Friday, March 15, 2013

Does CI Work?

I have proposed that the Chicken Supply Management System should be applying true CI (Continuous Improvement).  I have received some feedback, stating that my idea of CI may work for a task, but not for animals or plants.

I beg to differ.

The milk data is from FAO, as reported by Canada to the United Nations.  You can see all of this data via Gapminder, Agricultural dataset.  Here is a graph showing the Canadian cow milk yield, kg of milk per cow per year).  Notice the 2.5% per year improvement in milk yield.

Part of the improvement is genetics, but their is also the feed regime, the milking methods, health, etc.

Since 60% of the cost of chicken is the feed costs, this is obviously a place to focus the efforts to improve.  The rest of the data is from Statistics Canada

Above, we see the 1.39%/yr improvement in the grain corn yields in Canada.  Corn is one of the most important grains used in chicken feed.  The second major ingredient for protein is soybeans,  Here, we see a

0.793%/yr improvement.  Wheat is also used in some feed formulations, and here we can see a 1.33%/yr


I had suggested 4% learning rate for raw materials, as recommended by NASA.  Milk came the closest at 2.5%/yr.  Perhaps with a more focused program, with better tools, and industry-wide efforts, more could have been achieved.  Individual efforts are good, but much more can be achieved when the entire industry take CI on as a project, and work as a team to achieve the goal.

Hopefully, this is enough proof that improvements can be achieved in agriculture, as they have been done for years.  People (ie. farmers) and processes (tractors, cultivators, sprayers, etc.) are the most important part of getting feed to the chickens.  I believe all of these systems can be significantly improved.

McDonald's Restaurants have kept their same suppliers for meat and buns for decades.  They have established a hard-fought continuous improvement relationship, and achieved excellent results.  McDonald's competitiveness and success has greatly depended on its suppliers.

I believe that the success of the chicken farmers is highly dependent on their feed suppliers.  They need to work closely together to achieve what needs to be done to supply high quality, low cost chicken to the Canadian public.

So if all of these yields are showing improvements, why is the cost of the chicken's feed going up, instead of going down?  It is because somebody is gaining excess profits, or the other costs have been allowed to run a muck.

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