© iap pty ltd 1 time management – you are in control, if you choose to be!

© IAP Pty Ltd© IAP Pty Ltd 1

Time Management – You are in Control, if You Choose to Be!


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


Historical World Oil Price – Nominal & US$2006

Globally Confronting Change in Cost of Our Master Resource Energy


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


Confronting Real Domestic Issues

IMPORTED FROM BRAZIL

Flat World Economy ≠ Domestic Sustainability

How can Brazil Produce Beef so Cheap @ 40% Import Duty into SA? Lower Energy Production

Cost!


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


Global Meat Processor Presence# 1

# 3

#2


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


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)


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


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?


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


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


Seasonal Daily Consumption Period & Feed Team Work Day

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attle

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Work Day


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 - people2. Constraints – time 3. Input Elements – cattle & feed

ingredients4. Transformation – growth or tissue

deposition5. Products – carcass


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 (1.0-1.4t/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)


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


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


Feedlot Revolves Around Feeding Cattle

Feed Load/Mix

Feed Preparation& Processing Consumption

Feed Delivery


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


Repeated Feed Team Action Cycle

Ration Mix

Ration Delivery Pens Feed Order

Ingredient Loading

Actions require a quantity of time



Ration Mix


Ingredient Loading

Ration > kg/pen = kg/hd/d< 1min



Ration Mix


Ingredient LoadingDiet Ingredients kg/mix

4-7min




Ration Mix


Ingredient LoadingDiet Ingredients kg/mix

4-7minRation mixing

4-5min

Travel time to row/pen 2-8min




Ration Mix


Ingredient Loading

Kg/pen > # pens2 - 4min/pen

Diet Ingredients kg/mix 4-7min

Ration mixing4-5min


Travel time to Feed shed 2-8min



Ingredients Loading Accuracy (4-7min)

By-Product 1

Premix

Hay/Straw Silage

Maize

By-Product 3

By-Product 2

Ration

Mixer Load Impacts 200-800 hd



Ration Mix


Ingredient Loading

Kg/pen > # pens2 - 4min/pen

Diet Ingredients kg/mix 4-7min

Ration mixing4-5min

Trigger Pull


Travel time to Feed shed 2-8min



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


Seasonal Daily Consumption Period & Stockman Work Day

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% C

attle

Fee

ding

Summer Winter

Work Day

High Cattle Activity Low Cattle Activity

No Cattle Activity


Create Consistency in Stockman Actions

Daylight is start of day for cattle - feeding behavior > 1st light & after midday

Assess pen as group of cattle within 1st 3hr of daylight

Natural posture = health Unnatural posture = non-health Trigger Pull is critical

observation time of cattle within pen > natural versus unnatural posture


Daily Stockman Action Cycle

Identify Unnatural Posture

Assess Cattle Posture

Repeated Actions of Cycle

Treatment

Pull Cattle Trigger Pull


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


Herd of Buffalo


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


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)


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


Cargill Steps in Marketing Better Eating

1. Indentify breeds for specific meal product

2. Specific purchase of quality cattle

3. Paddock-to-Plate traceability4. Company owned feedlot5. Superior nutrition6. Accurate measurements (full

feedlot = 250,000 cartons)7. Stress free handling of cattle8. Hide & carcass cleaning9. pH-temperature decline10. Carcass tracking11. Carcass scanning (video image of

beef quality attributes)12. Carcass sorting

13. Carcass mapping 14. Carcass monitoring15. Enhanced food safety16. Advanced table boning17. Lean point verification18. Innovative packaging19. Product identification20. Cold storage21. Inventory management22. Quality control – ISO9001-200023. Customer focus24. Continuous improvement25. Environmental management


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)


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


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


EID + Software SchematicTracking Individual Cattle through Process – Wt, +Products, DOF, ADG,

