
00:14:12
Speaker
From the software perspective and what the formulator has to do is the same process or compared to when he's doing his regular job as a formulator, because at all times,
00:14:24
Speaker
There are logistical considerations and a disruption is just the fact that a raw material is not there is just one of the disruptions that might happen, but they are no, well, not more different.
00:14:38
Speaker
Maybe they are a little bit more urgent than the other ones, but from what you need to do with the software and how the software tools can help you to support these kinds of decisions, they are very similar.
How does AI improve equipment performance?
00:14:52
Speaker
To what extent can the software predict equipment performance and maintenance to help avoid production interruptions?
00:14:59
Speaker
How are operational analytics changing the reactive maintenance approach?
00:15:05
Speaker
Well, I would say that's not an easy one for formulation software because obviously we're talking factory level here.
00:15:17
Speaker
But what we are seeing there, we are doing some projects there on that level with some of our customers, is that here is for the very first time where we are using artificial intelligence to help us in doing that.
00:15:35
Speaker
Because obviously in the factory, we are working with a lot of equipment and a lot of parameters that might impact
00:15:46
Speaker
the output, the quality of the output that the factory is generating.
00:15:51
Speaker
And obviously all the equipment in the factory, they have a lot of sensors, they have a lot of buttons, but they also have a lot of information, a lot of figures.
00:16:01
Speaker
And obviously, if you are capable of defining a correlation between the setup of the equipment and the quality output,
00:16:13
Speaker
In combination with the formulation that was offered to the equipment, then obviously you will have, let's say, the means to adjust the formulation in such a way that, let's say,
00:16:28
Speaker
given the setup of the equipment, you will achieve the desired output.
00:16:34
Speaker
And we are, at the moment, I will give a very typical, not a typical example, I will give an example of what we are currently doing.
00:16:41
Speaker
We are currently looking at the setup of an extruder to determine whether for a given formulation that with the setup of the extruder, we can get to the optimal pallet produced in the extrusion process.
00:16:57
Speaker
Because in that process, if you rely on very experienced people in the factory,
00:17:05
Speaker
And if you can reduce, let's say, the impact of those people, and if you can help them by using artificial intelligence in, let's say, in making sure that the equipment is set up in the most ideal way with what we know from history, with what the AI predicted us, then we will always have a better palette quality and therefore less production introduction, less rework, and therefore, again,
00:17:32
Speaker
trying to achieve a better operational excellence by doing a lot of analytics.
00:17:37
Speaker
Because again, doing this in the factory, doing this during the production process, you can only do this if you have a lot of information.
00:17:46
Speaker
So you will need to have a lot of data to support this process.
00:17:53
Speaker
But this is what currently already is possible.
00:17:55
Speaker
Now, what is the impact of formulation software there?
00:17:59
Speaker
It's a lot less.
00:18:02
Speaker
formulation the product is there more one of the input parameters that we use as one of the parameters that the AI can use to predict and to help us in let's say in predicting the output and in helping us to tweak and to set up the equipment in the factory in such a way that given the current product the current formula we get to the best to the ideal end product which in
00:18:30
Speaker
This particular case was, let's say, the pallet.
00:18:35
Speaker
Earlier in the conversation, you mentioned manufacturers that are operating multiple production facilities.
00:18:42
Speaker
How does your software help standardize these processes, ensure consistent quality, and create more unified operational approaches across those different locations?
How does software ensure consistency across facilities?
00:18:54
Speaker
Yeah, I think...
00:18:57
Speaker
Excellent question.
00:18:58
Speaker
And I think one of the key aspects there is already to have a centralized system.
00:19:05
Speaker
I mean, having all the information of all your production facilities together in one piece of software, in one database, already is a very big help because having everything together
00:19:22
Speaker
allows you again to do analytics, to compare similar products from different production locations, to see whether the price level is the same, to see whether we apply the same ingredients and so on.
00:19:35
Speaker
But it also allows product management in a lot easier way to send out guidelines to those teams in those different production locations.
00:19:46
Speaker
I mean, if everybody is working on their island,
00:19:50
Speaker
then it's hard for product management to keep track of what happens.
00:19:54
Speaker
If everybody's working in the same environment,
00:19:57
Speaker
then for product management is a lot easier to steer, to watch over quality, to watch over the raw materials that we use.
00:20:06
Speaker
And then at the same time, if in your system you have the ability to differentiate between the different production locations, for instance, the raw material quality or the raw material price, because wheat and barley and soy and corn, let's say all these macro ingredients, they have deviating quality.
