Advance your benchmarking to the next level

Monday, November 23, 2020

Producers can increase operational resiliency by identifying key performance indicators and tracking improvements over time.

By Kate Ayers

Although benchmarking is a familiar concept in pork production, we still have significant opportunities to maximize the benefits of this data collection and analysis strategy, some industry experts say.

Producers can further optimize their operations by digging deeper into their data and using all information to its full potential.

Benchmarking "starts with an internal plan. What are you trying to achieve?" asks Matthew Rooda, the president and CEO of SwineTech.

Benchmarking "helps us know where we are, how we stack up against others and helps us identify things that we want to target, track and fix over time. You can't go somewhere successfully if you don't measure" progress.

SwineTech is an Iowa-based ag-tech company with software that pork producers can use to develop more efficient farrowing operations. Users can also predict and manage costs and maximize revenues to address labour and process inefficiencies, Rooda says.

This month, Better Pork speaks with benchmarking experts to learn how producers can use their data effectively, make meaningful comparisons and achieve their goals.

Benchmarking basics

Pork producers can use internal and external benchmarking to monitor progress and enact changes in their businesses.

Through internal benchmarking, producers can measure and track improvements in their operations over time. Through external benchmarking, producers can compare their processes and performance metrics to databases containing aggregate data from participating farms, Rooda says.

Benchmarking "helps us better understand what everyone else is doing, compare key drivers for production and profitability, and allows us to best understand how we can set goals for the next quarter, year, and so on," he says.

Technological advancements have helped to streamline and simplify the benchmarking process. Producers can use monitoring equipment, such as sensors, to constantly collect information. Farmers can track such parameters as "daily high and low barn temperatures, humidity, heater run times and water consumption," says Dr. Tom Stein.

He and his team developed PigCHAMP software, a swine production management program. (PigCHAMP is a Farms.com company, as is Better Pork.). Now, Stein serves as the senior strategic adviser at Maximus Systems in Saint-Bruno-de-Montarville, Que. This company provides producers with automated solutions to ensure animal well-being, optimize results, and improve the environmental footprint of operations, the group's website says.

Producers can also record feed, supplement, and medication amounts, live and carcass weights, and hog purchase and sale numbers, adds Michel Vignola. He's the director of swine technology application at Trouw Nutrition Canada in St-Elzéar, Que. This company offers species-specific nutritional solutions including feed concepts, products, nutritional expertise, benchmarking, and production modelling.

As a result of developments in automated systems, pork producers don't have to do a lot of physical record keeping anymore, says John Molenhuis. He's the business analysis and cost of production specialist for the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) based in Brighton.

Producers can use benchmarking data to "identify strengths and weaknesses that exist at technical" or financial levels, says Vignola.

"Once you have identified where you are better or weaker than others, you can develop a plan based on your priorities and make decisions based on long-term goals," he says.

Benefits and barriers

As with any technology or new practice, users may need some time to adjust to updated system operations. But producers can realize the full potential of farm optimization tools through routine use and consultations with professionals.

One of the biggest challenges that farmers may face with operational benchmarking is ensuring they compare apples to apples, says Stein.

Each information or data collection system has its own calculation methodology and the pork industry does not have a uniform set of regulations or national standardization for benchmarking. So, farmers must ensure they compare their production parameters to those of similar-sized operations or find a group of producers who use the same information system.

Otherwise, farmers may "chase the wrong rabbit" or miss issues that affect their bottom lines, Vignola says.

"Consistency is key when benchmarking. Some producers have farm management groups they work with. In a group of 10 to 20 farmers, everyone collects and reports data" in the same format, says Molenhuis.

"PigCHAMP, for example, has a standard benchmarking template and report."

To streamline this process, pork producers should ensure they have solid understandings of their record-keeping practices before benchmarking with others.

Some "people start to look for external benchmarks before they have good handles on their own numbers. Get a good understanding of what your operation looks like and then you can compare data to operations you want to be competitive with," Molenhuis says.

In addition, "the data is only as good as the accuracy with which it is entered," says Rooda. And context is important when producers make comparisons with other farms; benchmarking data is only a snapshot of operations' production records.

Some producers may think that "all the variables in the farms they benchmark against are exactly the same and so the numbers stack up the same," Rooda says. But "so much goes on in those other barns. The biggest challenge is planning based on the information you get from benchmarking. To truly know where you stand amongst other farms, you must look at more than just the numbers.