Sort, $Inputs, $Health > Abattoir > +/-$ ROI


Individual Cattle IdentificationEach Animal is a Profit Centre

Lot No Visual ID RHINO Ind Bovillus BK Bovillus Backgrd Purchase Origin Buyer Pay Wt Off Weight Land $ Ind Sex Breed Ind Date1060 100151 Y Paddock Wingham BeefGreame Ward340 342 $704.85 SHEREFORD (horned)31/03/20061060 100196 Y Paddock Nagambie Denis Henderson413 351 $710.41 S ANGUS 31/03/20061060 100199 Y Paddock Nagambie Denis Henderson413 351 $710.41 S Shorthorn (inc Poll)31/03/20061060 100175 Y Paddock Wingham BeefGreame Ward345 347 $715.14 S BLACK BALDY31/03/20061068 46318 Y Y Saleyard Wagga Greame Ward409 402 $841.55 S ANGUS 21/05/20061069 46531 Y Y Paddock Yea Ed Lilbourne 433 433 $891.44 S Shorthorn (inc Poll)7/06/20061069 46756 Y Y Paddock Yea Ed Lilbourne 460 460 $910.57 S ANGUS 9/06/20061070 46831 Y Y Saleyard Deniliquin Denis Henderson395 357 $674.74 S ANGUS 15/06/20061070 2570 Y Y Y BackgroundSaleyard Wagga Greame Ward335 328 $693.89 H ANGUS 21/05/20061070 46804 Y Y Saleyard Deniliquin Denis Henderson430 388 $732.55 S ANGUS 15/06/20061070 2582 Y Y Y BackgroundSaleyard Wagga Greame Ward363 356 $749.76 H ANGUS 21/05/20061070 2524 Y Y Y BackgroundPaddock Macedon Denis Henderson364 364 $751.20 H ANGUS 21/05/20061070 46819 Y Y Saleyard Deniliquin Denis Henderson455 411 $773.84 S ANGUS 15/06/20061070 2503 Y Y Y BackgroundPaddock Macedon Denis Henderson391 391 $806.55 H ANGUS 21/05/20061070 2516 Y Y Y BackgroundPaddock Kyneton Denis Henderson404 404 $811.14 H ANGUS 21/05/20061070 2479 Y Y Y BackgroundPaddock Kyneton Denis Henderson404 404 $811.14 H ANGUS 21/05/20061070 2562 Y Y Y BackgroundSaleyard Wagga Greame Ward395 388 $813.61 H BLACK BALDY21/05/20061070 46812 Y Y Saleyard Deniliquin Denis Henderson480 434 $815.13 S ANGUS 15/06/20061070 46832 Y Y Saleyard Deniliquin Denis Henderson485 438 $823.38 S ANGUS 15/06/20061070 2393 Y Y Y BackgroundPaddock Howlong Ed Lilbourne 384 391 $825.60 S BLACK BALDY19/05/20061070 2400 Y Y Y BackgroundSaleyard Bathurst Neil East 405 393 $828.85 S BLACK BALDY21/05/20061070 2406 Y Y Y BackgroundSaleyard Bathurst Neil East 405 393 $828.85 S ANGUS 21/05/20061070 2495 Y Y Y BackgroundPaddock Kyneton Denis Henderson424 424 $851.05 H ANGUS 21/05/20061070 46823 Y Y Saleyard Deniliquin Denis Henderson504 456 $854.76 S ANGUS 15/06/20061070 2420 Y Y Y BackgroundSaleyard Orange Neil East 423 329 $873.49 S ANGUS 21/05/20061070 2403 Y Y Y BackgroundSaleyard Bathurst Neil East 435 423 $887.52 S BLACK BALDY21/05/20061070 2518 Y Y Y BackgroundPaddock Macedon Denis Henderson449 449 $925.45 H ANGUS 21/05/20061061 39022 Y Y Saleyard Cooma Greame Ward316 310 $663.48 S ANGUS 25/04/20061061 39018 Y Y Saleyard Cooma Greame Ward317 310 $665.48 S ANGUS 25/04/2006