00:20:25
Speaker
And if you have...
00:20:27
Speaker
production facility in the north of the country and in the south of the country, maybe there's raw material, raw materials come from different suppliers and therefore may have different qualities.
00:20:36
Speaker
Now, if you want to make sure that your how you work, but that also the quality of the products that you make is similar in the different production locations, then applying those regional differences on the raw materials is key to getting to the same end result.
00:20:53
Speaker
Because you're selling a piglet feed, you're selling a poultry feed, you're selling a dairy feed, a beefy, whatever, at a certain quality, that's what you guarantee to your customer.
00:21:03
Speaker
Then the customer should not worry about the fact that he buys it from production facility one or two.
00:21:09
Speaker
It's the formulation software that has to make sure that the desired quality is achieved by all production locations.
00:21:17
Speaker
And...
00:21:18
Speaker
Yeah, if you have a software approach where this is all possible within one database, it gives you so much more consistency in how people work, how people operate, how they get to their final products, what guidelines to implement, what legislation to apply, and so on.
00:21:42
Speaker
It all just makes it a lot easier if you work from one centralized system.
00:21:51
Speaker
What did the cost savings or production improvements typically look like in some of these optimal scenarios that you've mentioned during this discussion?
00:22:00
Speaker
And how would you quantify the typical operational efficiencies that manufacturers achieve?
What cost savings can be achieved through software?
00:22:09
Speaker
I think it's hard to quantify because what I don't want to say is that by using, let's say, formulation software, you can cut down on stuff.
00:22:20
Speaker
I would say you're going to optimize the use of your staff and you're gonna let them work on the work that really matters, that makes a difference and not on the repetitive tasks and the very time consuming tasks.
00:22:37
Speaker
What kind of typical operational efficiencies do we achieve?
00:22:42
Speaker
For instance, automated labeling.
00:22:45
Speaker
If you look at the amount of time that people sometimes have to spend in making sure that they make a compliant label for their feet, it's scary.
00:22:56
Speaker
And with good software, creating a compliant label, and whether it's now according to the US law or to the European law or to any other law, that should be just push of a button.
00:23:06
Speaker
You make a change to your recipe, you push a button and automatically the label is created and it is available in the ERP system.
00:23:13
Speaker
You don't have to do anything for that other than at the same time when you save your new product, also the information for the labeling is recreated and is updated.
00:23:24
Speaker
That saves you a lot of time.
00:23:27
Speaker
The same with automated integrations.
00:23:29
Speaker
If you make a new recipe, automatically it is sent to ERP.
00:23:33
Speaker
Automatically it is sent to the mail.
00:23:35
Speaker
Automatically it is sent to the quality system.
00:23:38
Speaker
All these integrations, if the ERP has the new pricings for the new week or for the new month, you don't want somebody in formulation software just to make a printout from ERP and to type over the prices in formulation software.
00:23:52
Speaker
That's just
00:23:54
Speaker
waste of these people's intelligence.
00:23:56
Speaker
I mean, these are formulators, nutritionists, they need to make feed, they need to help and support their customers, not just typing over prices.
00:24:06
Speaker
Do you really save people with, no, you make sure that these people, they focus their time on what they really should do, support the customers of our customer in their work.
00:24:19
Speaker
So really help
00:24:20
Speaker
people in the animal protein business to do that in a more efficient way.
00:24:26
Speaker
If you want to talk about savings, working with multi-blends and really using multi-blends in an optimal scenario where you are, let's say, really talking about, okay, buying the right raw material at the right time.
00:24:41
Speaker
And what we discussed in the beginning, where you're really going to, let's say, align sales forecast with consumption forecast.
00:24:49
Speaker
We have studies that support that you're going to say that you can save up to 1% on the raw material cost.
00:24:55
Speaker
And we know what 1% of the raw material cost, what that stands for in the feed industry.
00:25:01
Speaker
That's a huge amount of money.
00:25:03
Speaker
Another typical example is working with moisture loss.
00:25:06
Speaker
We know that producing feed, yeah, water gets lost because when you run around in the factory, everybody notices the heat in the factory.
00:25:16
Speaker
So,
00:25:18
Speaker
even if you only lose half a percent of moisture during the production process of feed, that half a percent of water, if you don't consider that during formulation, again you might easily lose up to half a percent on your raw material cost.
00:25:33
Speaker
Now yeah, those two alone combined one and a half percent on the raw material cost, I mean
00:25:40
Speaker
That's a huge amount of money.
