Whitepaper. Towards a worry-free hatchery reaping the benefits of your equipment supplier s expertise

Transcription

1 Whitepaper Towards a worry-free hatchery reaping the benefits of your equipment supplier s expertise Jamesway - January

2 Towards a worry-free hatchery Reaping the benefits of your equipment supplier s expertise Contents 1. Introduction Managing a hatchery: a hell of a job Increasing challenges Increased importance of good hatchery management 4 3. Six sources of worry for today s hatchery managers It is hard to hire staff, develop their skills and keep them motivated The use of technologically advanced equipment requires specific expertise It is an ongoing issue to raise money for equipment renewal We must always be prepared for an equipment breakdown We need to continuously adapt to changing regulations and expectations It is difficult to identify the causes of declining productivity or quality issues 8 4. A comprehensive strategy to reduce risks The four pillars of a worry-free hatchery Reducing equipment related risks Reducing risks related to the internal organization Reducing risks related to the supply chain Monitoring the output quality Conclusion Disclaimer While this publication has been prepared with care, Jamesway and other contributors provide no warranty with regards to the content and shall not be liable for any direct, incidental or consequential damages that may result from the use of the information or the data contained. Copyright Jamesway. Reproduction is authorized providing the material is unabridged and the source is acknowledged. 2

3 1. Introduction The job of a hatchery operations manager may well be one of the most stressful positions in the entire food industry. The hatchery operations manager is the first person responsible for the smooth running of hatchery operations while facing a variety of challenges. These include maximizing productivity, finding and keeping skilled personnel, reliability and availability of incubation and hatching equipment, quality of breeder supply, and increasing administrative burdens. This whitepaper outlines the most important sources of worry that today s hatchery managers have to deal with and offers a comprehensive strategy to address them. The strategy is based on managing four areas: the equipment, the internal organization, the supply chain, and the output quality. Our main argument is that in all these areas, hatchery managers should develop and maintain an open dialogue with breeder and chicken farms as well as with their equipment supplier. The accumulated expertise of the equipment supplier may be of crucial importance in addressing the different sources of worry. 3

4 2. Managing a hatchery: a hell of a job 2.1. Increasing challenges A lot has changed in hatchery management since the early days of poultry industrialization. Hatcheries came into being in the 1940s as part of that industrialization process i. The physical separation of feed-mills, hatcheries, farms and processing plants enabled the poultry industry to improve productivity and reduce the risks of potential diseases spreading throughout the production areas. It also provided the opportunity to optimize the management of the separate production phases. Hatcheries, for their part, were to produce as many healthy chicks as possible from given batches of fertile eggs. This urged hatchery managers to strongly focus on maximizing hatchability rates, and pay great attention to the incubating and hatching equipment as well as to the related operating procedures. However, the job of hatchery manager has become increasingly challenging over the years for a number of reasons: Increased volumes Production volumes have dramatically increased due to rising poultry consumption and the economies of scale. In the US, annual poultry meat consumption increased from 36.9 pound per capita in 1965 to 82.8 pound in 2010 and an estimated 90.1 pound in 2015 ii. This growth is expected to continue in the upcoming years and decades. In parallel, poultry hatcheries have grown from small units with only a single small-scale incubator machine to large plants operating several high-capacity incubators. Today, hatcheries with a capacity above 1 million eggs per week are the norm. The trend is to develop hatcheries with a 4 million eggs/week capacity, which will give the hatchery manager even more responsibilities. More stringent requirements Requirements on the use of antibiotics, the safe use of disinfectants and animal welfare have become more stringent and demanding over the years, especially as a result of public pressure. These too provide additional challenges for the hatchery manager. Increased downstream expectations While hatchability rates continue to be of paramount importance in any hatchery, poultry farms now set higher standards on the quality of newborn chicks compared to several years ago. Recent research iii revealed that chick quality and the uniformity of the hatchery output have a profound impact on chicken survival rates, productivity and the eventual chicken meat and/or breeder quality. Again, it s the hatchery manager who has to face these additional challenges Increased importance of good hatchery management The job of hatchery manager has become increasingly challenging due to larger production volumes, more stringent requirements and increased expectations In view of these additional challenges, good hatchery management has become even more important in the poultry industry. But it is a highly complex job. Hatchery managers have primary responsibility for the quality of the produced chicks and are in charge of directing business-critical operations such as the receipt of fertile eggs, egg storing and setting, incubating and hatching, and newborn chick handling including debeaking and vaccination. At the same time, they have to deal with numerous constraints, including cost and budget considerations, investment strategies, compliance with guidelines and regulations, and organizational challenges such as staffing and 4

