January | February 2010

Feature title: The multi-formulation - A key tool for the raw materials purchasing

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The International magazine for the aquaculture feed industry

 F: Raw materials
The multi-formulation:
A key tool for the raw materials purchasing
by Bruno Duranthon, CEO, A-Systems, software editor of Allix² feed formulation software and KAllix quality control software., bduranthon@a-systems.fr
W
hy formulating? It single optimisation which can’t help you
is obvious that if with the commodities purchase.
commodities’ prices Another possibility consists in stating
and qualities remain the raw materials consumptions once opti-
stable and the animal nutritional mized every single formula one by one.
needs never change, working with fix From the consumptions, the purchaser can
formulas could be sufficient. deduce the quantities to purchase ‘at any
cost’. This method is not responsive at all
In this case, supplying the feed producers and can’t allow you to make any simulations.
with commodities would be easy as pie. In addition, the presence of formulas
Unfortunately it is not the case! Indeed, one produced in very low quantities or fixed
formulas (formulas
which never change)
complicates the
problem. Indeed
"The fact remains that the multi- you need to take
into consideration
formulation, in spite of the high cost the raw material
relating to the program acquisition consumption coming
from these formulas.
is a crucial tool for feed producers As a consequence
your program
who will get a quick return on should take them
investment" into consideration if
you want to have a
comprehensive view
of the raw material
to purchase.
of the main uses of a formulation tool is to The first question to ask to oneself is
help the raw material purchasers to take about the validity of the production fore-
good decisions. casts; for integrated production it could be
The key tool to optimise purchases is easy to estimate, however for commercial
the multi-formulation program. The idea feed producers it will be a little bit more
consists in optimising all the formulas tak- difficult to predict: in this case it could be
ing into consideration their production useful to study the stability of the results
tonnages. taking into consideration the variations of
This method is miles away from the the stock forecasts.
20 | InternatIonal AquAFeed | January-February 2011
The second question to solve before
launching the calculation regards the raw
materials selection: a producer is always in
the situation in which some raw materials
are already bought and he has to top up its
purchases or take decisions on raw materi-
als bought in excess –bring forward, force
the incorporation, resell-.
“I optimise the quantities bought using
the cost price and the quantities to buy
using the market price”. This though often
heard seems to be coherent. However you
will find below our thought about it.
You shouldn’t mix
up two things
Purchases already done, depicting an
expense done, fixed and for which there is
nothing more to optimise: mathematically
said it is a constant.
Remaining purchases: these are the
adjusting variable which can be least cost
optimised. Indeed, remaining purchases will
be optimised using the market price.
Therefore, the calculation of the cost
price will be done taking into consideration
the purchases already done.
What is the consequence on the pur-
chase of this optimisation using the market
price? Taking into consideration the case
that we purchased a raw material at a
“good price”, meaning that the price of this
raw material increased since we placed the
order. The following chart shows that with
the optimisation using the market price, the
quantity bought at a “good price” being less
used, the raw material cost price and as a
F: Raw Materials
Product manag- during three month (or more) on demand
ers can then review of the purchase?
and adjust the The fact remains that the multi-
formulas taking into formulation, in spite of the high cost
consideration the relating to the program acquisition is a
availabilities. crucial tool for feed producers who will
Another issue get a quick return on investment. Indeed
concerns the com- we consider that using this tool can
bination of the raw represent a gain from 0.5 percent to one
material to use in percent of the raw material cost which is
the plant: in case significant. However the most important
consequence our selling price increased that the place is limited in the plant and it thing remains the quality of the advice and
slower than if we would have optimised is not possible to use all the raw materi- the follow up provided by your editing
with the cost price, which would have made als retained in the multi-formulation, as a software company.
an over-consumption of this raw material. consequence a bin optimisation allows to Solutions to all the problems mentioned
Once solved this question, the multi-for- calculating the best combination of the raw in the article can be solved using the Allix²
mulation will provide you with information material to use. Multi-blend solutions. For more informa-
on the raw materials consumptions: then it tion, please feel free to contact us.
will be possible to set some constraints on The multi-plant framework
one or several raw material consumptions. The optimisation issue is more difficult More inforMation:
However the program used will always when it is required to optimise the raw A-Systems
inform you on the cost coming from all the material purchase for various plants. Indeed 41 rue des Chantiers
78000 Versailles
modifications: indeed a solution without local constraints linked to one or several
France
stock constraints would be ideal because production units can be added on top of
Tel: +33 1 39072675
less costly. the multi-plant constraints. In this case the Fax: +33 1 39072677
At first the multi formulation can be multiblend on multi-plant must take into Email: contact@a-systems.fr
used to make some simulations, in order to consideration the raw material allocation Website: www.a-systems.fr
test hypothesis and help purchasers to take on the entire
right decisions.To do so, a multi-formulation production
parametric allowing to quickly simulating units.
one or several variations is mandatory. An issue
From our point of view, the following simu- even more
lation should be quickly done: complicated
• Consequences on the variation of a regards the
raw material quality (what happen if optimisation of
the Soya 48 has of protein level of the raw materi-
only 46.5 percent?) als on several
• Consequences linked to the purchase period of time.
of an additional 25.5 tons of a specific The goal is to
raw material optimise a raw
• Consequences linked to the variation material flow
of a price of one or several raw but only a few
materials. companies
• Study of the interest of a new raw working with
material (at what price will it be inter- important vol-
esting to buy and in which quantities?) umes can justify
• Study of the reselling of one or several an investment
raw materials in such a deci-
Then the multi-formulation has an sion help tool.
operational role, when it allows optimally However, in
allocating the available raw materials, in case this configura-
of shortage. In this more operational situa- tion problems
tion it is required to modify formulas one to solve are
by one in the case of a multi-formulation. really pertinent.
The working method could be the following: How allocating
a raw material
Multi-formulation of the contract with-
production, without any out fixed dates:
supply constraints for example x
Then set the available quantities tons to allocate
January-February 2011 | InternatIonal AquAFeed | 21
 F: Bangladesh

