Costs over the Lifetime of a Feed Mill

Investing in a new feed mill or upgrading an existing one may ask for a substantial investment.  It is therefore understandable that feed mill owners and operators take care minimising investment cost.  However, Costs over the Lifetime of a Feed Mill should be the total concern, and not the cost of the initial investment only.

Engineering & design : is it worth it?

Few feed mills find it cost effective employing full-time staff of Mechanical, Electrical and Structural Engineers looking after their need for plant expansion or building a new feed mill.  It is therefore not uncommon outsourcing these services when time comes to expand or build a new feed mill.

Naturally it seems difficult for new or existing feed millers to accept that allocating part of theirCosts over the Lifetime of a Feed Mill investment to the initial engineering & design of their new feed plant or existing feed plant expansion, is worth it. Engineering & design services could be classified as an intangible product.   However, the effect of engineering & design results in a very tangible outcome.  An outcome that may result in acceptable operational costs after installation, or an outcome where excessive operational & maintenance costs constraints the main purpose of the feed mill.

Costs factors

The chart “Costs over the Lifetime of a Feed Mill” was produced by the American Feed Industry Association and applies in many countries around the world.  Engineering & design contribute for only around 1% of the investment over a feed mill’s lifetime.  Even Equipment & Installation cost of the processing equipment and plant totals around 15% of the total cost over the lifetime of the feed mill.  Operational and Maintenance cost on the other hand, could be as high as 50% or more, depending on Engineering, Design and Equipment quality.

A direct relationship exists between operational & maintenance cost and the initial engineering & design (and associated costs) of the new feed mill or feed mill expansion.  We may appear to save money by investing in low cost equipment or a poorly designed feed plant, but sadly the savings turn into costs when unnecessary maintenance and operational costs start occupying daily feed mill life.

Proper Engineering & design

Engineering & design affects a feed processing plant in at least the following ways:

  1. Functionality : the plant must be and should be designed to fulfil a very specific function – meeting and exceeding the expectations of the feed mill’s customers in terms of physical and nutritional product quality.  Failure to create a design that meets functional requirements may make it useless.  Even if the cost of such a design is low.  And let’s face it, even a relatively “cheap” design could turn out to be “expensive” if it fails to do the job!
  2. Downtime : Inferior plant design and inferior equipment may result in unnecessary operational constraints, failures and downtime.  It negatively effects operational and maintenance cost and has the potential to disappoint feed mill customers and even drive them to competition.
  3. Cost : The above chart confirms that initial investment cost is only one cost factor, and that ongoing operational and maintenance costs not only exceed the initial investment cost but continues into the future.

An industry colleague used the expression : “The bitterness of poor quality (includes Engineering & Design of Plant & Equipment) remains long after the sweetness of low price is forgotten”.  Investing into a new feed mill or a feed mill upgrade is a fine balance between saving on the one end but investing on the right end.

We can help you making sure you get this balance just right – Contact us today!