Arable and beef farmers Alison and Danny Milne’s “lean management” approach is forecast to significantly improve their income over the next three years.
The couple farm 304ha across two units in Fife, based at Demperston Farm, Auchtermuchty, which is an AHDB Monitor Farm. They had an eight-month business plan that they were struggling to put in place.
A lean management review in April with advisor Ray McCreadie from Lean TeamGB changed this and spurred them into action.
“Ninety-five percent of what we do is waste because it doesn’t add value – it adds cost,” says Mr McCreadie. “If you work on the waste side, you can make a big difference to your farm.”
What is ‘lean management’?
Lean management is a long-term business approach that encourages continuous, small, incremental changes by drilling down and identifying waste – whether that’s lost time or money.
With a recent new arrival to the family, one aim of the review was to ensure a good work-life balance.
Communication is the key
The Milnes quickly learned that they were wasting time and effort by not communicating with each other properly.
“We both had this business plan to improve cow fertility and livestock management,” says Alison. “But I’d written it and Dan hadn’t read it. We were both running about doing different things and not prioritising enough.”
Through their review with Mr McCreadie they found that Alison, who had a background in management, understood things in a very different way to Danny, who was more practical and visual.
While she liked tables, lists and a long-term view, he liked graphs, images and to see the monetary differences year-by-year – so the business plan was translated into something that made sense to both of them.
The review helped them speed up the launch of their holiday cottage business. Within two weeks they had advertised the property and have since taken £3,500 in rental income and further bookings.
A five-year plan was also introduced to improve fertility and health in the 65-head suckler cow herd. Until then, they had been trying out different breeds and not been disciplined about looking at where their replacements were coming from.
Now the Milnes have a stricter policy for deciding which calves to keep, which to cull and what new stock to bring in.
“We can now see the cattle business moving in the right direction,” says Alison. An additional £6,650/year improvement in income is now forecast from the cattle, giving £19,950 over three years.
Saving fuel and time
On the arable enterprise, the review identified wasted fuel and time. With the second unit 12 miles away, growing wheat on it meant lengthy trips transporting grain to the main farm for drying.
Instead, they decided to crop the second unit to barley and beans. This will save them an estimated £2,000/year, mainly in labour and transport. They will also do more soil testing and mapping, making more use of data.
They have also been working with neighbours to see how they could cut out waste by sharing machinery and addressing the excuse that tight harvest windows don’t allow for sharing kit.
The group approached this as if they were one farm, looking at what machinery they would need to keep and working through practical scenarios. They identified £500,000 worth of kit they could strip out as a result.
Now, management is tighter and the Milnes spend less time doing things that are not a priority, while focusing on those that are.
“We always communicate and look at it in financial terms and ask does this fit into our long term perspective – and if it doesn’t, then it doesn’t get done.”
Once a week they go through invoices together and more than once a month they go through the budget, and look at their overdraft and costs, such as fuel and machinery.
They hold morning meetings rather than evening ones as they know they will waste time by not being so effective after a long day. The couple also write down their priorities each week so they know what to focus on.
“We were in danger of just rolling along and looking back in 20 years and realising we’d just done the same thing [as the generation before],” says Alison.
“It is critical for others to come in [and review the business]. What you spend on someone will absolutely come back to you. The lessons we’ve learned have been invaluable.”
How to identify waste in your farm business
Lean management adviser Ray McCreadie says farmers can use the mnemonic TIM WOODS to identify the “eight deadly wastes” that are common in their business. Mr McCreadie encouraged farmers to identify their own TIM WOODS and address issues of waste on their farms:
Transportation – moving materials and information
Inventory – have you got too much kit?
Motion that is unnecessary – this includes everything from an untidy workshop to sending someone to do a job without the right equipment
Waiting time – long periods of inactivity for people, information, machinery or materials
Overproduction – are you producing more than your internal/external customer needs?
Overprocessing – are you producing more than the required specification without suitable reward?
Defects – errors in paperwork or product, resulting in scrap, rework or repair
Skills – lost people capacity or untapped human capital.