Delivering
Moreover, they stated that the area
under feed-based aquaculture is increasing
BBS, 2004, Statistical
Yearbook of Bangladesh,

Buckets full
Bangladesh Bureau of
h day by day. The sustainability of feed based Statistics, Ministry of
g aquaculture is assessed in Table 2 with Planning, Government of
respect to 75%, 85% and 95% of total pond the Peoples’ Republic of

of experience
0 and ditch area of the country. Bangladesh, Dhaka.
/ Rising feed
DoF, 2010. Fisheries cost
e Conclusions and Statistical Yearbook of
- Policy Implication Bangladesh (2009-2010),
o On the basis of the above require-
The world’s largest range ofDirectorate elevator of Fisheries,

g
l ments and availability estimates, except
buckets
rice polish, all the local feed items required
Dhaka, Bangladesh.
Escalating Tired of hearing
fish meal price
only bad news?
DOF. 2006. Fishery
- imports to run culture fisheries in the
Statistical Yearbook
e country.
of Bangladesh 2004-
s As culture fisheries capture more and 2005. Fisheries
- more areas under its operation, it is going Resources Survey Opportunistic Feed is the main cost
to become an import-dependent practice
if the feed situation prevails without any
System, Depar tment of FOR FISHMEAL REPLACEMENT diseases
in most aquaculture

One ShOt At
Fisheries (DOF), Dhaka,
measures to address it. Bangladesh
operations …
As culture fisheries are an important
Hossain, M.A., Ahmed,
source of income and employment, they M. and Islam, M.N., Environmental
have a significant livelihood impact on the 1997, Mixed Culture impact
economy of Bangladesh.
Bangladesh Bureau of Statistics (BBS),
Department of Fisheries (DoF) and other
of Fishes in Seasonal
Ponds through
Fer tilization and
AquAfeed PerfectiOn and the most difficult one
to reduce when ingredient
concerning organisations should record Feeding, Bangladesh Low Shrimp prices are rising …
feed and other fisheries related data Journal of Fisheries In the competitive aquafeed industry, you & fish prices
regularly. Resources, 1(2):9-18. only get one shot to put the perfect product in
The government and NGOs should Islam, M.S. and Dewan, the bag. That’s why so many leading aquafeed
come forward to establish local feedmills S., 1986, Resource Use manufacturers in the industry count on Extru-Tech to
to cater to the feed requirement of and Economic Return
in Pond Fish Culture.
engineer the perfect aquafeed production solution.
the growing and promising fish culture
industry. Bangladesh Journal of AQUAGEST® maximizes digestibility
Is your aquafeed production system on target?
Agricultural Economics,
Intensive research programs should be
Could you use a cost effective improvement and feed utilization
l Large range and inventory 9(2), 141-150.
undertaken immediately by both GOs and
of many sizes
NGOs for quality innovation. Farmers/users Islam, M.S., 1987, An in performance and finished product quality? efficiency
Higher
shouldl be capacity
trained so thatfor existing
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elevators
feed and other inputs more efficiently. Pond Fish Production at Extru-Tech today at 785-284-2153.
AQUABITE® enhances palatability
l Durable, long life designs
Capital should be supplied to the farm-
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Bangladesh, Research
ers whol Free elevator
suffer from design
a lack service
of sufficient
Repor t No. 11, Bureau
capital to use/purchase feeds from the of Socioeconomic
SANACORE® GM
market in a timely fashion. Research and improves growth and
A monitoring system Watchdogshould be devel- Elite Training, Bangladesh
oped to check the adulteration Completeof Hazard Monitoring
fish feed System for Bucket
Agricultural University,
productivity by promoting
Elevators and Conveyors!
in the country. A subsidy/duty reduction Mymensingh-2202,
l Bearing Temperature, Belt Misalignment,
®
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Belt Slippage, Blockage Detection
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l Fully programmable elevator
Muir, J.F. 2003. operation
The Corporate Office
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FRANCE / 00 33 2 97 40 42 09
culture can be sustained lwith LED lower
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Future for Fisheries:
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References Review and Future Fax: 785-284-3143
Cold Forged for Highest Quality! applying nature for a healthy and sustainable future
l Euro Bolts (DIN15237), Original Development Study, extru-techinc@extru-techinc.com Functional Hydrolysates for Aqua Feed
ADB. 2005. An Fang
Ref 70, Evaluation of Small-scale
Bolts & Easifit Bolts Commissioned with www.extru-techinc.com
Freshwater Ruralin Aquaculture
l Available steel / stainlessDevelopment
/ zinc the association of the
plated
for Pover ty Reduction. Operation Evaluation World Bank, DANIDA,
Wide range
Deparltment, Asianavailable from stock
Development Bank (ADB), USAID, FAO, DFID with
Manila, Philippines. the cooperation of the Contact us at : +33 2 97 93 89 36
BBS, 2000, Statistical Yearbook of Bangladesh, Bangladesh Ministry of contact@aquativ-diana.com info.aqua@nutriad.net
Bangladesh Bureau of Statistics, Ministry of Fisheries and Livestock
www.go4b.com www.aquativ-diana.com www.nutriad.net
Planning, Government of the Peoples’ Republic and the Depar tment of
Email: 4b-uk@go4b.com
Fisheries, Dhaka
of Bangladesh, Dhaka.

nternatIonal AquAFeed | 7 26 | InternatIonal AquAFeed | January-February 2011 January-February 2011 | InternatIonal AquAFeed | 27
January-February 2011 | InternatIonal AquAFeed
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