Title: A Reflective Report of Aviagen’s Risk

and Resilience Management

Student ID: 22418174

Student Name: Fausat Adebola Abudu
Module Title: Risk & Resilience in Holistic Value Chain
Management
Module Code: BSOM072
Module Leader: Dr. Mehran Sepehri
Date: 11/9/2022
Word Count: Section A- 1473, Section B- 1284
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Executive Summary

This is a reflective report analyzing the supply chain of a company in the poultry industry of the
United Kingdom. The report analyses the positive points in the value chain management and
risk and resilience practices of the company and provides evidence-backed recommendations
based on the lessons learned from the company’s strategies and successes.
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Table of Contents

Executive Summary...................................................................................................................... i

Introduction.................................................................................................................................. 1

The Company- Aviagen...............................................................................................................1

An analysis of Aviagen’s Value chain in relation to Risk and Resilience......................................1

Biosecurity............................................................................................................................... 2

Compartmentalisation.............................................................................................................. 3

Innovative and Modernised Facilities.......................................................................................4

Alternative Routes for Delivery.................................................................................................5

Open Communication and Transparency.................................................................................6

Extensive Global Supply Network............................................................................................7

Evidence-Backed Recommendations for managing and improving risk and resilience in similar

organisations............................................................................................................................... 8

Conclusion................................................................................................................................. 14

References................................................................................................................................ 15

List of Figures

Figure 1: Biosecurity with Aviagen. (Aviagen Group, 2022b).......................................................2

Figure 2: Chain of infection in the biosecurity of poultry. (Alvaro, 2021)......................................3

Figure 3: Aviagen Hatching Trucks (Global Ag Media, 2007)......................................................4

Figure 4: Global Export Team (Aviagen Group, 2022b)...............................................................5

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Figure 5: Open communication and transparency. (Aviagen Group, 2022b)................................6

Figure 6: Extensive global supply network (Aviagen Group, 2022b)............................................7

Figure 7: Biosecurity implementation in Poultry. (Singh, 2021)....................................................9

Figure 8: Biosecurity in Poultry Farming (Oyugi, 2022)..............................................................10

Figure 9: Compartmentalized Signaling in Aging and Neurodegeneration, (Benedetto et al.,

2021, p. 3................................................................................................................................... 11

Figure 10: Chicks (Aviagen Group, 2022a)................................................................................11

Figure 11: Compartmentalisation in poultry. (Soisontes, 2015. p. 10)........................................12

Figure 12. Chicken Equipments Used in Poultry Farming Industries (Livi Equipment

Supplier,n.d).............................................................................................................................. 13
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Introduction

Every industry is plagued with its share of risks and the poultry industry is not left out. These
risks can have a significant impact on the supply and value chain of the industry and this makes
resilience a very vital factor to every business. While risk factors increase the susceptibility of a
business and its value chain to stress, resilience factors protect the business from the negative
impacts of the stress caused by the risks (Diehl et al., 2012). Resilience is the ability to build the
capacity to avoid damage and negative impacts as well as recover swiftly in the face of negative
effects caused by risk factors. In all, it is the ability to thrive in the face of unexpected events
and circumstances (Marks, 2021). This reflective report is an analysis of the value chain of a
company in the poultry industry and how it manages risks and builds resilience. The report also
contains evidence-backed recommendations for future management of risks and building
resilience capacity.

The Company- Aviagen

Aviagen is a globally preferred poultry production company with numerous outlets all over the
world. The company has overcome several risks and built its resilience over the years. This
reflective report explores the major risks that the company has faced during its operations, its
resilience and how it affects the company’s value chain. Aviagen’s competitive advantage within
its industry is evident as in spite of the big blow the coronavirus pandemic dealt to businesses in
2020, the company recorded a turnover of £167million with an operating profit of £59million
(Ryan, 2021).