5 motivating personnel. In addition, the hatchery manager must ensure completion of essential activities such as equipment cleaning, disinfection and maintenance. Therefore, it is no wonder that hatchery managers are under stress. Since they are dealing with live production, the stress is 24/7. A worldwide inquiry among hatchery managers iv carried out in preparation for this whitepaper highlighted in particular the following potential sources of worry in managing and operating the hatchery: Staffing Limited availability of skilled, experienced and motivated staff Equipment technology Limited access to equipment related expertise, especially new technologies Budget Low budgets for equipment renewal and/or maintenance Spare part availability Critical spare parts not being readily available in the event of a breakdown Regulations and expectations Rapidly changing regulatory requirements and market demands Problem solving Difficulties in finding the root cause of productivity or quality issues. In the following chapter these sources of worry will be discussed in more detail. 5

6 3. Six sources of worry for today s hatchery managers 3.1. It is hard to hire staff, develop their skills and keep them motivated Staffing is an ongoing issue in hatcheries. When hiring operations staff, we often get the leftovers of the labor market, remarked one US hatchery manager. Specialists say that few people are willing to do this kind of job, given the rather dirty environment they have to work in, the repetitive nature of the tasks performed, the fact that the work doesn t pay very well, and the very limited chances of advancement. These problems arise not only in North America and Europe but increasingly also in the developing countries. This leads to the following issues: Short stays Employment durations in operational functions last for an average of only two years, leading to a high personnel turnover and the ongoing need to train new people. Lack of motivation Motivation and commitment to the job are often rather low. This is exacerbated by the fact that most people applying for operational jobs are either very young (seeking a first job experience) or 55 plus (awaiting retirement). Somewhat different difficulties arise for maintenance functions. Motivational issues are of less concern, but it is increasingly difficult to find qualified maintenance personnel on the labor market, to pay them a competitive salary and to offer them career development opportunities The use of technologically advanced equipment requires specific expertise Sophisticated equipment has been playing a major role in hatcheries ever since the early days of industrialized poultry production. Over the years, hatcheries have developed a solid in-house knowledge of the technology used, with respect to both operational procedures and maintenance & repair. This was possible because the technology used in incubator and hatching equipment was fairly conventional, complied to standards that every technician was familiar with, and did not change significantly over the years. However, recent technological developments tend to weaken the hatcheries ability to cope independently with emerging technological issues: Sophisticated electronics 21 st century hatchery equipment technology is less standardized and increasingly makes use of sophisticated electronic components. These components act like black boxes for anyone but the electronics expert. In addition, electronics technology changes at a fast pace, meaning that some of the components used in hatchery equipment often become obsolete or irreplaceable within five or ten years. Transition to Single Stage The recent development of Single Stage incubation as a high-performance alternative for traditional Multistage incubation tends to put hatchery personnel at a further disadvantage when faced with issues. Single Electronics technology changes at a fast pace, meaning that components often become obsolete or irreplaceable within five or ten years Employment durations are rather short and motivation and commitment to the job are often low Stage incubation not only uses entirely different technology but also requires a completely different organization of operations and maintenance activities. The anticipated impact on the organization is the reason why many hatchery managers are reluctant to make the transition to 6