"We must take a step back to try and understand the various factors," such as staff turnover, disease presence and operating practices, "that give us an advantage or disadvantage," he says.

Some production systems may not accommodate benchmarking as well as others. "In large operations that work in batches and do all-in and all-out production patterns, it's much easier to measure and generate data and benchmark," says Vignola.

Some "farrow-to-finish operations, in contrast, work in a continual flow basis and have pigs in the barn all the time." Producers who manage this type of operation have fewer benchmarking resources, he says.

Also, farmers who own and operate multiple enterprises may find it challenging to collect, allocate and analyze the copious amounts of data needed to calculate costs of production for each commodity, Molenhuis says.

Producers can use various software options to address this challenge, he adds. OMAFRA also has cost of production calculations and budgets that farmers can use to "split out how the different enterprises are performing," he says.

While benchmarking depends on mass amounts of quality information, farmers need to be careful they do not get "swamped by data," Vignola says.

"Some technologies produce a lot of data but then producers have to make the time and have the discipline to regularly review and analyze the numbers. Sometimes, too much data is not better than not enough" data.

Producers who understand their information systems, record quality data, and make meaningful comparisons can use benchmarking to enhance their profitability and long-term sustainability, Vignola says.

Producers can use "benchmarking as a tool to enhance training on farms so that employees understand the variables in pork production that impact specific production metrics," says Rooda.

"Hand-held devices that allow for on-farm data entry are more robust and easier to use than ever before. These devices can help producers reduce labour, streamline processes, and improve the quality of care given to sows and piglets."

Since farmers can participate in larger benchmarking groups, they "can build relationships and collaborate and brainstorm together," says Rooda.

Companies that build information systems may offer additional resources for producers using their software.

PigCHAMP, for example, helps producers "set performance goals, and provides a percentile ranking for each farm value based upon comparisons to other eligible herds on a quarterly basis," says Susan Olson. She's the PigCHAMP knowledge software information services manager based in Ames, Iowa.

Overall, "the goal of benchmarking is not to be the best, but rather to improve" over time, Vignola says.

Molenhuis agrees.

"It is important that producers have feedback loops," he says.

"Identify parameters, make changes, and evaluate what those changes did for you. Then, farmers can make tweaks to those changes to improve" their operations moving forward, based on priorities and performance goals.

Level up

While the longer-standing benchmarking approaches offer clear benefits, further technological and analytical advancements could drive even greater operational success, some stakeholders say.

Farmers could find benchmarking even more useful if systems could help them determine the production and management factors that contribute to higher profitability and operational resiliency.

"The high-productivity farms are the ones that have high litter sizes, high farrowing rates, and low pre-wean mortality rates. Those aspects are clear and easy to see," Stein says. But benchmarking data does not show "how those top-ranking operations are different from the lower-ranking farms. What specifically are the top-ranking operations doing?

In the pork industry, "we don't have the ‘enabling factors' – the factors that lead to outcomes that we want. How do we organize our insemination practices? What are our breeding protocols? How do we train people? How long does it take us to process a feed or packer invoice? These areas are where the insight is, and we aren't using this information for benchmarking," Stein says.

"We need to move to a strategic benchmarking approach."

Another advancement that could enhance the benefits of benchmarking is collecting data on staff's barn protocol compliance in real-time.

The pork industry has "many SOPs (standard operating procedures) that are proven to work, and yet we see a good amount of inconsistencies within operations around these SOPs. Poor insights, poor training, disease outbreaks, labour turnover, etc. can account for these inconsistencies. I do not see improvements happening in these areas without the use of digital tools," Rooda says.

"Implementing tools that allow for real-time data capture could help producers understand which management processes are truly being followed. This capability will create a newfound ability to compare to operations that are as similar as possible."

Real-time data collection on SOPs "exposes a whole new suite of KPIs (key performance indicators) that can be tracked for the benefit of producers and the pigs in their care," he says.

Fortunately, stakeholders continue to update information systems to meet the diverse needs of pork producers. PigCHAMP, for example, is upgrading its benchmarking software to analyze more production parameters, Olson says.

Some developments include investigating genetic differences in reproductive data (i.e., total born, farrowing rate, etc.) and linking these genetic traits to grow-finish performance, analyzing historic trends of reproductive performance, examining historic trends of seasonal performance, and considering performance differences based on facility type or equipment, Olson says.

Overall, when it comes to the on-farm application of benchmarking data, producers get out what they put in. "Dive deeper and try to reduce the number of variables that impact success," Rooda says. BP