An analysis of Aviagen’s Value chain in relation to Risk and Resilience

Aviagen understands the impact that risks to its supply chain can have on its value chain and
has taken sufficient precaution to build resilience in order to accommodate and mitigate the
impact that these risks can have on the company and its value chain. Starting with supply chain
strategies that ensure that regardless of the threats of trade restrictions and other challenges,
customers, irrespective of their location across the globe, can be certain of the availability of
high grade, best-in-class broiler breeding chicks, the company is committed to ensuring
sustainability to all its producers and their customers (Aviagen Group, 2022b). Looking at news
and reports from the company, some of the positive points and learning areas noted from the
risk and resilience in Aviagen’s value chain can be summarised below.
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Biosecurity

Figure 1: Biosecurity with Aviagen. (Aviagen Group, 2022b)

One lesson learned from Aviagen is how it engages the use of bio-security system in its supply
chain management. As a method to tackle more than one risk in the poultry production
business, the company performs well-organised, systematic and structured bio-security and
welfare surveys. Bio-security has to do with the basic and sometimes technical routine put in
place to restrict certain actions that could cause harm to the poultry animals which includes
introduction of pathogens that could cause and spread diseases. The actions taken by Aviagen
in accepting and applying bio-security, regardless of its continuous expansion were veterinary
proven. Aviagen kept building their production structure in areas that were less populated and
atmospherically sterilized, it focused on the structural and physical layout of its production and
farm perimeters, and most importantly it had a system that worked effectively in cases of
contamination reduction and disease control (Torremorell, 2021).
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Figure 2: Chain of infection in the biosecurity of poultry. (Alvaro, 2021).

Compartmentalisation

Asides putting in place a functioning bio-security system, Aviagen practices

compartmentalisation. Considering some of the most congruous and rising diseases threats in
poultry production such as Avian Influenza (AI) and Virulent Newcastle Disease, it is vital that
every stage of production down the line to supply of products should be done using
compartmentalisation. According to the OIE Animal Health terrestrial code,
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“Compartmentalisation applies to an animal subpopulation defined primarily by management

and husbandry practices related to bio-security”. This process is put in place to aid export from
countries where a certain disease relatable to the products to be exported is found. It also
helped in managing the poultry produce that are to be delivered to those countries with probably
contactable diseases, as it created a prior awareness to the company and helped them plan
ahead so not to have any pitfalls that could affect its supply rate. Aviagen’s initial practice of bio-
security made it easier to usher in compartmentalisation, and this greatly helped the company’s
supply chain system and given it sufficient competitive advantage as the company became the
first poultry breeding country in the world to achieve a compartmentalisation status certification
(Aviagen Group, 2022b)..

Innovative and Modernised Facilities.

After putting in place a system that aids safety and broader supply spectrum, Aviagen also went
ahead to get facilities that will aid production at a rate that would meet the demands of
customers. These facilities included trucks that made the hatchery stage and process easier
and more rewarding. These trucks usage resulted into an increase in the number of eggs that
got hatched within the same time, and it also improved the state of the eggs during thus
process. By 2006, when the company bought more truck incubators, there was a 36% increase
in incubation and a 50% increase in hatching capacity (Ag Media, 2007).

Figure 3: Aviagen Hatching Trucks (Global Ag Media, 2007)

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Another facility used by Aviagen that improved its value chain was well structured and
regularized chick cardboard boxes for movement and labeling. Adopting better boxes helped to
keep the chicks in better conditions during flights and road trips. Features of the boxes were
more spaces which allowed maximum ventilations and proper labeling strategies.

Alternative Routes for Delivery.

One of the major risks in poultry production is timely and efficient delivery. A lot of factors are
responsible for delay in delivery or bad state of the delivered products, one of which is
challenges or turbulences on major delivery route. The lesson learnt from Aviagen’s risk
management strategy of this risk is the company’s creation of a system that proactively looks for
alternative routes ahead of challenges that might occur, and most times this is done with the aid
of global colleagues involved in different spheres of the transportation industry.
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Figure 4: Global Export Team (Aviagen Group, 2022b)

It also has a protocol measure that allows members of its in-house team go along with the
delivery unit in order to ensure safe delivery of the products (Global Ag Media, 2007).
Sometimes the option of taking alternate routes to meet up with supply included changing
aircrafts and airports or changing the means of transportation.

Open Communication and Transparency.