00:25:41
Speaker
That's tens of thousands of euros every year.
00:25:45
Speaker
Maybe, yeah, for some companies, even hundreds of thousands of euros.
00:25:51
Speaker
Other operational efficiencies that we do is we include legislation.
00:25:55
Speaker
We unburden our customers.
00:25:57
Speaker
We don't want them to go on the...
00:26:03
Speaker
on the websites of either the FDA or the EU to investigate whether something has changed in the law.
00:26:09
Speaker
No, if you have formulation software, if you have good formulation software, then also these tools, they will support you and they will include the law.
00:26:20
Speaker
Either they will include the law in their software or they will allow the formulation software to partner with experts in the industry.
00:26:30
Speaker
If you look at, for instance, sustainability, or if you look at when you have to create safety data sheets, I mean, if your formulation software integrates with these, with partners that really have a lot of knowledge on how to create material safety data sheets or how to calculate the carbon footprint for certain feed or certain feeding programs.
00:26:53
Speaker
Yeah.
00:26:54
Speaker
That's just saving you so much time and money.
00:26:57
Speaker
Yeah.
00:26:59
Speaker
I cannot, let's say, quantify it, but I hope some of these examples just showcase that by working with, let's say, with modern and with state-of-the-art feed formulation software, you can really save a lot of money and you can really, let's say, let your people focus on what they should be focusing on, producing or creating
00:27:23
Speaker
proper feed and everything else, all the stuff that is administration, legislation, repetitive work, you have to allow software to get that burden off your hands.
How does software handle regulatory compliance?
00:27:37
Speaker
Thanks for taking on that question.
00:27:39
Speaker
Now, you mentioned the regulatory element.
00:27:43
Speaker
Can you explain that a little further?
00:27:44
Speaker
How is that maintained?
00:27:47
Speaker
Is it tailored by region for export markets?
00:27:51
Speaker
Can you dig into that a little bit?
00:27:54
Speaker
Well, the whole legislation part is, there's a number of things there to be said, but I think the main focus there is the labeling.
00:28:05
Speaker
Because the labeling, if you talk about a legal document that has to be produced by the formulation software, it's the label.
00:28:13
Speaker
And if you look at, for instance, the compendium in the US, every year the compendium gets updated.
00:28:18
Speaker
Well, if you have formulation software that encompasses
00:28:22
Speaker
the compendium and how the compendium has to be applied for medicated feed in the US, if people do not have to worry about that and the fact that they are going to make feed, medicated feed with a non-compliant label, we just make sure with our software, we just make sure that no matter what
00:28:42
Speaker
medicine or no matter what drug you put in the feed, automatically the necessary cautions, the necessary warnings, the necessary active drug information will all be printed automatically and compliant on the label.
00:28:57
Speaker
The same in the EU.
00:28:59
Speaker
If you go through the website of the European Union on the declaration of feed,
00:29:06
Speaker
I mean, I know that all our users are educated, but that's again another level.
00:29:13
Speaker
I mean, it's very comprehensive.
00:29:15
Speaker
It's very complicated.
00:29:17
Speaker
And we really want to unburden our users.
00:29:18
Speaker
We just want to make sure, okay, if you're using our formulation software, then the implementation of the EU law for the declaration of heat is just included in your formulation software.
00:29:32
Speaker
That's just how it is.
00:29:33
Speaker
And on the other hand, besides declaration, we also allow you, our formulation tools will also allow you to validate feed, not only to declare what you have produced, but also to make sure that when you produce feed,
00:29:52
Speaker
that it does not contain something that is not supposed to from a legal point of view, or that might be dangerous from the health point of view.
00:30:03
Speaker
Suppose we're making, and it's the same example I always give, because it's the one that I remember from,
00:30:09
Speaker
from when I started as a young consultant.
00:30:12
Speaker
If you're making sheep feed that contains copper, yeah, I mean, that's not good for the animals.
00:30:17
Speaker
So what you want to avoid, if you can build in checks in the software that as soon as a formulator produces by accident sheep feed that contains some copper, that a warning is being sent out to that user, be aware.
00:30:32
Speaker
This is not allowed.
00:30:33
Speaker
We are not going to proceed with creating products or labels or sending anything to the mill because the software detects that you made something that is not, in this case, from the nutritional point of view, that is not good for your business.
00:30:50
Speaker
And whether it's then legally not okay or because the animals are not going to perform to whatever needs, to whatever you required, or because it's even dangerous for the animals.
