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Process Improvement
Dick Wittman, Wittman Consultingwww.wittmanconsulting.com
http://www.wittmanconsulting.com/
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Connecting Principles of Process Improvement to Farm Safety & Resilience
Dick Wittman, Wittman Consultingwww.wittmanconsulting.com
http://www.wittmanconsulting.com/
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Activity Based Management Process Improvement + Activity Based Costing (ABC’s of Ag)
Dick Wittman, Wittman Consultingwww.wittmanconsulting.com
http://www.wittmanconsulting.com/
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BiosketchAg Lender – FCS (1972-1980) – Spokane, WA & Washington, DCPartner in 20,000 acre diversified family farm business (1980-present) New title – Jan. 1, 2017 – Board Chairman/ Transition Coach
Farm management consultant (1980-present) Farm family transitions and formalization of governance structures, financial
planning, managerial accounting, process improvement, consultant trainingIndustry boards/affiliations Farm Financial Standards Council – Past President PNW Direct Seed Association – Director, Past President Director – numerous commodity group and bank boards Faculty member – TEPAP Program (fin mgmt. & process improvement);
Texas A&M King Ranch Institute (MA)
www.wittmanconsulting.com
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http://www.wittmanconsulting.com/
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ASK YOURSELF…
Am I running a PROFESSIONALLY MANAGED FAMILY FARM BUSINESS…or a MOB?
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DEFINITION OF INSANITY
DOING THE SAME THING OVER AND OVER AGAIN AND EXPECTING A DIFFERENT RESULT!
Albert Einstein – March 23, 2017
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What do these have to do with Process Improvement?
Job Descriptions
Time & Motion Study
Value Added Premiums
SOPs, GAPs, BMPs
Listeria, E Coli, BSE, Salmonella
Process Mapping
Soldiering
Work accident/OSHA fine
NoTill efficiency
Six SigmaPERT/CPM
IncentivizingWork Place Imprmts
Fast food time clock
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IQ Test – What do following have to do with Process Improvement?
Tractor rollover – flat tire (no fluid); spraying on steep ground; no seat belt; roll bar taken offSkidder kills operator – 500’ slope; no seat beltEmployee gets caught spraying ineligible chemical near creekCombine kills grandpa (SK 2010) – grandson kid hits button in cab; 2nd wife sells farm defying sons farm plansFuel spill – employee fueling implement with auto-shutoff nozzle leaves scene; nozzle fails; big MESS!Employee talking on cell phone while winging out self-propelled sprayer – hits power lines & fries tires!Employee talking on cell phone; tips logging truck over!
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Answer…When you have:
No clearly defined company culture for: Documenting and following SOPs Auditing Process Improvement objectives Rewarding/incentivizing improvements
Bad things happen!
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CLASS EXERCISE
Identify situations where a process in your operation could benefit from a standardized operating procedure …
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Case Studies –#1 – Grain Hauling Efficiency
Problem: 7 semis; under-loading trucks 40 bu./trip Analysis Opportunity cost = $.15/bu. x 40 bu/trip = $6.00/trip 6 loads/day x 45 days @ $6.00/trip x 7 trucks = $11,340/yr 5% cost reduction => 5% reduction in trucking needs Motivator: Port of Entry fines $100-500/overload
Solution/Options: Grain wagon electronic scale - $3,250 + $1,500 install
Payback in ½ season of harvest!!! Electronic scales – each truck (ok for commercial hauler)
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#2-Convert 40’ Trailer to Grain TrainsProblem: combines waiting on trucks; drivers hard to find; new trailers cost prohibitive. How improve efficiency & lower cost?Analysis Haul capacity: 40’ trailer = 850 bu; doubles = 1,150 bu Increased capacity = 300 bu @ $.15/bu x 6 trips/day =
$270/day savings x 45 days = $12,150/ year 5 trucks haul what 7 did previously
Solution/Options: Purchase used trailers $45-50,000 Sell old trailer $10,000; (optional: SELL two power units) 3 year net payback, excluding sale of excess power units
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How did we solve problem?
Defined problemEngaged stakeholdersMapped activityAnalyzed cost of inefficiencyIdentified alternative solutionsImplemented optimal solutionEvaluated results of new process
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Agenda
What is “process management”Motivation and rewards for excellenceConsequences when you are laxModels, Applications and Case Studies for putting concepts into practice
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Agenda - MRASHWhat is “process management” & how does it fit into your vision & culture as a “professionally managed business”What comes first: Creation of Robust SAFETY POLICY & SOP Creation of Professional Management Culture &
100% Buy-in?Models, Applications and Case Studies for putting concepts into practice
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100 Yr History of Process ImprovementResource providers doing it for years…never had a Harvard MBA term for it!
