As businesses and employees change, it is easy for day-to-day practices to slip into a rut. However, according to consultant Chris Lorimer, lean management can be adapted to almost every type of farming or other business.
“It’s about creating a continuous-improvement culture,” he says. The key elements are improvements in the efficiency of processes and removing waste – whether that’s in the form of time, skills or physical production. Improvements in productivity and morale should result.
See also: Farm management advice
The seven principles of lean management are:
- Understand your processes. Break everything down – from suppliers and inputs to outputs and customers – to make every section transparent.
- Understand your customer (or staff) experience. Get real feedback from customers or staff about every stage of the process.
- Focus on waste. Time, skills, physical production, excess stock: Where can waste be trimmed?
- Teamwork. It’s vital that everyone is involved in the process and commits to putting it into practice. Ultimately, a profitable business is in everyone’s interest.
- Visibility. Make everything visible, from process charts to individual targets and a daily diary of jobs.
- Flow. Look at the needs of your customers/livestock/crops/staff and work out the most efficient way to carry out each job and meet those targets.
- Structure. Define, measure, analyse, improve and then control. Once you have made the changes, make sure they stick.
Lean management tools
- Visual displays of best practice – for example, management of calf and dam following birth
- Review targets regularly
- Improve grassland management by adopting more efficient processes
- Reduce labour costs by defining responsibilities at harvest
- Reduce waste by reviewing feed or grain storage capabilities and practices
- Make a plan and tailor business activities to it
Good leadership and individual accountability are essential in any business, says Mr Lorimer. “Be open about change and encourage the improvements you need. You want staff to be thinking about tackling the impossible, not about the way it has always been done.”
Giving staff greater responsibility for their own roles and equipment will bolster morale and productivity, while writing down standard procedures and displaying them will also encourage every team member to do the job correctly every time, reducing variability and waste.
When drawing up a management plan, it is important to focus on the easy wins with the greatest payoff first, adds Mr Lorimer. “Focus on the 20% of things that cause 80% of the issues and you will be able to make significant improvements.”
It is also important to create goals that can be reached within three months – otherwise everyone runs out of enthusiasm. “Measure things now and measure the benefits of change, and embed the culture so it can’t change back again.”
Budgeting ahead cuts costs in Haughton, Cheshire
Robin Williams milks 260 cows at Haughton Hall Farm, Haughton, Cheshire. He adopted lean management in 2010, after taking part in a workshop. At the time he milked 148 cows on an organic, year-round calving system, and was seeking to increase stocking rates while also reducing costs of production.
Top tips for lean management
- Keep it simple – remove complicated processes
- Have clear roles, responsibilities and priorities
- Examine processes and routines – what adds value and what doesn’t? Cut the waste
- Leadership and staff involvement are critical
- Collaborate with others to make the most-efficient use of advisers and share best practice
“It really helps to break all the costs down and understand them,” he says. “We do an annual budget but we now keep an eye on each individual cost monthly. If something creeps up, you can immediately see why: we recently increased bedding to try to reduce somatic cell counts (SCCs), and we could see the cost benefit clearly.”
Budgeting ahead has also enabled Mr Williams to improve cow health and survive the current downturn in milk prices relatively unscathed. He now vaccinates to avoid health problems, has vet visits to improve fertility, and buys feed in advance to reduce costs. “If you don’t pregnancy-diagnose you can’t create an accurate budget. It’s just about taking the guesswork out of everything,” he says.
As a result of these and other changes, he has slashed his replacement cost from 7.6p/litre to 5.22p/litre and is on target to reduce his replacement rate from 28% to 17-18%.
“We could see forage would be tight this winter, so we sold the higher-SCC cows and no longer need to buy in extra feed,” he adds. “We were targeting a net margin of 10p/litre and we’re down 5-6p/litre because of the lower milk price – but without acting ahead we wouldn’t be making anything.”