Industrial Process Techniques - for Farmers?

Time-tested business management strategies like Lean and Six Sigma might work on the farm, too

Lean is not only a way to cook steaks. It's also one of several industrial process improvement techniques first used in manufacturing and designed to help keep businesses running lean and mean.

Six Sigma is a business development strategy originally developed by Motorola in the mid-80s and made famous by Jack Welch at GE. Many industries utilize this concept, which looks to minimize defects and the many causes of variability. It's used in industries that are very repetitive.

Can Lean and Six Simga work in agriculture too? Yes, but only if farmers buy in to and commit to the processes.

According to that oracle of wisdom Wikipedia, the term Six Sigma originated from terminology associated with manufacturing - terms associated with statistical modeling of manufacturing processes. The maturity of a manufacturing process can be described by a sigma rating indicating its yield or the percentage of defect-free products it creates. A six sigma process is one in which 99.99966% of the products manufactured are statistically expected to be free of defects (3.4 defects per million). Motorola set a goal of "six sigma" for all of its manufacturing operations, and this goal became a byword for the management and engineering practices used to achieve it.

"Six sigma can be applied to any production process," says Jeff Haferkamp, Chief Operating Officer at FamilyFarms Group, Brighton, Ill. In fact, Haferkamp has a Black Belt in Lean Six Sigma, indicating high level expertise as a trainer.

Lean, on the other hand, has even more applications in businesses like farming. It looks at the expenditure of resources to accomplish any task. All activities that do not  create value for the end customer are wasteful, and thus a target for elimination.

Working from the perspective of the customer who consumes a product or service, "value" is defined as any action or process that a customer would be willing to pay for.

Lean came out of Japan after WWII, when that country struggled with its manufacturing base. It was driven by the automotive industry – specifically by Toyota, which implemented the TPS (Toyota Production System).

"Japan was looking for ways to compete with Detroit," says Haferkamp. "In the '60s they looked to develop a system to deliver quality better than anyone in the world, and they did it with Lean techniques.”

"The whole idea is to get rid of waste," he says. "In agriculture, you would look for waste in any process of your production system."

What drives this technique is VOC – Voice of the Customer. What does the customer want? What are they willing to pay for? Let's say the customer is Quaker Oats and it wants that bushel of corn on its loading dock at a set time. Any activity not directly helping accomplish that task, says Haferkamp, is waste in the system. Take a look at all the steps in your production system – from seed purchase to final product delivery.  Consider the "5S" approach: sort, straighten, shine, standardize and sustain. When was the last time you used that stuff in the corner of your machine shop - the stuff with the cobwebs?  Turn it into money. Or, shine it up, and use it in a standardized process that can be repeated over and over.

"The 5S approach to clean up any area is a common Lean technique that can be applied to any business," says Haferkamp.

Next, consider adding Visual Management to your operation. Simply put, it means put a label on something to avoid making the same mistake over and over. Standardize signs and map processes – even landowner relations – and you start to wipe out inefficiencies. Look for ways to make something quicker so you can make more of it or reduce time needed for other things

"Every manufacturing company in the U.S. has done this because they have been forced to be extremely conscious of cost and efficiency," says Haferkamp. “Lean techniques are utilized in all types of companies: hospitals, hotels, etc. – but in farming we are just beginning to crack the code."

Are farmers already cost averse and fairly efficient? Could they be even more efficient by understanding logistics and standardization?

"Getting farmers to think about what they do as a manufacturing process and to incorporate these techniques into their business makes sense as farms become bigger," Haferkamp says. "That will provide more leverage over a larger base of operation."

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