Orc breeding

During Chapter 3, your orc breeding specialist will work to create better orcs from the unmanaged and highly variable stock found on Arclent. This seems certain to affect the strength of your army next time it is needed, but the game also hints that Simon has long-term plans for orckind...

Seed orcs
Before you can get started, you must gather "seed orcs" in Ari-Yhilina, orcs who are notable in some minor way. These seem interchangeable mechanically and the total doesn't affect breeding, at least from what has been shown so far, but you should get them all.

Stats
There are three visible and three hidden stats tracked in orc development, plus one switch: And finally whether or not you implement "Orc Evolution" after it's unlocked by the relevant research.
 * Strength
 * Intelligence
 * Discipline
 * Sapience
 * Attractiveness
 * Magic

These values are initially calculated from your unique orcs' traits (your army quantity and quality do not affect breeding, though the reverse is definitely untrue!). As we can infer from the table below, the best starting values are 8 Strength, 7 Intelligence, and 7 Discipline - but you could have as low as 2 Strength, 4 Intelligence, and 2 Discipline, if you have only Orcent (and the dead orc, which is unmissable).

Each "iteration" of spending time in Yhilin, you can order a +2 increase to one of the first three stat totals, or start Orc Evolution ("Other"), which gives +1 to the latter three. You can make a total of three "upgrades" to stats before you stop experimenting and standardize the army with whatever improvements you've managed.

(Note that the orc "fancy walk" petition does not improve Discipline if funded. Its price is based on Discipline, and it does give a sizable immediate boost to Yhilin's acceptance of orcs, but this is not helpful to breeding.)

Unique orcs
Unique orcs give stat boosts all by themselves.

As for how to obtain these orcs:

Orcent's transformation
One iteration after returning from Zirantia, it will be time to make a real step forward. Orcent will be summoned to the lab, and his body will be transformed into a new model based on your progress. The quality of the result is based on how many of these 5 criteria you achieve: To achieve all of these, you would need to have the best starting values, then order time to be spent on Discipline, Intelligence, and Evolution, and be sure to speak with Implevon.
 * at least 8 Intelligence,
 * at least 10 Intelligence,
 * at least 8 Discipline,
 * at least 10 Discipline,
 * having initiated (not merely researched!) orc evolution.

The results increase the affection of several harem members by varying amounts, plus other benefits:
 * +1 to orc Sapience with at least 4 criteria met.
 * +2 army quality with at least 4 criteria, or +1 with at least 2.
 * A slight increase to Yhilin's acceptance of societal changes (such as orcs) with all 5 criteria.

Minor effects
Having Intelligence and Discipline scores of 10 or higher does change some of the dialogue with the various orcs around Yhilin, especially in the Palace and Outskirts. Similarly, a Sapience score of 5 or higher has some minor dialogue changes as well, specifically with the orc in the Outskirts previously trying to understand why the people of Yhilin "plant hoomans".

War preparations
When you return from Eustrin and talking to Orcent about the status of the army, the orcs' hidden stats are modified one more time based on Simon's relationship with Balia. A score of 70 or higher means that the orcs gain an additional +1 to Sapience, Attractiveness, and Magic.

War effects
As you'd expect, orc stats have some effects on your army status and in the war.