7 Single Stage v. Problems related to technological expertise become even more apparent for customers having limited access to equipment related training. Some hatchery managers reported issues with training on equipment supplied by a third-party instead of the original manufacturer. Others mentioned unavailability of specific training in countries and regions outside or at the periphery of the supplier s network It is an ongoing issue to raise money for equipment renewal Several hatchery managers reported that they must operate with a shoestring budget and are often frustrated during annual budget negotiations. We must carefully balance repair costs on existing equipment with capital costs for replacement, remarked one survey participant. Indeed, hatchery owners tend to overextend the lifetime of their hatchery equipment. It is not uncommon for hatcheries to rely on the same incubator equipment for 30 years or more. While this is perfectly possible, it generally requires the administration of a comprehensive lifetime extension program to ensure high performance and reliability. Such programs often involve the renewal of at least some parts of the installation, including electronics and heating and cooling components, and require significant budgets. However, many hatchery owners are reluctant to provide these budgets. This may lead to reduced reliability, more equipment failures and eventually production losses We must always be prepared for an equipment breakdown Equipment breakdowns are among the most dreaded nightmares of hatchery managers. The consequences of failing equipment can be severe. For example, an incubator going out of service for just a few hours would probably mean losing the entire hatch of maybe 120,000 birds, which could represent a substantial loss. For this reason, hatchery managers follow a strategy along two lines: breakdown prevention and fast problem-solving. However, there are issues with both elements of the strategy: Breakdown prevention The prevention of equipment breakdowns is based on regular maintenance, including the preventive renewal of components. However, this strategy is under pressure due to the limited budgets, as was discussed in 3.3 It is an ongoing issue to raise money for equipment renewal. Fast problem-solving It is impossible to completely avoid breakdowns. One must not assume that even the newest machines will never have a glitch, remarked one survey participant. Therefore, a strategy must be in place to quickly react in the event of a breakdown to prevent losing the hatch. It may be possible to move the eggs to a free incubator (assuming one is available), but the time available to resolve the situation is very short, particularly in the event of a high temperature alarm. In any case the equipment must be repaired as quickly as possible. The problem is that this requires the onsite availability of spare parts, which often are not present due to organizational issues or budgetary restrictions. In addition, the equipment failure may require an emergency intervention by the equipment manufacturer, who usually is unable to respond within such a short timeframe We need to continuously adapt to changing regulations and expectations Changing regulations are a source of continuous concern for hatchery managers. One survey participant said: A great worry is how regulatory decisions will impact our industry going forward in 7

8 areas such as the use of chemicals, Avian Influenza and the responsible use (or non-use) of antibiotics for the wellbeing of animals. Other regulations such as increasing traceability requirements impact the business by imposing additional administrative burdens. The problem is that many hatchery managers feel that these regulations and expectations only further increase the stress level of their professional life, assuming that more stringent biosecurity constraints tend to narrow their options in managing the hatchery. Some of the biosecurity practices can even be perceived to be contrary to public expectations vi. It becomes increasingly difficult to offer good service, a hatchery manager told us It is difficult to identify the causes of declining productivity or quality issues It is essential for the hatchery manager that production quantity and quality remain at a consistently high level, given the extremely low margins in the poultry business. For this reason, hatchery managers must continuously monitor their output and take immediate action in the event of a declining trend. However, sometimes this proves to be a difficult task: Reduced hatchability rates A declining trend in the hatchability rate may be due to issues at the breeder farm, the transportation of eggs from the breeder farm to the hatchery, or an internal problem at the hatchery such as issues with egg storage, inaccurate or inappropriate programming of the incubator or a sub-optimal hatching environment. Declining chick quality and/or reduced growout success Chick quality and growout issues may occur along with reduced hatchability rates but may also occur independently. The causes may go back to the breeder farm or the hatchery or may be the result of a problem at the chicken farm. In all of these cases, it is essential to quickly identify the exact root cause. Hatchery managers cannot afford to take a wild guess and maybe experiment with adapting the incubation procedure or set points. Inappropriate actions may further deteriorate results and obscure the real root cause. Hatchery managers cannot afford to take a wild guess in the event of a declining trend in their production 8

