VANDREWSON POULTRY FARM SYSTEM AT DAUIN, NEGROS ORIENTAL

A Case Study

Presented to

Foundation University

In Partial Fulfillment of

the Requirements for

INTRODUCTION TO AGRICULTURAL COMMODITY AND ENTERPRISE

DEVELOPMENT (ACE301 A)

ABERGAS, ELJE H.

SALVO, SHEILA RUBIE A.

SARAÑA, ZYRINE S.

VILLAFLORES, ERIAN L.

2023
OBJECTIVES OF THE STUDY:

The general objectives of this case study is to look after the system implemented by the

poultry business and its significant impact on the overall state of the business.

The case study will be guided by the following specific objectives:

1. To examine the existing system implemented by the poultry business VanDrewSon

Farms.

2. To study San Miguel Corporation’s involvement in the system implemented by

VanDrewSon Farms as one of its affiliates.

3. To point out the gaps and problems of their existing system.

4. To propose a new and improved system to better run the poultry business.

INTRODUCTION:

Agriculture plays an important role in the Philippine economy. According to the

World Bank, 23% of the Filipino workforce is focusing on the production of cops and

exports. However, studies reveal that the Philippines is one of the most vulnerable

agricultural systems due to its geographical location. Various weather conditions such as

monsoons and other extreme weather events heavily affect productivity, therefore,

creating uncertainties for the agriculture sector. This is the reason why it is crucial to

examine the different systems implemented in conducting every step of any venture. The

attempt of assessing the agricultural system applies to every agricultural venture and the

poultry industry is not an exemption.

The Philippine economy is heavily reliant on the production of poultry because it

meets a percentage of the country's protein needs, generates export revenue, and
creates jobs. According to the report of the Bureau of Agricultural Statistics (2014), the

poultry subsector constituted about 15% shares of the total agriculture sector and it

showed a 0.27% growth from the past year. Additionally, chicken (Gallus

gallusdomesticus) has been the leading source of this progress in the subsector. The

chicken industry in the Philippines is diverse. It comprises broilers, layers, or native

chickens. The top animal enterprises which have been the most developed are egg

production and chicken broilers (BAR, 2012). Moreover, the overall reported chicken

population was 167 million as of January 2014 (NMIS, 2014).

Across a wide range of countries, customs, and religions, poultry meat and eggs

are among the animal-derived items that are most commonly consumed on a global scale.

The consumption of poultry meat, eggs, and other animal-sourced commodities has

dramatically expanded during the past few decades. Population expansion, urbanization,

and rising wages in developing nations have been the main drivers of growing demand.

Due to its widespread affordability, low-fat content, and lack of significant religious and

cultural barriers, chicken dominates the meat industry. Due to population increase and

rising individual consumption, the demand for poultry meat and eggs is anticipated to rise

further. Regardless of the area or economic level, the market for poultry meat is expected

to rise, with per capita growth slightly stronger in developing than in developed nations

like the Philippines.

While some poultry businesses thrive, some failed to reach their target. Some of

these failed ventures are the result of a lack of emphasis on the systems used in running

the business. Problems arising especially during the global pandemic such as inbound

and outbound transportation issues, product quality, disease control, marketing efforts,
high production costs, and many more could have been avoided if they gave importance

to their systems. Through re-assessing and focusing on the different systems, these

businesses should have created a much better system and approach to solving such

problems.

The researchers of this case study aim to look at the different systems

implemented by VanDrewSon Farms, an affiliate of San Miguel Corporation, in their

poultry farm business. The researchers aim to analyze the business’ existing input

logistics system, production systems, outbound logistics system, marketing and sales

system, and the services support system of the poultry farm. The researchers will point

out the possible gaps or problems in the existing system and propose a new and improved

system to ensure the long-term success of the poultry business.

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA:

OVERALL SYSTEM OF VANDREWSONS FARM

VanDrewSons Quality
INPUT Logistics Warehouse Production Assessment

Marketing Magnolia
Customers Inc. Outbound
(Value Adding)
Logistics

Figure 1. VanDrewSon Farm Existing System

Figure 1 illustrates the existing system utilize in the overall operations of the

VanDrewSon Farm. This horizontal system contains the typical stages of business such

as the input/inbound logistics stage, the production/operations stage, and the outbound

logistics/ distribution stage. Stages such as the marketing and sales stage and the

services support system were heavily reliant on San Miguel Corporation since the

business is one of its affiliates in the production of poultry products.

INPUT/INBOUND LOGISTICS SYSTEM

San Miguel Corporation

San Miguel Food and Beverages Inc.

