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Tracking Ingredient Activity to Empower Business Decisions

Award-winning inventory management system gives Feed Energy Company greater control over ingredient management.

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With the establishment of its Information Technology Innovation Award, the American Feed Industry Association (AFIA), in partnership with AgGateway and Feed & Grain magazine, recognizes leading feed and grain industry companies that incorporate new, advanced technologies in their routine business practices to help meet the demand of a rapidly developing world population.

For the second time since the award was first presented in 2011, Feed Energy Company has been named runner-up. The Pleasant Hill, IA-based company — which has two additional plant locations within the state, in Sioux City and Pacific Junction — specializes in the refinement of animal fats, vegetable oils and vegetable co-products into high-energy, liquid-feed ingredients that serve as the main energy source in the finished feed ration for livestock and poultry operations across the country, particularly those in the upper Midwest.

As a follow-up to its 2011 award-winning Nth Load entry, which objectively analyzes large data sets to provide comprehensible information for making critical and timely operating decisions, Feed Energy’s newest award-winning technological innovation, PIMS, focuses on inventory management. PIMS, which is an acronym for Production Inventory Management System, gives Feed Energy the ability to pull knowledge from its production system and utilize the data to make purchasing, pricing and marketing decisions.

“PIMS is an activity-based system,” says Ray Held, database analyst and developer for Feed Energy. “Not only do we track loads in and out, but we track all the activity that occurs to that load while it’s in the plant. Because we track more activity, we have more information … and that opens up the gamut for what we can do.”

Equally important is the fact that information — from all plant locations — is at everyone’s fingertips and is easily accessible since it is stored in one database.

“When I was hired in August 2013, I met with the plant superintendent and we talked about all the information that was available and where it was located,” says Dean Demers, cost accountant for Feed Energy. “Some information was in one location, while other information was in a different location, or in piles of paper on various spreadsheets. We determined we needed a common database for information that serves as one source that feeds plant statistics, financial statements, etc. … essentially all activity within the plant.”

Astounding products, customer service

The motivation behind PIMS’s development and implementation is, in large part, based on company founder Bob Riley’s desire and commitment to provide astounding products as well as customer service. “He embedded that mission when he founded the company in 1986, and we still live those [goals] today,” says Troy Shoen, director of marketing for Feed Energy, who notes that one point of pride comes from delivering loads when customers request them, rather than when it’s convenient for the company. “PIMS gives us the ability to better serve our customers and maintain our stringent parameters for quality. It’s a quiet enabler that allows astounding customer service and astounding product quality.”

Additionally, Feed Energy wanted to better track yield and quality data to evaluate vendor performance, with the ultimate goal of improving purchasing decisions. “With this system, quality shows up very quickly,” says Demers. “We can gather a lot of statistics about what happens to materials in our plants. We can, therefore, track a particular vendor to see what their loads look like, evaluating average performance to improve the statistics that affect future loads.”

Mike Shindelar, executive director of Feed Energy, says “Across the company we had information we wanted to see. But our operators were bogged down with completing paperwork and our purchasing team, as well as our accounting team, was stuck digging through paperwork that was slowing us down and costing us valuable time.”

Determining the right direction

The development process began with a meeting of personnel across all locations and from various departments — including accounting, merchandising, etc. — to gather needs and ideas as well as listen to and incorporate feedback. They created a complex spreadsheet for data tracking to identify what information fields were needed to accomplish production management goals, keeping in mind that the ability to generate custom reports, import and export data and scaling the database were all key features. Data security was also critical. As such, the use of a custom core data access system gives PIMS the ability to assign parts of the application based on role. It can also identify different users within one sign-in, therefore making it efficient for several plant operators to use one computer.

One challenge that was initially identified during the development process was that Feed Energy’s business, like its products, is fluid in nature. Each incoming ingredient load varies in its quality and is, therefore, handled and processed differently based on quality testing.

“Depending on the quality of any given load, it may need to be treated differently,” says Demers. “It might have to go to a different tank or it might have to be processed differently. What we add to it might be different, or how we separate it for fatty acid profile all depends on what comes in the door. Unlike if you’re working in a hard goods industry, in this business, the raw material changes and we need to be able to adjust to hit specs needed for outgoing products.”

It isn’t as simple as bringing in ingredients and shipping out finished products, Shoen further explains. “A lot of people don’t understand the complexity in what we do,” he says. “There is complexity in supply and demand as well as in the quality we deliver to our customers. We take very variable inputs and create very consistent products.”
Due to this challenge, the company realized a custom program, rather than an off-the-shelf ERP (enterprise resource planning), was needed. “One challenge with most ERPs is that they tend to be very broad,” says Held.

“With an off-the-shelf ERP system there would have been a significant cost, and the ability to make needed changes would have been difficult,” Shoen adds. “With a customized approach and an in-house development team, we can make changes on the fly. When we see something isn’t working, we can make changes very easily. The ability for a company our size — with just over 90 employees — to be able to accomplish this isn’t the norm. Most companies our size don’t have the team we have here to make this a reality.”

Ultimately, PIMS was designed on .Net framework to ensure longevity of the application and to allow for easy migration to a Web application in the future, thus making data accessible from anywhere.
“PIMS was designed to allow for continued business growth and changes,” notes Held, adding that a 2015 goal is to covert the system to a Web-based application. “With long-term flexibility in mind, we used modern tools and stayed away from third-party controls to avoid license and version issues. As a developer, my goals were to build a robust modern system that gives the company the flexibility it needs to progress.”

Implementation

Feed Energy rolled out PIMS in its first plant in January 2014, with the second and third plants following a few months later. And thanks to its custom, in-house development, the system has evolved as needed.
“One challenge is knowing how to get the information we need, in a format that users can provide,” says Held. “It takes someone to actually use it to know what is needed. It’s a work in progress.”

“We have a tremendous group of employees and we listened to their feedback,” adds Demers. One feature they have changed is how they track inventory. Sometimes it is tracked just by material; other times by material and load ID, or lot. Another change has occurred in how trailers are loaded for shipping. “Initially we had a system that worked mechanically, but it wasn’t efficient,” says Demers. “Based on training and watching operators, we made some changes to better mimic reality.”

“This really empowers our plant operators and gives them the ability to do things they’ve never been able to do,” adds Shoen.

Since implementing PIMS, the system has decreased paperwork and man-hours dedicated to material tracking and report generation, allowing customized reports to be quickly generated. For example, one PIMS entry has replaced four entries for intercompany transactions. Batch sheets, shift sheets, metric files and a materials ledger are no longer recorded on paper, but rather completed automatically through PIMS.

PIMS will also sync directly with Feed Energy’s accounting system, allowing simplified actions for invoicing and payment as material tracking is seamless.

“Likewise, this system provides us with an inventory accounting across all of our facilities,” adds Shoen, “so when we talk about filling orders, we have better information about what’s available and how to satisfy them.”

An added benefit is that PIMS gives Feed Energy the ability to monitor safety with built-in traceability, which will likely become a greater expectation in the future, notes Shoen.

“I think that’s where we’re going as a feed industry,” he says. “PIMS gives us the ability to trace products, before it’s mandated. It’s much better to be ahead of the game.”

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