Optimizing the Total Value of Operations in Dairy

In today’s highly competitive dairy marketplace, owners and operators of dairy production facilities are focused on meeting or exceeding key performance metrics, such as improving yields, minimizing waste and saving water and energy, in order to maximize the efficiency and profitability of their operations. Typically, these metrics are tracked by unit operation, with the focus almost exclusively on reducing cost of operation as a proxy for maximizing performance. Examining all of the cost components that go into production provides owners and operators an opportunity to understand their Total Cost of Ownership (TCO), which is a logical way to improve a plant’s profitability.

Holistic approach can bolster earnings

Recently, however, a growing number of dairy producers have been working with Solecta to more holistically assess their operations. They are finding that this holistic approach is a difference maker in terms of bottom-line profitability.

In these engagements, Solecta uses an approach it calls Total Value of Operation (TVO), which it developed as an adaptation of TCO. While TCO focuses on an asset’s cost components, Solecta’s TVO process, while not dismissive of cost, expands the view. It assesses the total operation rather than just a unit process, searching for ways to optimize asset utilization to drive revenue growth. Said another way, TVO answers the question, “How can an asset be most effectively used to maximize financial return?”

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