Technology vs. Feasibility: An Economic Balancing Act
I’m sitting in a meeting to discuss high-level seed conditioning ideas with a major seed company, and the conversation zeros in on the amazing technology that’s available but not being fully used by seed processing equipment manufacturers, and hence their customers. I couldn’t help but be slightly offended. Look at all the amazing advancements that have come into adoption in a conditioning line: optical sorters of kernels and husked ears, gravity separators that are controlled by a touch screen, seed treatment equipment capable of transforming seed into Tic Tacs, and control systems capable of running the whole process from a central location, even remotely.
As I tried to keep an open mind and listen to the customer’s requests for advanced equipment, I realized that in having visited more than a dozen of their facilities, they hadn’t even begun to fully adopt what technology is already in the market, nonetheless what could be created.
So, where is the disconnect? Consider possibility vs. feasibility. Possibility has no constraint on time or money, and feasibility is a more realistic scenario. Or you can call it technical feasibility vs. economic feasibility. Yes, it is technically feasible to detect germination issues in seed with laser optics, but there’s no return on investment for this ability. At a capacity of 15 tons per hour, it would take 25 years to get a return on investment. That’s why the newest and coolest technologies don’t get adopted, and current practices remain acceptable.
Technical feasibility can be determined with good engineering and technical equipment resources. Meanwhile, economic feasibility adds complexity and needs input from many other sources, such as finance or operations. Other considerations in determining the economic feasibility of new equipment might be:
- ROI vs. Cost. Does your company consider all of the budgetary impacts of implementing technology? Are budgets adjusted for cost-cutting factors due to the implementation of new technology? Or are upfront costs on the capital budget the only factor, without considering the long-term view? Is consideration given to company viability and how to remain relevant to your customer?
- Adoption. If it is technically possible, how soon is too soon to implement new technology? Does the new technology have longevity? Is it serviceable? For early adopters, there’s never the comfort of seeing the new technology in multiple installations. Instead, the reward is in getting ahead of the competitor. To be an early adopter, consider the source of the technology. Is the company credible? Is there long-term accountability? In other words, does the company introducing the equipment want to continue to do business in the industry?
- Staffing. There are many great examples where technology has been implemented to address the loss of experienced operators working in your facilities. But do you now need to hire a new skill set? Technology doesn’t typically replace the need for skills; it just changes what skills are necessary.
The seed industry is not the pharmaceutical industry, at least not yet. The end product created has some rational, finite price limit. The threshold is set by a customer buying a bag of seed — that’s true economics driven by an array of choices. To operate in that market, we all have to continue to consider possibility vs. feasibility.