Lean times at the ‘Leading Edge’
5 MIN READ
The Ryan family have a dairy farm in Cappagh, Co. Waterford. Like farmers across Ireland, they’ve seen base manufacturing milk prices hit a high of up to 36 cent a litre and plunge to 22 cent a litre. Such dramatic price changes have a huge effect on their income. To farmers like them, it can sometimes seem as if they are stuck in endless boom-bust cycles, making it hard to plan ahead with any certainty. What could they do about it?
“Managing milk price volatility and the serious knock-on effect to the income of our family business is the single biggest farming challenge we face currently.”
‘Lean’ farming in Waterford
Help for the Ryans came from a surprising source – Japan. Even more surprisingly, it came from breakthroughs made in the Japanese car industry. Toyota, the world’s largest car manufacturer, is credited with introducing a system in the 1950s that greatly reduced waste. Originally called ‘just in time’ production, it eventually became known more widely as ‘Lean manufacturing’ or simply ‘Lean’.
Irish based international company, Leading Edge Group, worked with the Ryans to apply this approach to dairy farming. Was there any wasted work that they could get rid of to help smooth out the boom-bust cycle?
“Lean techniques have evolved over the last 30 years to meet the needs of almost all sectors. If you have people, processes or problems, you can reap the benefits of Lean. In Ireland, dairy processing groups have benefited from Lean transformation over the last 10 years and the time is now set for dairy farmers to benefit just like their counterparts in New Zealand through the Dairy NZ FarmTune programme.”
Joe Aherne, CEO, Leading Edge
Eliminating unnecessary activities
Leading Edge Group began by trying to identify and eliminate unnecessary activities so that work on the farm required less effort, less capital and less time while milk quality remained excellent. The most obvious place to start looking was regular, everyday work like milking. But the Ryans, like most Irish dairy farmers, already took a scientific approach towards managing their herd and looking after the land. Once they had made some milking improvements, it was soon clear that there wasn’t much more room to get rid of waste without making a serious investment in new milking techniques.
So if not the big things, maybe the greatest difference could be made in the little things? Small tasks like fixing broken gate posts, washing down dung and repairing broken milk clusters (the tubes attached to the cow’s udders for milking) have to be done over and over. Maybe this work could be better managed?
Saving 2 minutes of work time every day
To get on top of these small but frequent recurring issues, Leading Edge Group introduced ‘2-Minute Lean’ every day. Everyone working on the farm had to ‘go, see and thoroughly understand’ situations where work hadn’t gone to plan on the previous day. Then they got together to come up with some simple ideas to prevent it happening again. ‘2-Minute Lean’ was considered a success even if it only saved 2 minutes of work time. That was all. If it saved more time then great. The idea was that repeating this approach every day would eventually lead to much bigger savings.
The next thing that Leading Edge and the Ryans worked on was communication. While everyone on the farm was working hard, they weren’t always working on the right things at the right time. The dairy farm in Cappagh is part of a group of four farms called Captal Group in which cows are milked in 5 different farms. Communication between the farms didn’t always run smoothly. Within the Captal group, there were a number of Polish and other Eastern European workers; English was not their first language and they may have had very little or no farming experience.
Plan – Do – Review
This could make communication tricky leading to simple misunderstandings over jobs. So to help make sure that staff were doing the correct farm tasks, there was too much supervision. This ‘hands-on’ approach was effective but it took time. This left very little time for the activity of running a farm business. The solution was to introduce a formal approach to management, something that is common in industry but not so much on farms. They began by running a formal, weekly, Plan-Do-Review meeting lasting about 45 minutes. There were also 10-minute Daily Stand-Up Meetings attended by everyone working on the farm. At the meetings, they planned the work that had to be done that day, reviewed performance from the previous day, and communicated key information. Doing this, they developed a clearly-defined, organised, repeatable system.
“Changing the way we do things is a gradual process where we need a level of support to stay on track when we can easily stray back to our old management methods.”
Labour demand/capacity plan
Finally, there was the issue of optimum staffing levels. The farms ended up under-staffed in spring and over-staffed at other times of the year. Both situations cost Captal money but were hard to sort out. In order to stick to their budget, Leading Edge Group suggested creating a labour demand/capacity plan to make sure that workers were hired only when needed. To do this, they divided the year into farm work periods. They based these periods on events like milking once or twice a day, the calving season and the winter period.
They then created a workload chart for each period to understand where the work was to be done and the labour needed to do it. The result was a labour plan that set out the amount of labour required throughout the year, and a labour budget plan to track the monthly cost of direct labour.
Greater efficiency and savings from ‘Lean’
The results were very positive. “It was very easy to increase efficiencies and save more than 1 hour per worker per day,” says Pat Ryan. “This is a saving of €100/week or €5,000 per worker a year. On a farm like the Ryan’s, this amounts to €20,000 a year in total.”
This collaboration between Leading Edge Group and Captal Group took place in late 2016 helping to save cash as well as freeing up time for the owners to work on growing the farm business. Using Lean techniques, farms like the Ryan’s are able to cut out waste making them better able to survive wild fluctuations in milk prices.
“Lean Dairy Farm presents significant opportunities for Irish dairy farms through embracing the Lean philosophy across all farm activities. Great strides are being taken to optimise individual components of the Farm. Lean is helping to put a streamlined quality system in place, that will integrate all activities in a seamless manner and minimise the overall work effort for the benefit of the farmer, the staff and the bottom line.”
Joe Aherne, CEO, Leading Edge
Find out more
All efforts were made to ensure that the information in this article was accurate at the time of original publication. The content of this article do not constitute financial advice.
Bank of Ireland is regulated by the Central Bank of Ireland.