Individual Cattle IdentificationIn Wt $ Animal In Dent Kill Date Ab Sex Ab Dent Exit Kg DoF ADG Tot HSW Fat Class Hosp $ HSW Grade $ Gross $ Dress% AFI340 $704.85 0 5/10/2006 Steer 2 630 164 1.77 324 19 $0.00 324 $3.80 $1,231.20 51.43% 16.05350 $710.41 0 5/10/2006 Steer 2 570 188 1.17 327.5 17 $0.00 327.5 $3.80 $1,244.50 57.46% 16.05350 $710.41 0 5/10/2006 Steer 2 615 188 1.41 329 12 $27.83 329 $3.80 $1,250.20 53.50% 16.05345 $715.14 0 5/10/2006 Steer 2 550 187 1.10 324.5 26 $29.53 324.5 $3.80 $1,233.10 59.00% 16.05440 $841.55 0 5/10/2006 Steer 2 695 141 1.81 373 14 $69.99 373 $3.80 $1,417.40 53.67% 15.95483 $891.44 0 5/10/2006 Steer 0 665 134 1.36 389 19 $21.77 389 $3.79 $1,474.31 58.50% 15.79474 $910.57 0 5/10/2006 Steer 2 735 118 2.21 417.5 28 $0.00 417.5 $3.71 $1,548.92 56.80% 15.79395 $674.74 0 5/10/2006 Steer 2 675 116 2.41 367 16 $29.53 367 $3.80 $1,394.60 54.37% 15.71360 $693.89 0 5/10/2006 Steer 2 675 141 2.23 369 18 $0.00 369 $3.80 $1,402.20 54.67% 15.71430 $732.55 2 5/10/2006 Steer 2 740 116 2.67 401 22 $0.00 401 $3.71 $1,487.71 54.19% 15.71390 $749.76 0 5/10/2006 Steer 2 660 141 1.91 372 18 $0.00 372 $3.80 $1,413.60 56.36% 15.71340 $751.20 0 5/10/2006 Steer 2 620 110 2.55 356 16 $0.00 356 $3.80 $1,352.80 57.42% 15.71455 $773.84 0 5/10/2006 Steer 2 705 116 2.16 397 24 $0.00 397 $3.79 $1,504.63 56.31% 15.71365 $806.55 0 5/10/2006 Steer 2 670 110 2.77 361 19 $0.00 361 $3.80 $1,371.80 53.88% 15.71400 $811.14 0 5/10/2006 Steer 2 660 111 2.34 374 16 $0.00 374 $3.80 $1,421.20 56.67% 15.71400 $811.14 0 5/10/2006 Steer 2 735 111 3.02 398 24 $0.00 398 $3.79 $1,508.42 54.15% 15.71425 $813.61 0 5/10/2006 Steer 2 700 141 1.95 385 26 $33.13 385 $3.79 $1,459.15 55.00% 15.71480 $815.13 0 5/10/2006 Steer 0 685 116 1.77 408 11 $0.00 408 $3.71 $1,513.68 59.56% 15.71485 $823.38 0 5/10/2006 Steer 2 725 116 2.07 416.5 22 $0.00 416.5 $3.71 $1,545.21 57.45% 15.71395 $825.60 0 5/10/2006 Steer 0 655 140 1.86 389.5 18 $0.00 389.5 $3.79 $1,476.20 59.47% 15.71400 $828.85 2 5/10/2006 Steer 2 640 138 1.74 374 29 $0.00 374 $3.80 $1,421.20 58.44% 15.71400 $828.85 0 5/10/2006 Steer 2 700 138 2.17 398.5 30 $0.00 398.5 $3.79 $1,510.31 56.93% 15.71420 $851.05 0 5/10/2006 Steer 2 660 111 2.16 376.5 30 $0.00 376.5 $3.80 $1,430.70 57.05% 15.71504 $854.76 0 5/10/2006 Steer 2 735 116 1.99 431 19 $0.00 431 $3.21 $1,383.51 58.64% 15.71400 $873.49 0 5/10/2006 Steer 2 660 111 2.34 366 17 $0.00 366 $3.80 $1,390.80 55.45% 15.71430 $887.52 0 5/10/2006 Steer 2 700 138 1.96 379.5 36 $0.00 379.5 $3.70 $1,404.15 54.21% 15.71420 $925.45 0 5/10/2006 Steer 2 710 111 2.61 399.5 21 $0.00 399.5 $3.79 $1,514.10 56.27% 15.71330 $663.48 0 9/10/2006 Steer 2 575 166 1.48 318.5 19 $0.00 318.5 $3.80 $1,210.30 55.39% 15.66330 $665.48 0 9/10/2006 Steer 0 615 166 1.72 339.5 22 $38.58 339.5 $3.80 $1,290.10 55.20% 15.66


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

Don’t re-invent the wheel – it is already in working mode


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!

© iap pty ltd 1 time management – you are in control, if you choose to be!

Documents

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production process slide

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