00:31:00
Speaker
Yeah.
00:31:01
Speaker
Those are all checks that you want to have built into the software.
00:31:04
Speaker
You don't want people having to check feed by feed by feed just to make sure that all these rules and guidelines and regulations are built in.
00:31:16
Speaker
I will say more, it's not only legally.
00:31:18
Speaker
I mean, also from the product management point of view, if the product manager define, okay, if we're going to make a decent poultry feed,
00:31:25
Speaker
This is what it has to comply to.
00:31:28
Speaker
And for some reason, because we make a substitution of a raw material, because we have a problem in the factory and the formulator thinks that he's doing a sensible thing in replacing one raw material with another.
00:31:40
Speaker
But all of a sudden, that product therefore no longer complies to the claims of the product's portfolio that we had in mind from the product management point of view, because it's no longer GMO-free or it's no longer...
00:31:54
Speaker
it's no longer bio or whatever, then you want to be warned.
00:31:57
Speaker
You don't want users having to think about that.
00:32:00
Speaker
You want the software to take care of that for you.
00:32:03
Speaker
And so we're really trying with the tools that we implement in our software, we're really trying to unburden our users, not only with the legal stuff,
00:32:16
Speaker
So playing off the example that you just gave, how are these tools further minimizing human error while also allowing the staff to focus on more strategic operational decision making?
What are the benefits of automation in software?
00:32:29
Speaker
Yeah, well, that's just...
00:32:32
Speaker
all of the above, that's what I just mentioned, by automating processes, by automating checks, by allowing the, by letting the software validate the output that the nutritionists and the formulators and the product management, by implementing software checks.
00:32:52
Speaker
Yeah, first of all, we reduce the amount of time that people really have to spend on this.
00:32:58
Speaker
So the human error is almost out of the equation as such.
00:33:02
Speaker
And by automating, and really the word is automation, by really allowing people to automate all the processes that are labor intensive, like labeling, like integrations, like
00:33:17
Speaker
formulating a like the replacement of raw materials, what we already discussed.
00:33:21
Speaker
Yeah.
00:33:21
Speaker
Therefore you just save a lot of time.
00:33:24
Speaker
And therefore, with all the examples that I already mentioned, you will just have more time for your staff to, to really focus on what, like what you said, the, the, the strategic operational decisions, the supporting your customer instead of spending time in the formulation software for us.
00:33:46
Speaker
The less time they spend in the formulation software, in fact, the more we prove our point that formulation software really can unburden you as a nutritionist or as a formulator because you really get time to be spent on other stuff, on the important stuff.
00:34:04
Speaker
And maybe it's also stuff that you need to do with the formulation software, but not necessarily.
What challenges exist in implementing advanced software?
00:34:12
Speaker
What are the most significant operational barriers that feed manufacturers would typically face when implementing advanced formulation software?
00:34:24
Speaker
Well, I think there's two main barriers.
00:34:30
Speaker
Well, three.
00:34:32
Speaker
First of all, in our industry, everybody's using some sort of formulation tool.
00:34:40
Speaker
Some sort, I mean, everybody is doing it somehow.
00:34:43
Speaker
Maybe some even do it in some custom made thing in an access database or even in Excel, but everybody's doing something.
00:34:52
Speaker
But that something contains the IP of your company.
00:34:58
Speaker
And so having to transfer the IP, the intellectual property, the heart of your company, having to transfer that into other software
00:35:09
Speaker
That's a big thing.
00:35:09
Speaker
And that's not a light decision to take because you really have to be convinced that the software platform that you're moving it to will be capable of handling the IP in the same way as, let's say, the tool you are currently using, which usually it does.
00:35:29
Speaker
And in our case, it always does.
00:35:32
Speaker
But it's a barrier.
00:35:33
Speaker
It's a threshold that you have to get people over.
00:35:36
Speaker
Secondly, I would say,
00:35:38
Speaker
It's legacy.
00:35:41
Speaker
I mean, very often people work with formulation tools for a very, very long time.
00:35:47
Speaker
And so they just have habits, habits of how they do things.
00:35:53
Speaker
And it's not always easy to convince them that it can be done in a slightly different way or in a completely different way.
00:36:04
Speaker
And that another way and that another software
00:36:08
Speaker
can do what they are doing already for 20 years and where they do not really see yet what the improvements could be.
00:36:18
Speaker
That's the second thing.
00:36:20
Speaker
The fact that you have legacy software there with people that very often already work for a very long time in a feed company because we see the feed industry is a quite, with that respect, I would say this,
00:36:37
Speaker
employees are very loyal to their job.
