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.