Aviagen is a company that has its tentacles spread across the globe, and one of the ways it has
achieved this is to have frequent and effective round table discussions on how to improve its
value chain. Aviagen encourages all team members to explore and combine ideas on how best
to meet customers’ demands. These new ideas are then used to create innovative strategies
that are implemented. This methodology helps to root out loopholes that team members might
have observed in the previous delivery sequences, or could occur in the nearest future if left
unchecked. Asides having its in-house team members for round table discussions, Aviagen also
has its stakeholders and external producers in frequent meetings to further close the demand –
supply gap the company might be experiencing (Aviagen Group, 2022b).
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Figure 5: Open communication and transparency. (Aviagen Group, 2022b)

Extensive Global Supply Network.

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Figure 6: Extensive global supply network (Aviagen Group, 2022b).

Another lesson that I learned from a study of Aviagen’s Supply and Value chain is the compay’s
incorporation of an efficient, extensive supply chain. This helps to mitigate the impacts
experienced when there is a major disease outbreak, natural disaster or trade barriers in a
specific location. The birds can be shipped out from another close by location in another region
(Aviagen Group, 2022b). Aviagen being a major poultry production company has put in place an
extensive global supply network that allows it move its produce from one country to another to
avoid infection or any other harmful things that could affect the chicks. Not only is the company
concerned with keeping the chicks away from harm’s way, it also moves them to locations that
are closest to its major market geographical zone, so as not to slow down supply.

In all the lessons learned from the way Aviagen handles risks and builds resilience show that
the company has created a significant advantage within the poultry industry and therefore have
a substantial standing within its industry. The resilience capacity built helps to optimize its value
chain as well as its supply chain through biosecurity, compartmentalisation, effective
communication and a very efficient and extensive supply network and the company has had a
significantly and surprisingly clean record risk wise.

Evidence-Backed Recommendations for managing and improving risk and

resilience in similar organisations.

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The poultry industry is plagued with a lot of risks one of which is within the supply chain.
Analysing the resilience strategies implemented by Aviagen aside the risks listed by experts
makes it easier to draw a line on what works and is easy to implement.

In countries not fully developed, the calculated increase in egg consumption within 2005 and
2015 is approximately 26%, compared to other countries which are more developed with only
about 2.4% increase (Windhorst, 2008). “For the past year, the global poultry industry has been
facing what Rabobank referred to as a "perfect storm" of challenging conditions” (Henriksen,
2021). A major problem has been disruptions to the supply chain, an issue which became even
more significant during and after the COVID-19 pandemic. Many factors contribute to the
persistent supply chain issues the poultry industry faces, and these can be traced to the way the
chicks and broilers are being reared and the surrounding factors, such as diseases, nutrients,
delivery method and time frame (Ventura da Silva, 2013). All these factors matter because laws
and legal rules have been effected to address this lapses, so if not properly carried out, the
industry could have issues with their supply system.

Diseases in poultry farming is one major occurrence that affects poultry industry supply rate.
This problem can however be solved through bio-security and hygiene, as it applies to both
minor and major poultry farming. Poultry bio-security is a set of preventive measures designed
to reduce the risk of disease transmission onto and from the farm (Permin and Detmer, 2007).
This method includes total confinement while operating within specified rules strictly adhered to.
It revolves around certain steps laid down to be carried out religiously, as it is the most
affordable, practical and effectual form of disease control. Bio-Security generally includes
isolating the animals in a controlled space, movement control and consistent sanitation
(Thomassen, 2019).
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Figure 7: Biosecurity implementation in Poultry. (Singh, 2021)

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Figure 8: Biosecurity in Poultry Farming (Oyugi, 2022)

After introducing bio-security into the poultry industry as a way to keep the poultry animals safe
and in the right state, the next strategy that can be introduced to further reduce the impact of the
crisis encroaching the supply chain is compartmentalisation.

