February 26, 2024


It's the Technology

A Q&A With Rembrandt’s CFO


With Earth Day occurring this month, it’s a good time to explore ways in which CFOs are helping to drive sustainability, especially in the sector most important to human survival: food production. I recently spoke with Greg Hoggard, CFO and VP of Finance and IT at Rembrandt Foods, a leading egg producer. Greg and I discussed how Rembrandt embeds sustainability into its entire business process, but we also touched on another important topic: the role of IT and data in measuring, managing and gaining insight into the workings of an organization. The themes of sustainability and technology are only going to become more important to CFOs and the finance and accounting profession more broadly – and Rembrandt’s business model is an instructive case of how to embrace both.

Jeff Thomson: Rembrandt Foods boasts one of the world’s largest in-line egg producing and processing facilities. A core operating principle of your business is sustainable agriculture and local sourcing. As head of finance how does sustainability impact your decision making? Can you elaborate on your organization’s “Live Responsibly” initiative?

Greg Hoggard: The Rembrandt site is amazing to behold. It is hard to describe the scale and magnitude of the site to one who has not seen it. There are six million hens at the site. It takes a lot of real estate to take care of that many birds. Every day our employees walk the equivalent of twenty football fields taking care of our flocks. We have enough birds to feed each citizen of our home state of Iowa two eggs per day. The state of Iowa alone produces enough eggs to feed 20% of the nation’s population at least one egg per day.

Eggs are a very sustainable source of protein. Our hens are fed a strict diet of locally grown corn and soybeans. Corn and soybeans are milled on site into feed that is distributed daily to the birds. We are very cognizant of the needs of every individual bird. We have veterinarians and dieticians regulating the types of feed and quantities that every bird needs to be as happy as possible. We also have an onsite water treatment plant that cleans and recycles water for both animal and human consumption.

Like all good businesses we try and minimize waste, achieve first-pass quality and minimize rework. Throughout the process there are various stations to collect egg that doesn’t make it through our standard process. This egg is then processed and sold into the pet food market providing clean protein for all of those fur babies out there.

We sell liquid egg and dried egg products. As such we must break and separate every single egg produced at our facility. Rembrandt’s birds produce enough egg to fill an Olympic swimming pool every week. There are a lot of shells discarded through the breaking process. Shells are processed to extract any remaining egg whites. These are also sold into the pet food market. Shells are dried and processed into calcium which is used as an additive in the chicken feed. Calcium supports strong shell structures. A strong shell is vital to transport the egg from the barns through the breaker.

The largest by-product of the egg industry is the chicken manure. There [are] a lot of exciting things happening in the world of organic fertilizers. Chicken manure is one of the purest organic sources of nitrogen. We are working on ways to process the manure to ship products nationwide. Until then, we continue to sell the manure back to our farmers who grow corn and soybeans for our flocks.

Sustainability equals minimizing waste in every aspect of every process. Sustainability means minimizing our footprint, practicing “leave no trace” principles. It is our responsibility to do business in a way that provides the brightest possible future to the next generation. Our mission is to feed the world the most economical and sustainable source of protein. Everything we do supports this mission. If we aren’t living responsibly, taking care of the limited resources that this planet has to offer, then we are not aligned with our mission.

Thomson: You’re head of both the finance function and IT at Rembrandt. Do you see these two roles as complementary? Have your dual accountabilities helped to streamline decision making around technology investment?

Hoggard: Information technology and finance/accounting are very complementary. One often hears that a finance/accounting department is only as good as the data provided. The same is true for good IT departments. IT provides systems and tools for both data collection and data consumption. Accounting is the number one consumer of IT data. It is very important for the IT team to provide means to collect and maintain data used to inform the business profitability.

There are many out there who still believe that enterprise systems exist solely for accounting. While it is true that enterprise systems were initially built to collect data for the general ledger and help provide an accurate accounting of business movements and transactions, the information age and internet of things [have] only magnified the need of good operational data. Think automation, robots, artificial intelligence; data that was once collected to support accurate, backwards-looking accounting can now be used to drive forward-looking operations. As data inputs improve so will business operations, whether through human-driven continuous improvement efforts or automated artificial intelligence.

Thomson: Data science and data analytics can be useful and affordable to any sized business, including small and medium sized ones. What advice would you give to a CFO of a small business who wants to integrate more data science and data analytics into their finance teams for enhanced insight and foresight? Do outside consultants have a role to play in initiatives of this nature?

Hoggard: As I mentioned before, good data yields good results whether through human interaction or robotic automation. Companies need data scientists to create and train models driven by artificial intelligence. Artificial intelligence needs to be trained and programmed. Most executives in small and mid-sized firms can’t afford these business unicorns known as data scientists. Data scientists are to business as Lebron James is to the NBA. Data scientists are the complete package. They understand business, accounting and finance, information technology, programming, automation, statistics, visualizations and so much more. Data science is the future of business.

Outside consultants are key for small and mid-sized companies to adopt new ideas and new technologies. Most people aren’t willing to jump into new technology with both feet. Consultants allow cautious business leaders exploration with timed deliverables with little commitment. It is important to find consultants who really know how to build. Consultants can augment your internal team’s skill set and inject new life and new ideas into a team subject to their own internal biases.

It is also important to note that most people are averse to numerical representations of results. Data visualizations and data visualization tools can be created and deployed to achieve critical support from key personnel to drive organizational change. People are our most important resources. Organizations will not be successful at adopting new technology without buy-in from our people.

This article has been edited and condensed.


Source link