9 4. A comprehensive strategy to reduce risks When looking at the concerns and worries discussed in the previous chapter, it is evident that they originate from various sources, including egg supply chain issues, labor market challenges, equipment related problems, economic and financial considerations, and requirements set by regulatory bodies. Luckily, not all of the issues that were mentioned are present in all hatcheries all the time. However, all of them have the potential of suddenly becoming acute and thus demanding appropriate attention. Therefore it is essential for any hatchery manager to develop a comprehensive strategy that addresses all of the potential sources of worry. Such a strategy should be based on four pillars: The equipment Continuous improvement and follow-up of equipment performance throughout the entire lifecycle should avoid breakdowns and prevent incubation and hatching results from deteriorating. The internal organization Optimization of internal processes should ensure personnel competency, operational effectiveness, and the ability to quickly identify the root causes of problems. The supply chain Quality assurance of fertile egg supply should avoid problems during the incubation and hatching process. The output quality Continuous monitoring of chick quality and growout results should provide essential information for early detection of issues. In the following chapter we will discuss how to reduce the risks in these four areas. Special emphasis will be on reinforcing the relationship Any hatchery manager should develop a comprehensive strategy to address the potential sources of worry with the equipment manufacturer. This is because we believe that the accumulated expertise among the best equipment manufacturers can be of great help for hatchery managers aiming for a worry-free hatchery. 9

10 5. The four pillars of a worry-free hatchery 5.1. Reducing equipment related risks Hatcheries are capital intensive businesses and therefore it is quite natural that many of the worries of hatchery managers directly relate to the installed incubation and hatching equipment. Are hatchery personnel able to operate the equipment to full capability and/or quickly solve problems related to machine operation? Will it be possible to timely update, upgrade or renew the equipment to cope with deterioration and technical obsolescence or to meet new requirements and adapt to changed circumstances? Is the organization always prepared for a possible breakdown of components? Our survey revealed that many hatchery managers have mixed feelings about these questions and often consider themselves ill-prepared. They feel that in the event of a breakdown or quality issue, they need to rely too strongly on their supplier/manufacturer, especially since a large part of the technologies used in the equipment are of a proprietary nature and will never achieve full standardization. The latter implies that the equipment supplier/manufacturer should always play a pivotal role in reducing equipment related risks. They have the expert knowledge of the equipment itself and they can provide valuable advice on It is essential for hatchery managers to develop and maintain a close relationship with the equipment supplier/manufacturer operating procedures and settings, cleaning and maintenance practices, and renewal strategies, applying experience acquired from their customer base. It is therefore essential for hatchery managers to develop and maintain a close relationship with the supplier/manufacturer. The possibility of maintaining close relationships should therefore be a major decision factor when purchasing new equipment. The following aspects should be considered: Access to machine expertise It is essential to be able to develop and maintain direct relationships with technical experts from the manufacturer, especially in the event of a purchase through a distributor. You should be able to directly contact experts for technical and operational advice when needed. Examples include continuous fine-tuning of operation procedures and settings (for example in older machines), optimizing cleaning procedures, and improving maintenance plans. Access to technical experts should be contractually guaranteed by service agreements. Network reach and proximity The manufacturer s worldwide network should be sufficiently large to enable onsite technical visits. In the event of an emergency, the manufacturer should be able to provide advice and ideally monitor the machine (over the internet). Training and service staff Training sessions should be given by technical experts with a sufficiently large experience at different hatcheries (see also the training considerations in 5.2 Reducing risks related to the internal organization). Personnel in charge of remote assistance (by phone or ) should be sufficiently qualified. Spare part and upgrade strategy One of the best ways of evaluating your supplier is by looking at their commitment to long-term support of older machines. The supplier/manufacturer should have developed a concise strategy on spare part management and equipment upgrades. For each type of equipment they should have listed the critical components, outlined their life expectancy in various circumstances, and be able to provide solutions for replacement in the event of a breakdown. It is particularly important that the manufacturer has direct access to the original spare parts (or is able to produce them) and that he is able to provide renewal options for obsolete systems such as 10