Scientific Engineering – Frederick Taylor (1911) –summarizes 30 years of study in steel industry1st exposure to term – Cheaper by the Dozens Movie about time and motion studies - Frank Gilbreth
Total Quality Management (1980’s) Six Sigma Business Process Re-engineering Business Process Re-design… and dozens of other buzzwordsBottom Line: deciding what to measure & manage
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Scientific Engineering – Frederick Taylor (1911) written after experimenting with concept in steel industry 1880-1910
Four principles Develop “work science” to replace “rule-of-thumb” Manager’s job: select, train, develop standards Managers cooperate with workers to insuring
consistency Responsibilities divided: management and workforce
Principle Management Objective: prosperity for employee coupled with prosperity for employer
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Pig Iron Case Study
Principles applied to steel millworkers handling pig iron.Assessed motions, capacity of workersDeveloped process, picked 1st class handlers
Baseline – workers loaded 12 ½ tons of steel /dayResults– handled 47 T/day – productivity 400% Worker pay 60% ($1.15 $1.85/day) Cost of production dropped 56% ($.072 $.033/T)
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Frank Gilbreth – father of “Time & Motion Studies”
Studied motions of bricklayers reduced movements from 18 to 5 repositioned materials, support systems for
maximum efficiencyResults 350 bricks/hour vs. 120 industry average Bricklayers selected based on performance;
given substantial pay increasesGilbreth’s techniques still used today
to increase efficiency.
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Trivia ? “Calculate savings (time/$) laying 800,000 bricks at college health science bldg (360 man-days)”
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Savings – Money & Time800,000 bricks @ 120/hr 6,667 hrs 6,667hrs @$15/hr = $100,000 4 person crew 6-10s6.5 months
800,000 bricks @ 350/hr 2,286 hrs 2,286 hrs @$20/hr = $45,700 4 person crew 5-8s71 days/3.3 months
Savings $54,300 (54.3% lower cost) 49% less time to complete project
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Lessons from Gilbreth/TaylorOne man alone can’t improve“soldiering” is big obstacleTakes management working with employees
so both benefit: Owners: lower cost production Employees: increased pay; better work conditions
(more time off, safer environment )
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Modern Applications of Process Improvement Successes
Health care/pharmacy, fast foods, seeding systems, dairy, timber harvesting, crop production
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Happy Days CorpMeet my friend Bruce Finch Fast Food Vendor par excellence!
Lifetime commitment to Process ImprovementMultiple Taco Time outletsObserved time from order window to departure …not happy!Challenged staff to identify solutions…gave $ incentivesTime/Motion Project: engaged team to study Cinco de Mayo
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Imagine clock like this in your shop, drill or sprayer!26
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Strategy/ResultsTake homes
Digital timers track time from order to handing food out windowTracked average & best times; employees continually worked to BEAT timesIncentives given for efficiencyRESULTS Doubled taco output over 2 years Dropped labor cost per taco 13%
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Health Care – Robotic Pharmacy
Applications Used 1/3 hospital pharmacies Dispenses medications in
cassettes, envelopesBenefits
Filling accuracy 99.9% Checking labor 90% Missing meds 92% Inventory 10-20% Medication costs 54%
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Milking RobotsLandry Brothers Dairy, St Albert, Quebec Source: JD Furrow
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“…robots don’t take holidays or call in sick, never get tired, lose focus or have a bad day…and they NEVER FORGET important things about each cow…like how many times a day a cow needs to be massaged!”
Three shifts of workers replaced with 10 robots @ $200,000• lower mastitis• less management stress• more attractive to young workers• 10% increase in milk production• better insemination results
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Halversons2012 Top Producer of the Year Award
11 state potato operation; major supplier - FritoLayGregg, Eric, John, Leah –two generations TEPAP Transitioning to next generationMajor commitment to GAPs, SOPs, environmental metrics (Triple Bottom Line)Use McDonald SOPs as model to improve brand
story: JD8400T cost/hour
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Agricultural Gains from Process Improvement
Conversion to NoTill/Direct SeedingHarvest operations–combine and trucksHay harvesting/haulingGrain transportation – trucks, unit trainsSelf-propelled sprayersTimber harvesting
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Classic Process Improvement Case StudyTransition from Intensive Tillage to Direct Seeding/NoTill
Benefits: improved economic viability and environmental sustainability:Sequesters CO2 .5T/acre/yrCan OM 0.1%/Yr.Improves air & water qualityImproves wildlife habitatLowers fossil fuel use ↓ 3.5gal/acre per USDA
Increases economic viabilityCarbon emission offsets 20-25% ↓
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Operation Cost/AcreFall Plow $15.00Spring Harrow 4.00Spring Cultivate 6.00Cultivate/Spray Incorporate 6.002nd Incorporation-Cultivator 6.00Seed-Conventional Drill 15.00Harrow 4.00Roller/Packer 4.00
Total Costs Per Acre $60.00
Costs/Acre*- Conventional Seeding - Spring Peas*From activity based accounting analysis.
