Late
last month Cargill’s Feed Management Systems (FMS) announced the formation
of Pennent Advisory Services, a new global consultancy service providing
customized advice for feed mills “seeking higher efficiency and profits.” Based
on the company’s Pennent mill manager software brand, the idea for the advisory
service spin off was being considered for some time. While FMS has long
provided operational advice to its customers; however, Pennent “represents a
formalized approach” that is supported by Cargill’s best practices expertise.
“Under
Cargill ownership* we’re able to attract experts and advisors that have the
experience within Cargill’s feed manufacturing platform to help our customers,”
says Brad Guyer, FMS Global Portfolio Manager at Cargill. “Basically, Pennent
Advisory Services will provide a human element to the ERP capabilities of Pennent
software.”
However,
what’s interesting about this new service is that these customers are, in fact,
Cargill Animal Nutrition competitors. In Guyer’s opinion, this provides an
“exciting” opportunity for FMS to help its clients thrive based on the software
provider’s alignment with a major feed manufacturing company – specifically, by
offering up best practices and management strategies to its feed milling
customers.
For
example, to gauge interest in this concept, FMS gathered 17 prospective and
existing customers representing 6 million tons of annual feed production.
During this meeting, the group presented Cargill’s strategies for dealing with
the current and looming demands of the Food Safety Modernization Act (FSMA).
Obviously, a company of Cargill’s size and scope has teams of people dedicated
to navigating the new regulatory environment; however, the small- to mid-sized
mills that do not have access to those resources benefit from the applied
knowledge of their peer.
Beyond
this knowledge share, Pennent Advisory Services seeks to provide on-site
assessments of its client’s operations by providing in-person consultations
with feed manufacturing and operations experts who work collaboratively with
them to enhance their performance; identify problems; and develop solutions to
a range of challenges.
“Based
on [Cargill’s] knowledge and resources, there is someone out there with an eye
to improve the existing operations and we want to allow the customer to
supplement gaps in their position by aligning with Pennent Advisory Services,”
he explains. “We’re trying to assess the customer’s need before introducing a
software solution.”
In his
opinion, the beneficial training and support model fostered by the supplier
community 30 years ago eroded with competitive pressures and how the
agricultural cooperative landscape has changed. The market is interested in
receiving this type of guidance, but hasn’t had an ally to turn to regarding
improved operational inefficiencies, such as shrink/inventory control; energy
savings; maintenance; and product quality.
“From
what we’ve seen there is a trend for more consultancy service on the nutrition
side, but we’re seeking to fill the gap on the best manufacturing practices and
mill management front that is supported by the software,” Guyer says.
“Currently nobody’s playing in the space with a best practice approach. We’re
not in it for consulting fees; we’re in it to help our customers find value
through our solutions and services. If they don’t find value, they don’t pay
for the assessment.”
As
this service is meant to “truly try to help the industry,” mills interested in
the service and the regional “thought leadership” meetings are not required to
be strategic partners with either Cargill or FMS. Altruism aside, one has to
wonder: What’s in it for Cargill?
“The
long term goal with Pennent Advisory Services — and one that we share with
Cargill — is to become a partner-of-choice to our customers,” Guyer explains. “Getting
there requires us to leverage our knowledge, know-how and tools to advance
their business. Our business model is simple: we believe that our experience in
feed operations can help customers uncover hidden revenue and profit
opportunities.”
To
date, the company retains five full-time advisors.
Moving
forward, it will be interesting to see how this collaborative model plays out
and who, ultimately, will benefit the most from the service.
To
view a video explaining Pennent Advisory Services and its services, click here.
* Note: While FMS is owned by Cargill,
it is a separate company and goes to market independently of other Cargill
businesses.
