Focus on the Impactful, Not the Easy to Measure, By Todd Thurman, SwineTex Consulting Services, LLC

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Photo: @helloquence via unsplash.com
Photo: @helloquence via unsplash.com

Todd Thurman, Consultant

SwineTex Consulting Services, LLC

As a consultant, I’m often asked by clients to help them solve specific problems. New or existing clients will call and tell me about a problem they’re having such as poor farrowing rates in gilts or high mortality in the finisher. I’ll then help them analyze the problem and develop and implement a strategy to solve the problem. Sometimes, however, I have a different conversation with the producer, about prioritizing opportunities. As I’m analyzing the problem that they’ve asked me to help with, I sometimes uncover bigger, more important problems and end up encouraging the producer to focus less on the problem they’ve identified and more on the problem or problems that I think have the potential to have a much larger impact on their ability to achieve their goals.

The reality is that we all have limited resources. I’ve never been to a farm that had an unlimited budget, unlimited space and unlimited people. I don’t expect I ever will. Since our resources are limited, it’s extremely important to make sure that we’re deploying those resources in the places that will have the most impact. Let’s say you have two problems, one high-impact and one low-impact. If you have the necessary resources to fully focus on both, that’s great, but if your resources are too limited to focus on both, you’re giving up an opportunity if you focus on the low-impact opportunity at the expense of the high-impact opportunity.

Why would someone focus on low-impact opportunities and neglect high-impact ones? As usual, the answers are many and complex but oftentimes it’s one of two reasons. First, they simply didn’t identify the high impact opportunity. Second, they have given preference to the lower-impact opportunity because it’s easier to solve or, more often, easier to measure. Here are a few examples that should help illustrate my point.

A client asked me to help them reduce their pre-weaning mortality. I spent a significant amount of time in the farrowing house looking into the problem and ended up recommending something they didn’t expect. I told them to stop worrying about pre-weaning mortality. I explained that even if they were successful in achieving their goal to reduce pre-weaning mortality, the impact on their profitability would be minimal. Using a simple tool to calculate the economic value of productivity changes, I was able to show them that a decrease of 2 percentage points in pre-weaning mortality would have a very limited impact on profitability, only about $.27/pig.

Instead of focusing on pre-weaning mortality, I identified what I considered a much bigger opportunity, increasing sow lactation feed intake. They weren’t directly measuring sow feed intake at the time, but we later found out that lactation feed intake was more than 2.5 lbs (1.1 kg) per day lower than the targets I recommended. Through an analysis of expected economic impacts of performance improvements, we estimated that there was a potential value of more than $3.00 per pig if we could achieve our targets for lactation feed intake. By refocusing our efforts on lactation feed intake, we were able to have a much higher impact. When considered on the scale of this particular client’s business, the impact of improving pre-weaning mortality was around $60,000 but improving lactation feed intake was worth more than ten times that amount, almost $700,000. As is often the case, we actually ended up improving pre-weaning mortality any way as a result of improving lactation feed intake. Ironically, we ended up being at least successful at “accidentally” reducing pre-weaning mortality by not focusing on it than if we had focused on it.

Here’s another example. I had a client that asked me to come in and evaluate their wean to finish system. They were at a point where they were very happy with their sow performance but felt they had neglected the wean to finish part of their system (a common situation by the way). As I talked with the managers, reviewed records and spent time on the farm, I came to realize that the client was actually quite focused on feed conversion but didn’t pay much attention at all to growth rate.

As I dug in a little deeper, I found out why. This was a client that was very focused on the bottom line. They found it very easy to calculate the impact of feed conversion on their profitability. Like most good producers, they had a good handle on their feed costs and they knew that better feed conversion meant the same performance with less feed. The value of feed conversion was simple, they just calculated how much feed they’d saved and how much that amount of feed cost. When looking at growth rate, or average daily gain, the impact wasn’t as clear.

Calculating the value of average daily gain is not quite as straight forward, especially in a large system with complex logistical challenges. There are essentially two ways to take advantage of average daily gain, either heavier market weights in the same number of days or the same market weights in fewer days. While that might seem straightforward, it practice, it’s often a difficult calculation to make. The value depends on weight-based incentives from the packer and availability of finishing space which can be a moving target.

Because calculating the value of average daily gain was difficult but easy for feed conversion, the system had focused very heavily on improving feed conversion and basically ignored growth rate for many years. As a result, they were very competitive compared to FCR benchmarks but had fallen way behind on ADG benchmarks. In fact, some of the practices they’d implemented to improve FCR were actually having a negative impact on growth rate. Any nutritionist will tell you that the easiest way to improve FCR is by limiting feed intake. On the other hand, the best way to improve ADG is by maximizing daily feed intake.

The reality is that as managers, in order to find optimal performance levels, we have to balance the two. I helped the client develop a relatively simple way to calculate the economic impact of ADG with reasonable accuracy allowing them to confidently establish targets. This led to more focus on growth rate and they were able to maintain their advantage in FCR while closing the gap in growth rate.

So, what do these examples have in common? They are both examples of producers focusing on things that are easy to measure instead of most impactful. I was talking to another consultant a few days ago. He asked for advice on helping his clients get results and I told him the only thing harder than getting people to focus on the right things is getting them to stop focusing on the wrong things. It’s all about priorities in a limited-resource environment. It’s not that those wrong things are unimportant, it’s that they’re RELATIVELY unimportant. So, as you look at opportunities in your business, I strongly encourage you to make sure you’re focused on the right metrics even if those happen to be a little more difficult to measure. The extra time to develop and implement a system to measure those high-impact metrics will pay huge dividends down the road.

About the Author: Todd Thurman is an International Swine Management Consultant and Founder of SwineTex Consulting Services. SwineTex is a US-Based provider of consulting and training services to the global pork industry. To learn more about SwineTex Consulting Services, send an email to info@swinetex.com or visit the website at www.swinetex.com.

 

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