00:36:41
Speaker
So we often see that people really work for a very long time at a certain company and therefore work with the same formulation tool already for a very long time.
00:36:52
Speaker
And yeah, so that's also a threshold that you have to overcome.
00:36:57
Speaker
And then the third one is, yeah, these are not light projects.
00:37:03
Speaker
I mean, we try to make them as easy as possible and we're in,
00:37:07
Speaker
and we offer migration tools to transfer information and so on and so forth.
00:37:12
Speaker
But still, there is a certain learning curve.
00:37:15
Speaker
There is maybe some procedures that you want to change.
00:37:17
Speaker
Maybe you want to implement a new feature.
00:37:20
Speaker
Maybe you want to implement some checks.
00:37:22
Speaker
And for many companies or for many of our users, this is something that they have to do on top of their existing job.
00:37:32
Speaker
Usually,
00:37:34
Speaker
in these software projects, people do not get enough time to really, let's say, do the implementation of new formulation software.
00:37:43
Speaker
If you have a full-time job,
00:37:45
Speaker
and then your boss is telling you, and you know what, we bought new formulation software and we need to do the implementation of that as well.
00:37:55
Speaker
And you already have a full-time job.
00:37:57
Speaker
Yeah, then you just see a big pile of work and yeah, it's not really easy to get over that barrier to, and then it's more towards, let's say, the people in charge, the decision makers at companies to say, guys, I mean, implementing formulation software
00:38:15
Speaker
you will need to reserve some time from your staff to really, let's say, to start to appreciate the full benefits of the software.
00:38:24
Speaker
If you really want to, all the benefits that we have been talking about, if you want people really to explore those benefits, you need to give them time.
00:38:33
Speaker
And so, in my opinion, those are three of the most significant barriers that we experience at our customers.
00:38:42
Speaker
Well, thank you so much for all the information that you've gone over so far.
00:38:47
Speaker
I'm going to move toward my last question here.
00:38:50
Speaker
Now, looking ahead, how do you see feed manufacturing software evolving to provide even more comprehensive operational intelligence, say potentially integrating AI and those predictive analytics?
Will AI replace human expertise in feed formulation?
00:39:07
Speaker
I've had this conversation already quite a lot with customers because I gave you the example of what we're already doing with AI.
00:39:15
Speaker
And I think that also AI might be a help, let's say, that based upon a given nutritional profile that a customer asks that AI is going to predict a formulation, a recipe that fulfills all these requirements.
00:39:33
Speaker
I'm not going to say it's going to be impossible, but I think with
00:39:37
Speaker
with how, with the variability, and we're still talking about natural products, the raw materials that we use are so variable that I think it will be very hard for AI to really, let's say, to start replacing people in the formulation industry.
00:39:57
Speaker
Will AI be capable of
00:40:00
Speaker
Yes.
00:40:01
Speaker
Will AI, for instance, be capable in the future by looking at IoT of things and looking at the KPIs that we notice on farm, milk production, milk fat, milk protein, or other performance indicators?
00:40:18
Speaker
Will AI be able to help us, assist us in
00:40:23
Speaker
determining what are now the optimal requirements if you have a certain situation on farm, what is now the best ration to accommodate those situations?
00:40:33
Speaker
Yes, AI will probably be able to help us, but it is my belief, and okay, I still have a couple of years to go, but it is my belief that not within the next few years when I will still be running around in the business that AI is going to really replace people.
00:40:52
Speaker
It's certainly going to help us.
00:40:53
Speaker
And I think especially in the production environment, there, I think AI can really help us in getting to a higher operational excellence or a higher operational intelligence.
00:41:07
Speaker
But in the feed formulation itself, yeah, I have my doubts.
00:41:14
Speaker
It will be helpful and it can help us and we are exploring, but I don't think that very soon it's going to replace
00:41:21
Speaker
like we see that already in a lot of other businesses that we see that AI is really replacing people and is becoming, let's say, a replacement for human resources.
00:41:37
Speaker
I don't think that in the feed formulation that will happen very soon.
00:41:41
Speaker
But that's more my personal opinion than, let's say, a company statement.
00:41:48
Speaker
Well, thank you so much for your time today.
00:41:51
Speaker
And thanks to everybody who tuned in.
00:41:55
Speaker
Bye, Carol.
00:41:56
Speaker
Okay.
00:41:57
Speaker
Thank you.
00:41:57
Speaker
Bye-bye.