P.PSH.1342 - A guidepost to digital transformation: Non-vertically integrated beef cattle feedlots

Summary

Smithfield Cattle Company have agreed to commence a Collaborative Co-Innovation Strategy program with MLA over a three year period commencing October 2021. The focus of the program will be to support the development of Smithfield Cattle Company growth strategies to be achieved via the development of innovation capability in the following areas: feedlot digital innovation and infrastructure, antimicrobial stewardship, sustainability and environmental stewardship (CN30), animal health, welfare and genetic improvement.

Objectives

The primary objectives of this project were to explore and pilot methods of digital transformation relevant for cattle feedlots across the following four key business areas:

1) Digital innovation and infrastructure

2) Antimicrobial stewardship

3) Sustainability and environmental stewardship (CN30)

4) Animal health, welfare and genetic improvement

An additional overarching objective throughout the project was to document the methods employed and challenges encountered to provide a useful and commercially practical ‘guidepost’ for digital transformation in beef cattle feedlots.

Key findings

The key findings from the project were as follows:

• Digital transformation is commercially viable: the cost of connectivity and digital automation/delivery was previously prohibitive or unknown. The project demonstrated that digital transformation can be achieved across both operational and management functions in a standalone non-vertically integrated feedlot with a commercially positive impact.

• Digital champions drive progress: having the right software and systems within a business is important, however the true value is in unlocking the potential of these systems. The project demonstrated that for every system, it needs to have its own champion to ensure its success.

• Data culture can be nurtured: a data culture encourages making decisions based on objective data, with decision-making enhanced through standardisation and industrialisation. The project demonstrated that this is a significant cross-benefit of automation efforts and creates synergies with intuition-based decision makers.

Benefits to industry

The Australian red meat industry is fragmented vertically throughout. Clearly, vertically integrated operations can take advantage of their control across the supply chain and gain efficiencies through information sharing, end-product pricing and centrally managed resourcing.

However, many of the current and future challenges surrounding the grain-fed beef industry and their solutions will rely on cooperation across the supply chain. Given the majority of feedlots are not vertically integrated (~78% of industry capacity), it may be more important than ever that systems connectivity and the capacity for information-sharing and information quality across these smaller industry players is strengthened. This will help ensure all industry participants are better prepared to address broader red meat industry complex areas.

Fast-approaching are challenges in sustainability, where information sharing across activities (and their associated emissions) and industry will be critical. Another area is around the need for industry qualification (and quantifying) of animal welfare standards, which will have broad implications on the grain-fed beef industry’s future social license to operate.

MLA action

The Co-Innovation Program MLA will continue supporting leading Australian red meat value chains to fast-track their innovation and growth strategies.
The program is customised to match the specific business and innovation goals of participating enterprises and their value chains with a deliberate focus on partners who share MLA strategic innovation focus areas.

Future research

Key recommendations for industry arising from the project are as follows:

• Get connected: invest time to understand your connectivity infrastructure and ensure that access to internet is prioritised.

• Invest in your systems: underutilisation of systems – particularly operational ones, is often overlooked. Oftentimes key operational systems (e.g. FMS) need to be evaluated to ensure they are being fully utilised to address problem areas. Pick a champion for each system.

• Leverage the cloud: given the connectivity challenge can at least be partially solved with new technologies (Starlink), offload compute resources to cloud providers to ensure operators are not impacted by digital transformation initiatives and avoid expensive infrastructure upgrades.

• Work backwards: decide on key areas to improve and/or areas of concern, then work backwards to determine the data, technology and systems required to effect technological change in the chosen area. This helps alleviate decision paralysis.

• Apply a common data model: use a common data model across your operations and dashboards to ensure that metrics are consistent with ordinary business user definitions.
Future research in this area may be around enhancement of connectivity solutions to enable live-data tools to be used by operational users at point of occurrence.