Culture of Lowest Cost Production

I will leave specific ways to lower production costs to the economists and successful producers, but here are a few practical ideas on how to develop a “culture” within your Company where everyone strives to eliminate waste, improve efficiency and keep costs at their lowest practical level:

• Explain costs in the simplest form possible so that employees can relate their actions to costs of production—examples:
  • cost per day to run a heat lamp or heat mat
  • cost per pound of each feed ration
  • total labor cost per hour for the entire operation
  • cost per dose of each pharmaceutical
  • value of each animal (and $$ invested in each animal) at each stage of growth or each weight range
  • $ value of each pig produced over the target number
  • Cost per hour to run a heater or furnace

• For a time, label each bottle of medicine used with the cost and the cost per dose so they see the value of the materials they are handling.
• Use a magic marker and write the total cost per bag on each bag in the feed mill so that people can see the value of the materials they are handling.
• Include an explanation of costs as a part of your regular training.
• Have budgets for each area—feed budgets per group, supply budgets per month or per stage of growth, vet/med per pig, etc.  Track them regularly and discuss them with the staff on a consistent basis.  Help them to see how their daily actions affect each of these costs.
• When someone has an idea be sure to ask for their analysis of the cost/return for this idea.  If they don't know how to do a simple analysis, or don't have the information they need, help them.  Instill in them that a critical part of each suggestion is the financial returns that it could generate.
• Take pictures of proper and improper feeder settings and have them readily available for comparison and as a training tool.
• Include the discussion of costs in your everyday conversations and daily discussions of duties.
• During your regular staff meetings, talk about input costs and their affect on the bottom line, recognize actions—no matter how small—that employees have taken to reduce costs since the previous meeting.  Have a part of the meeting dedicated to taking ideas for reducing costs and improving efficiency.

Don Tyler; Tyler & Associates