San Miguel San Miguel Magnolia PT San San The San

Mills Inc. Food Inc. Inc. Miguel Miguel Purefoods Miguel
Foods Super Hormel Foods
Indonesia Coffee Company Int,
Mix, Inc. Lmtd
Foods Co.,
Business Hatcher Inc.
y
Animal Poultry
Health Feed
Care and
Veterinary
Medicines

VanDrewSons Farms

Figure 2. VanDrewSon Existing Input/Inbound System

Figure 2 shows the existing system in the input/inbound stage of VanDrewSon

Farms. As one of San Miguel Corporations affiliates (growers) of their poultry products,

majority of the inputs are distributed by the corporation itself. From San Miguel

Corporation, commands are directed towards San Miguel Food and Beverages Inc which

focuses on the food sector of the whole corporation. Under SMFBI is Magnolia Inc. which

supplies for the Hatchers afterwards chicks are finally delivered to VanDrewSon Farms.

Another brand that is under SMFBI is San Miguel Foods Inc. which is the direct supplier
of Animal Health Care and Veterinary Medicines and Poultry Feeds to VanDrewSon

Farms

PRODUCTION/OPERATIONS SYSTEM

Biotin for Vitamin

Chicks ADE
15-25 Days (Grower) 25
1-7 Days (Chick Boosters) 8-14 Days (Starter) Day- Harvest (Finisher)

Brooding Growth
INPUT
Stage House

Market Ready
Broilers

Quality Standard/ Inspection

Transportation

Figure 3. VanDrewSon Existing Production/Operations System

Figure 3 shows the existing production and operations system in VanDrewSon

Farms. The inputs arriving to VanDrewSons Farms undergo through various stages in

their production and operations. For the chicks as the main input, from the harvester it is

directed to the Brooding Stage where it is given extra intricate attention where all types

of vitamins and poultry feeds from SMFI are given. After 14 days, the chicks are

transferred to the Growth House where they can freely roam until 25 days where they are

ready to be butchered. SMFI also supplies specific poultry feeds such as Grower and
Finisher for this specific stage of growth. Following that stage, market ready broilers are

gathered at a specific room where quality standard or inspection follows. Ending the

production and operations cycle, the chickens which passed the standards are now ready

to be transported outside VanDrewSon Farms

OUTBOUND LOGISTICS/DISTRIBUTION SYSTEM

Jollibee

Mang
VanDrew Harvester Slaughter Inasal
(Truck) House Magnolia
Son Farms
(San Inc. End
Superm Retailers
Jose)
arkets Users

Malls

Figure 4. VanDrewSon Existing Outbound/ Logistics Distribution System

Figure 4 shows the existing system implemented by VanDrewSon Farms in their

outbound or distribution. Although the whole system of VanDrewSon Farms ends when

they transport their chickens to the slaughter house, the researchers completed the whole

system through plotting the path through which the poultry products are delivered until its

designed end users. After it is slaughtered, the dressed chicken is transported to

Magnolia Inc, one of the brands owned by San Miguel Corporation. Magnolia Inc.

distributed their dressed chicken to various outlets such as fast-food restaurants Jollibee

and Mang Inasal, partner supermarkets, and even to different malls.

MARKETING SYSTEM AND SALE

Sales Management

Market Research

Magnolia
Inc. Promotions

Pricing

Distribution

Figure 5. Magnolia Inc. Marketing System and Sale

Figure 5 illustrates the marketing system and sale integrated by Magnolia Inc.

Considering that the job of VanDrewSon Farms ends at the transportation of the live

chicken to its respective slaughter house, they are now excluded in the marketing system

and sale of the after products. VanDrewSon Farms does not have to exert necessary

marketing efforts considering that San Miguel Corporations are the sole buyers of their

products. The marketing system and sale are now focused on how it reached the end

customers through one of San Miguel Corporations brands, Magnolia Inc. The brand is

responsible for sales management, market research, promotions, pricing, and

distribution.
SERVICES SUPPORT SYSTEM

Agricultural
Research

San
Miguel VanDrewSon
Agricultural
Extension Farms
Corporation

Technological
Research

Figure 6. San Miguel Corporation Services Support System

Figure 6 shows the system implemented by San Miguel Corporation as part of the

services support system offered to their poultry grower affiliate VanDrewSon Farms. San