11 electromechanical controls in older machines. The spare part strategy should also include practical advice on the preventive purchase of critical spare parts to keep on site for emergency purposes. For less critical components, the supplier/manufacturer should be able to indicate availability on the market and delivery times. Access to general HVAC expertise It is essential that the manufacturer is also a specialized hatchery Heating, Ventilation and Air Conditioning (HVAC) expert. They should be able to carry out HVAC analyses of existing buildings and develop HVAC systems tailored to the needs of a hatchery. This is especially important as most general contractors are not familiar with the intricacies of hatchery equipment ventilation and building HVAC requirements Reducing risks related to the internal organization The internal organization of the hatchery profoundly impacts its productivity and results. Issues such as an ineffective organization of the production process or lack of motivation among personnel may often be at the root of poor performance, evidenced by deteriorating hatchability rates and/or poor chick quality. It is therefore important to develop a strategy to continuously improve the internal organization. Such a strategy can be based on the following: Creating a strong team It is extremely important for a hatchery manager to create around him a team of motivated professionals, including the individuals responsible for the different rooms, the data analysts and the maintenance team members. Within the team, an open dialogue must be maintained on production results and issues at the hatchery. Knowledge-sharing must be encouraged to maintain a high competency level, even in the event of a departure of key team members. Providing adequate training Adequate training is essential, both for the hatchery management team and for the operational staff. It is particularly important for team leaders to regularly follow renewal training sessions related to equipment operation and Standard Operation Procedures, especially when operating older machines. Additional cross-training can make operational staff understand the importance of adhering to the procedures. In many cases, external experts should be called in for this type of training to learn best practices and keep up-to-date with changing insights. It is also a good idea to offer team members the opportunity to attend seminars, which help them to exchange ideas with colleagues and build experience. Motivating team members Seminars and training sessions by external experts are also great motivators for the team members. In addition, personnel can be strongly motivated by providing good working conditions and by acknowledging the quality of their work. Automating activities It is a good idea to automate some of the more repetitive and inconvenient activities. Automation reduces labor costs as well as employee fatigue and increases productivity. Opportunities are found in the transfer room (setter rack unloading and loading, egg transfer), the take-off room (chick/shell separators, tray unstacking and restacking), the chick room (chick counters, chick box stacking and palletizing), the washing room (hatcher trays and racks, chick boxes and dollies) and the waste disposal area Reducing risks related to the supply chain Personnel can be strongly motivated by providing good working conditions and by acknowledging the quality of their work While reliable equipment and a solid internal organization at the hatchery are of crucial importance, we must not underestimate the importance of upstream quality. The operations in the breeder farm have a profound impact on the quality of 11

12 subsequent production stages. It is a fact that the first day of incubation actually occurs inside the hens and everything that happens in the hours and days following egg-laying is of crucial importance for the embryo s health and for the chances of developing a quality chick and healthy bird. Therefore, the following activities at the breeder farm require special attention: Egg collection Eggs must be collected several times a day to minimize the pre-incubation stage and damage to the eggs. Egg storage Egg storage at the breeder farm must be limited in time (at most five days) and must occur at conditions that prevent embryos from developing or suffering. For example, the egg storage room should maintain a temperature between 65 and 68 F (18 to 20 C) and a relative humidity between 75 and 80% vii. Egg grading and sanitation It is essential that only clean fertile eggs be delivered to the hatchery to avoid reduced hatchability due to bacterial infection. Cracked, grossly soiled and scraped eggs as well as eggs with thin or wrinkled shells must be rejected for delivery. Even slightly soiled eggs have a significantly larger risk of early mortality and increase the biosecurity risk to the entire hatchery. Likewise, even micro-cracks lead to lower hatchability and must be avoided. Misshaped eggs should be discarded too, as they indicate a diseased, overcrowded or stressed flock producing eggs that will not hatch well. Preparation for transportation The eggs must be packaged in such a way that they can be safely transported to the hatchery. The ideal way is to put eggs into egg trays provided by the hatchery; a method that can be used wherever breeder farms are close to the hatchery, as is often the case in North America. For long distances, special self-stacking tray systems viii are available to better protect eggs and reduce transport costs. Of course, good hatchability requires that the selected eggs be put large end up into the incubator trays. This clearly shows that the internal organization of the breeder farm is very important for the success of the subsequent incubation and hatching process. Hatchery managers, however, usually have a limited view on what happens at the breeder farm. Their responsibility starts with picking up the eggs at the farm or reception at the hatchery. At that time, possible deficiencies in the collection and storage process cannot be identified and even issues with cleanliness, the presence of micro-cracks or the incorrect placement into the flats cannot be detected, as the flats are stacked into large racks or cases. While some of the problems may become apparent upon arrival at the hatchery when the flats are loaded into the incubator, others will inevitably remain unnoticed. Additional uncertainties may arise when dealing with egg suppliers from another continent who send their eggs over long distance by plane. How long have the eggs been stored intermediately? Have they suffered from excessive heat or cold during transfers? How were they handled? These uncertainties about the quality of the breeder farm delivery should encourage hatchery managers to take extra measures. These may include the following: Monitoring quality The quality of deliveries should be continuously monitored along with the subsequent hatching results. Good record keeping is essential to be able to trace the reliability of egg suppliers and to enable early identification of possible quality issues at breeder farms. Information exchange on a routine basis Information exchange meetings or phone calls should be organized with breeder farm managers on a regular monthly basis to discuss hatching results, observed issues and breeder farm practices. It is very important to maintain a good relationship with the breeder farm management. The more you develop a personal relationship with breeder farm managers, the more you know what to expect from them. Open dialogue on breakout results Residue breakout analyses carried out at the hatchery enable identification of the time of embryo mortality occurrences, whereby early mortality (within the first week of incubation) may indicate a breeder related problem. It is important to always discuss these results with the breeder farm management, which confirms the importance of maintaining a good 12

