Better Information, Lower Costs and a More Manageable Flock
Managing a flock of 650 sheep spread across different fields creates a costly problem when communicable disease is discovered. The farmer needs to identify which animals have entered an affected area or come into contact with an infected sheep. Without reliable movement records, treatment may have to extend across a much larger part of the flock.
At the time, individual inoculations could cost between £8 and £51, while veterinary consultations and laboratory work could add hundreds of pounds to each incident. Knowing which animals faced a high, low or negligible risk of exposure allowed treatment decisions to be made more precisely, potentially reducing annual flock-management costs by thousands of pounds.
Connected collars gave farmers location and movement information for individual sheep. The same data could reveal behavioural changes associated with approaching lambing, helping farmers identify ewes that might require attention.
Location tracking also offered protection against theft. Sheep are generally moved in groups, and the reinforced collars were difficult to remove quickly. A farmer who acted promptly could trace stolen animals to their destination and arrive with an electronic record of their movement.
For the farmer, the value was immediate and practical: lower operating costs, more focused treatment, earlier opportunities to intervene and much better visibility of the flock.
Making the Economics Work at Low Volume
The farmer’s potential saving created the commercial opportunity, and also set the boundaries of the business model. The combined cost of the collars and continuing tracking service needed to leave the farmer with a substantial financial benefit. The greater the saving after paying for the service, the more compelling the decision to adopt it became.
Within that price, the livestock technology company needed to source components, manufacture and provision each collar, acquire customers, deliver the devices, collect payment and provide continuing support.
Higher volumes would eventually improve those economics. GPS receivers and other components became significantly cheaper when purchased in quantity, while larger production runs reduced the manufacturing cost of each collar. During the early stages, however, demand had to be developed one farmer at a time, and order volumes offered fewer economies of scale.
The company therefore needed to operate efficiently while the product was still gaining traction. Controlling procurement, manufacturing and administrative costs created enough margin to make each sale attractive to the company while preserving enough of the benefit to make the service attractive to the farmer.
Delivering that value required an equally practical business behind the collars.
The Operating Foundation Behind Each Collar
Each collar began as components sourced from several suppliers. These had to be purchased, received, assembled, tested and recorded as a finished device. The collar then had to be linked to a customer, assigned to an animal and provisioned on the livestock-tracking platform.
A sale created a continuing relationship. The device had to be shipped, the hardware and service billed correctly, payments collected and the customer supported. Its condition, battery status, maintenance requirements and eventual replacement also had to be managed throughout its working life.
Odoo provided the shared operating environment connecting procurement, manufacturing, inventory, sales, billing, customer relationships, support and financial reporting around the same products, devices and customers.
The website gave the company a professional presence and served as a customer portal. It supported registration, access to information and elements of self-provisioning, while ecommerce augmented direct sales by allowing existing customers to order products and services online.
Self-provisioning was important to the economics of the business. New customers and devices could be added without expanding the staff contingent at the same rate. Revenue could grow while support overhead and the financial risk associated with expansion remained controlled.
Defined workflows gave staff consistent processes for onboarding, fulfilment, support and maintenance. Shared information and collaboration capabilities also allowed people in Port Talbot and South Africa to work together across locations and time zones while farmers experienced one coordinated organisation.
The company gained the operating capabilities and professional presence of an established business while its product was still gaining traction.
Coordinating the Physical Service Around the Farmer
Collar maintenance had to fit within the farmer’s working calendar. Sheep were already gathered and handled during shearing, creating a practical opportunity to replace any collar, particularly those whose remaining battery life would not carry it through to the next shearing cycle.
In practical terms, the exchange had to be completed in approximately the time it took to shear a sheep. Fully charged collars were prepared in advance and swapped while each animal was being shorn. The shearer recorded the outgoing and replacement collar numbers, allowing the new device to remain associated with the sheep and preserving the continuity of its tracking history.
Used collars could then be returned, charged and prepared for future deployment. This kept the work quick for the farmer and avoided the time and expense of gathering sheep separately for device maintenance.
Behind that apparently simple exchange was a carefully coordinated process. SiteWhere held information about individual devices and their remaining battery life. Odoo supported the customer records, inventory, project planning and maintenance activity needed to act on that information. The company had to identify the right collars, plan the work around seasonal shearing, prepare replacements and maintain accurate records as devices moved between animals and locations.
It also had to carry a pool of fully charged replacement collars. This contingency stock protected the farmer from additional handling costs, while the supplier funded and managed the inventory required to provide that convenience. Too little replacement stock could interrupt the service; too much would tie up cash and weaken the economics of the product.
The farmer experienced a quick collar exchange. The integrated systems allowed the livestock technology company to manage the operational complexity and preserve the value of the service for both parties.
Credibility, Efficiency and Room to Grow
The integrated operating foundation gave the company more than efficient internal processes. It presented farmers, suppliers and funding organisations with a credible business capable of delivering and supporting a technically sophisticated service.
Customers encountered a professional website, clearly defined products, organised onboarding, accurate billing and repeatable support processes. Internally, the company could see its purchasing commitments, manufacturing costs, sales activity, customer relationships and financial position in one connected environment.
This visibility also strengthened its position when seeking funding. The proposition was supported by defined products, working operational processes and clear financial reporting. Funders could see both the commercial opportunity and evidence that the company had established the controls needed to manage investment responsibly. This helped the company secure government-backed support in Wales and obtain additional financing.
As demand increased, established processes could be repeated and refined. Self-provisioning reduced the staff required for each additional customer, while purchasing and production planning created opportunities to improve component pricing and manufacturing costs at higher volumes.
The company had built the infrastructure needed to grow revenue faster than its administrative overhead, allowing profitability to be protected through the early stages and improved as the product approached scale.
What Could This Make Possible in Your Business?
Manufacturers, distributors and retailers face the same underlying challenge: delivering value to customers while controlling the cost and complexity behind every sale.
An integrated business system can connect expected demand with procurement and production, give sales teams accurate product and availability information, coordinate fulfilment across locations, and maintain the customer relationship through billing, support and after-sales service.
It can also make new commercial models practical. A physical product can be combined with maintenance, subscriptions or continuing digital services. Customers can place orders, access documents and request support online. Individual products can be traced from their components and manufacture through delivery, maintenance and replacement. Teams in different locations can work from the same operational and customer information and collaborate or communicate.
The opportunity is different in every business. It may be reducing the cost of launching a new product, adding services to an existing range, giving customers better access to the company or allowing revenue to grow without administrative costs increasing at the same rate.
At Hatton Locks, we build integrated business systems around how a company creates value, serves its customers and makes money. By connecting procurement, operations, sales, fulfilment, finance and customer service, we help businesses create capabilities that are efficient from the beginning and ready to grow.