Miguel Corporation as the direct associate of the farm offers all the necessary support

services such as agricultural research where they relay their findings such as vitamins

and minerals which works best with chicken’s growth, the environment that suits them,

and more. Moreover, they are also the main source of information found in agricultural

extension and necessary technological advancements which may help the poultry

business.
E. GAPS OF THE EXISTING SYSTEM AND PROPOSE IMPROVED SYSTEM

SYSTEMS GAPS PROPOSAL

INPUT/INBOUND LOGISTICS ➢ NONE ➢ NONE

SYSTEM

PRODUCTION/OPERATIONS ➢ The missing link in ➢ VanDrewSon

SYSTEM VanDrewSon Farms should

Farm’s production consider

or operations butchering and

system can be selling the chicken

traced between meat on small local

the quality businesses (Ex.

standard or Eateries) instead of

inspection stage just discarding or

and the giving it all away.

transportation Rejected chickens

stage. It is should be

unavoidable that butchered and

some of the offered to small

chickens are local business

below or over the especially if the

standards set by only problem was

 SMB. The missing its weight not

link in the system passing the

is what to do with desired standard

these chickens per chicken set by

that did not meet SMB. In that way

their standards. VanDrewSon can

not only avoid loss

and gain profit out

of it, but at the

same time help

small local

businesses within

the vicinity.

OUTBOUND ➢ In relation to the ➢ In relation to the

LOGISTICS/DISTRIBUTION production or details above,

SYSTEM operations system VanDrewSon

above, the missing Farms should

link in the consider adding

outbound logistics the path after

or distribution VanDrewSon

system is the path Farms transport

through which their products that

rejected poultry did not pass the

 products shall be standards set

directed. SMC.

MARKETING SYSTEM AND ➢ VanDrewSon ➢ VanDrewSon

SALE Farms should not Farms should

settle at not implement a

having any marketing and

marketing and sales system on

sales system just their own to build a

because they good reputation.

know that SMC VanDrewSon

particularly Farms should

Magnolia Inc. got disregard the idea

them all covered. that just because

There are too they have a sure

complacent on not buyer (SMC),

having a marketing efforts is

marketing and unnecessary.

sales system VanDrewSon

because they Farms should

know that it is consider adding

already a direct promotional efforts

 deal between to establish a good

them and the image that’ll also

corporation. reflect to Magnolia

Inc.’s reputation. It

will give the end

consumers an

assurance that

Magnolia Inc.

supplier of poultry

meat is top tier and

of best quality if

they can see that

VanDrewSon

Farms is building a

good image

through their

promotions.

SERVICES SUPPORT ➢ The problem in ➢ VanDrewSon

SYSTEM this system can be Farms should also

traced by how try to integrate

VanDrewSon agricultural

Farms is heavily research in their

reliant on the system to have a

 readily available strong foundation

information offered of information.

by SMC. This They should not be

might cause overly dependent

underlying on SMC as they

problems are more familiar

considering SMC with how their

might conduct business works

limited agricultural internally

research finding compared to them.

as it is a large

corporation and

their food

business is just a

portion of it.

➢ In terms of

technological
➢ VanDrewSon
research,
Farms should
VanDrewSon
implement
Farms are also too
technological
dependent on San
research alongside
Miguel
agricultural
Corporations.
Improvements on research in their

the equipment are system so that they

heavily dependent can be updated on

on SMC on the latest

whether they have technological

new technologies advancements that

to introduce or they really need.

suggest. Relying too much

on SMC might be a

bad move for them

considering that

SMC itself does

not know how the

business works

internally and what

technologies they

really need to

operate faster and

efficiently.
CONCLUSION:

It is undeniable that the poultry industry plays a significant role in our economy.

Understanding its importance to the Philippine economy provides a deeper reason why

this industry should be managed well.

VanDrewSon Farms is one of the businesses operating in this industry. As an

affiliate of one of the Philippines’ business giants, it is expected to have a clear system of

how they do its work. From inputs down to the services support systems, VanDrewSon

Farms has been complying with the systems they need to perform their activities well. As

one of the “Growers” of the chickens used in poultry products under San Miguel

Corporation, this assures them that the moment they raise an output that fits SMC’s

standards, it is already a closed deal. While this thought might create a positive

atmosphere for the business, it is inevitable to have problems arise especially if they are

too complacent under SMC’s system.

The researchers laid out the different systems implemented in VanDrewSon Farms

and found out that there are gaps in their systems. They proposed new methods, linked

missing stages, and provided an improved system to assure success in their operations.

Alongside these suggestions and the proposed improved system, it is expected that the

venture to run faster, smoother, and more efficiently making the success of VanDrewSon

Farms secure.