ARE YOU SURE YOU ARE PERFORMING AT FEED FORMULATION?
This month, I would like to share an interesting tool aiming at monitoring formulation performance. We are touching a very critical topic that dictates the competitive game between feed millers. It is about which company will formulate the best feed at the cheapest cost. It requires a lot of intelligence, time and energy to build set of feed formulas and we need to be sure that not only they are performing better than the competition but that we are actually getting better every month. I am sure that you will be interested in the following article.
The job of nutritionist changed a lot in the past years. Nutritionist does not prepare formulas anymore. They are responsible for defining the constraints that will enable optimization software to select the cheapest option. The formulation perimeter is the space allowed to the software between 4 distinct sets of constraints; nutritional requirement, non-nutritional requirement, raw material composition and raw material prices. The mission of nutritionist is to adjust this formulation perimeter (by increasing or decreasing the constraints) to optimize the feed performance (FCR, feed cost, growth, mortality, feed intake, etc…).
The difficulty of this process lies in the fact that raw material prices are constantly changing, thus, obliging the software to modify the formulas. Therefore, we cannot compare the performance of formulas made with today's prices with the ones made yesterday. The economical context varies and makes internal benchmarks difficult over time.
Without clear references, measuring formulation performance difficult.
Are we formulating more efficiently today than last year?
Are we getting better than competition in term of formulation know-how?
Are we innovating enough to increase our feed performance?
Are we recognizing the contribution and effort of our nutritionist in improving our feed performance?
It is critically important that we define the proper tool to answer these questions in order to ensure that our formulation skills are improving and that nutritionist and all support functions are thriving to increase feeds performance. FORMULATION PERFORMANCE INDEX The tool that we propose is called FPI for Formulation Performance Index. It is used to monitor the improvement of the formulation skills during a period of time. During the year, formulation will change due to;
modifications of the formulation "perimeter" (increase / decrease of constraints)
change in the prices of ingredients.
As we are trying to evaluate if the changes of the perimeter done by the formulator are having a positive impact on the feed, we need to eliminate the ingredient prices variation from our evaluation. To do so, at the end of the period (e.g. end of the year), we simulate a formulation by entering into the software the same ingredient prices that was used at the beginning of the year.
If the formulation perimeter has not been changed by the formulator, the formula will be the same as at the beginning of the period and it will underline an absence of improvement during the period.
If the formula coming out from the software is different than the formula at the beginning of the year, it means the nutritionist has modified the perimeter and it is time to evaluate the impact of those change on the feed performance.
We will test the 2 formulas in a farm to calculate a performance index based on key parameters.
The weightage is very important as it illustrates the company strategies regarding the importance that the management give to each of criteria. Some companies will favor the importance of FCR, other the ADG and still others will emphasize cost reduction. You can add any other dimensions as feed intake, diarrhea score. The table will have to be adjusted for every company depending on their strategy. A FPI higher than 100% shows that the formulation perimeters improve on the period. This underlines a good performance of the nutritionist team and should be celebrated as an important achievement. Bear in mind, however, that it is not because your FPI is improving that you can guarantee you are getting better than your competition as they are doing research as well. But at the opposite, you can be sure that you do not get better than your competition if your FPI is not improving.
f you are interested in implementing such tool, our team of experts can help you to design the FPI tool to enable you to monitor your formulation performance. The benefit of such tool is that it gives a strong message to your nutritionist, technical and research team that any improvement of the perimeter will be recognized and celebrated. It is a strong incentive to innovation in order to precise nutritional and non-nutritional requirement. Every study should teach us something to incorporate into our formulation perimeter. Otherwise the finding will not be converted into economical benefits.
------ WE CAN NOT IMPROVE WHAT WE CANNOT MEASURE ------
The second strong message supported by the FPI is that our job is not to release new formulas. Animal nutrition excellence is not related to the number of formulas we have been prepared but rather to the number of constructive change we brought to the formulation perimeter; defining more accurately animal requirement, understanding better the non-nutritional constraints and monitoring more precisely the raw materials composition. The relevancy of these changes will be ultimately assessed through the FPI. Finally, the FPI help to make arbitration regarding formulation strategy. We all know how to improve feed performance (reduce FCR and increase growth speed) but it always has a cost. The right decision is when the decrease of FCR compensates the increase of material cost to minimize the economical conversion of our feed. By calculating a weighted average between FCR decrease and Cost increase, the FPI help to find the optimal balance between these two opposite drivers that are feed performance and material cost. It will help nutritionist to explore new directions to achieve the highest FPI. The FPI requires field trials and cannot be done for every formula. We need to select only few formulas to be monitored. That would be sufficient to drive positive team behaviors that will, in return, have positive consequences on others formulas as well. It is important to understand that the December formula optimized with January prices are only design for the FPI evaluation but should be not sold on the market as it does not reflect the market situation. It is just designed to benchmark the formulation perimeter.
Related tags: Formulation