13 relationship. An open dialogue on issues must be maintained to allow quick implementation of corrective actions. Calling in external advice In some cases, the causes of embryo mortality cannot be easily identified. This may be a reason for calling in external advice, for example from the equipment manufacturer. Equipment manufacturers have a lot of experience with other customers and Equipment manufacturers can provide useful insights to identify the root cause of a problem therefore can provide useful additional insights to identify the root cause of a problem. In addition, valuable insights can be obtained from community blogs such as LinkedIn. In general we can conclude that supply chain quality assurance for hatcheries comes down to maintaining a good relationship with the breeder farm management and encouraging regular and open communication on practices, results and observed issues. Additional external expert advice may help in solving the more tricky problems Monitoring the output quality In addition to maintaining a good relationship with the breeder farm, it is important for the hatchery manager to keep in touch with their direct customers, the chicken farms. The following aspects are important: Quality comes first Hatchery managers should emphasize their commitment to providing high-quality chicks. Quality must be monitored by checking the actual feel of the chicks, observing the shank hydration, and monitoring the chick yield, among other factors. The results should be communicated to the chicken farm. Open dialogue on issues Chicken farms will monitor livability of the delivered flock. Sometimes they will express doubts about the quality of the hatch, for example in the event of a significant 7-day mortality rate. These issues must be discussed in an open manner as root causes must be identified as quickly as possible. In some cases external advice, for example from the hatchery equipment manufacturer, can be called in. Valuable insights can also be obtained from community blogs. Try worryfreehatchery.com for a forum on hatchery practices. 13

14 6. Conclusion It is of vital importance for any hatchery business to effectively reduce the stress level related to operating the plant. In this whitepaper we have outlined the most important sources of worry for hatchery managers and provided a framework for effectively addressing them. Risks should be reduced in four areas: The equipment Ensuring a high level of equipment related knowledge, securing access to specific technical expertise, and developing a comprehensive maintenance and spare part strategy. The internal organization Creating a strong and motivated team, involving adequate training and sensitizing. Automation may help to improve efficiency and effectiveness. The supply chain Monitoring the quality of the supply chain and discussing results with breeder farms. External advice can be called in to solve the more difficult issues. The output quality Monitoring the hatchery output and discussing results with the chicken farm. In all of these domains, it is essential to develop and maintain an open dialogue with all of the involved parties, including the breeder farm management, the equipment supplier/manufacturer, and the chicken farm. i For a short history of chicken production in the US see ii iii Examples of such studies can be found at and iv Participants included hatchery managers from the US, Canada and Saudi Arabia. v Jamesway, Why single-stage poultry incubation will gradually take the upper hand, vi Examples include the use of ionophores. These antibiotics are used for poultry health but are not related to human health. vii Figures from the Jamesway Hatchery Design Manual. viii For example the Jamesway Self Stacking Tray transport system: 14