In Nigeria, West Africa, peak HPAI (highly pathogenic avian influenza) outbreaks in February
2006 and 2007 affected 3,057 farms and 1.3 million of the country's 140 million birds were
destroyed (FDL, 2008). Common and dangerous poultry diseases are a major reason
compartmentalisation should be introduced in order to avert a huge drain on the supply chain.
The World Organization for Animal Health (OIE) recognizes and approves of
compartmentalisation-based practices coupled with bio-security as an effective method to
ensure business continuity (Application of Compartmentalisation, 2012). Certain countries put in
place restriction on allowing exporters bring in poultry produce once certain poultry diseases
has been confirmed to be in the air. Importing countries have this law in place mostly when
Avian Influenza (AI) and Virulent Newcastle Disease are present in the exporting countries.
When confirmed, there is an automatic loss in the supply chain.
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Figure 9: Compartmentalized Signaling in Aging and Neurodegeneration, (Benedetto et al., 2021, p. 3

Figure 10: Chicks (Aviagen Group, 2022a)

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This is where compartmentalisation comes to play, as it serves as a legitimate reason for

importing countries to permit the supply of poultry produce from certain poultry industries.
Compartmentalisation is a process that works in tandem with bio-security due to the fact that
hygiene, isolation, extra attention and care is exhibited during both processes. When a poultry
company is said to have undergone compartmentalisation, it means a certain amount or
percentage have been put in compartments before they hatched and had been given special
treatment in ways that helped to eradicate the chances of being infected. Once this process has
been confirmed by the importing countries especially during notable disease outbreaks
(Uitgeverij, 2018), an approval of supply is made. Without compartmentalisation the poultry
supply chain will keep suffering great loss.

Figure 11: Compartmentalisation in poultry. (Soisontes, 2015. p. 10)

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The next few steps taken by Aviagen after these expertly proven steps to positively help the
poultry supply system were based on observations. Acquiring better facilities and equipment
helps any line of business in delivering efficiently and without hitch. This process needs to be
done frequently as new and more improved facilities are released. Although cash intensive, it is
a practice that is profitable in the long run. However, realistically, not all poultries can afford to
keep improving on their facilities, most especially small scale businesses and company’s that
would not see an immediate ROI in their value chain. Working with more effective equipment to
increase production rate and speed without putting in place a supply network that takes the
produce out to the customers at approximately the same speed or more will only incure great
loss and decrease in the company's value chain.

Figure 12. Chicken Equipments Used in Poultry Farming Industries (Livi Equipment Supplier,n.d)

Equipment are essential in maintaining a clean and healthy environment for the animals, if well-
structured it helps to minimise situations where the food and water are contaminated by the
waste products because the waste is properly collected and dispersed (Jinfeng poultry, 2022). It
also helps with saving the manual labor and time spent at the industry, which could also further
encourage minimised movement when observing bio-security and hygiene.
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The next thing to put in place is a proper delivery structure and process. Delivering services of
high quality is an important pursuit of any organization in order to create and provide value to
their customers (Grõnroos and Ravald, 2011 p. 3). The profitability of a company is greatly
affected by the satisfaction of its customers (Singh, 2006, p.178). This explains the extra
attention Aviagen gives to its supply structure and process, because it believes one of the core
principles of business which is that the delivery of the goods is an important task (Van Hung et
al., 2014, p.181). One major issue in the supply process of poultry products is that most times
keeping the produce and animals in a good condition during long flights or road trips is difficult.
This sometimes leads to loss of animals to heat stroke or loss in the freshness in the products to
be delivered. A way to curb this, asides making use of equipment that allows enough ventilation,
is to make arrangements for alternative routes in cases of challenges or delay in the normal
routes. Imploring the use of multi delivery routes and conveyance methods is one of the major
factors that aided Aviagen in expanding massively over the decades. Creating strategies to this
effect in a company's supply chain should not be a one man job, as it is often times not effective
to have just one mind try to create expansion routes. Encouraging other employees and team
members to brainstorm has been proven to be more effective. The effective coordination (for
cooperation) of employees has always been of a beneficial influence on a company's
organizational function (Gittel and Weiss, 2004, p. 8).

Conclusion

Risks and resilience is most times not a single act of controlling a situation. The risks in the
poultry industry supply chain cannot be dissolved by one act of resilience, it’s most times a
process that leads to an increase in its value chain over time. Creation and implementing these
strategies require a flexible business model that incorporates the principles of Adaptive
governance in order to incorporate emergent strategies in the face of changing realities an
unexpected events. This helps increase organizational resiliency and reduce its susceptibility to
unforeseen risks.
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