Recreational farming at its best!!!
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Operation Cost/AcreFall Heavy Harrow $4.00Fall Roundup-Green Bridge 7.00Custom Hire-Direct Seed Drill 17.00Harrow 3.00Roller/Packer 3.00
Total Costs Per Acre $35.50
Qualitative Benefits: less water loss, less compaction, less erosion risk
Costs/Acre - Direct Seeded Spring Peas…saves 3 steps & $25/acre
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1998 2000
ATR .50 1.05
OPMR .1275 .1633
ROA 6.47% 17.14%
ROE 3.88% 22.61%
A Tale of Two Tillage Systems
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Shephards Grain – Food AllianceValue added premiums for wheat grown in Direct Seed cropping systemFood Alliance certified Certification Costs S. T. Periodic Audits
$1.00/bu premium1,200 ac wheat @80 bu/ac = $96,000 bonus!
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Timber Harvest Efficiency Trends
Horse loggingDozers with winchesSkiddersFaller-bunchersStroker/delimbers
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2-3 loads/day
9 loads/day
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Process Improvement – Wittman FarmsBaseline - 1980
6 partners, 2,500 ac farm, 2,500 pasture, BIG crew4 combines; 6 trucksFarming implements covered ground 6-8 times/year
Today4 partners, 20,000 acres100% Direct SeededEfficiency compared to 1980 1 combine replaces 6 1 semi replaces 4-2T tks Sprayer=“10x” acres/day
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Definition – Process Improvement
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Systematic approach to closing of process or system performance gaps through streamlining and cycle time reduction, and identification and elimination of causes of below specifications quality, process variation, and non-value-adding activities.
source: google.com
…doesn’t this sound exciting!!!
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Definition – Time & Motion Study(Encyclopedia Britannica): analysis of time spent in going
through the different motions of a job or series of jobs. Time-and-motion studies were first instituted in offices and factories in the United States in the early 20th century. These studies were adopted on a wide scale as a means of improving the methods of work by subdividing the different operations of a job into measurable elements. Such analyses were to standardize work… check the efficiency of people and equipment… and the methodology to achieve results.
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Dick’s Definition:Process Improvement is…
• Identifying jobs that are repetitive• Documenting how jobs are supposed to be
performed (SOP, GAP, BMP)• Evaluating how to do it better:
• More Efficient• Safer• More Economical, and • Environmentally sustainable
• Auditing how you’re doing & rewarding gainsProcess Improvement-Wittman
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Where can Process Improvement be applied?
… and how do we put principles into practice?
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Where does this topic fit in Management System?
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Wittman’s Rule –
Safety is not a Management Island…It’s part of a systems approach and culture of a professionally managed business.
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Organize/Divide Responsibility
Communicate &Coordinate Efforts
Measure Performance
Plan
ImplementPlan
Establish Controls
Adjust Plan
Set Policies SOPs, BMPs
Establish Mission, Vision, Core Values
ManagementSystem
MODEL
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SOP’s, GAPs*, BMPs*25% have SOPs in place!
What are they? guidance documents and standards for repetitious or routine jobs
How used? Training – new hires Leverage communication for multiple employees Assures jobs done following BMPs, GAPs Increases safety & lowers cost of production Basis for measuring job performance, auditing Accessing markets, value-added premiums
GAP=Good Agric Practice; BMP=Best Mgmt PracticeProcess Improvement-Wittman
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Consequences of Undocumented SOPs
Inconsistent workAccidentsInefficient processesFood safety hazards health risks, finesMarket demand destruction & loss of market accessExcessive turnover
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Food Quality “Hits”Alar Scare-applesE coli–leafy greens, ground beefSalmonella - peanutsListeria – Colorado & California cantaloupeBSE - beef
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Applications of SOPs/GAPsOffice functionsHarvest operations & servicingCrop agronomic practicesTimber harvest & manufacturing processesFuel and Supply StorageWorker safety guidelinesFood safety practicesHerd health & stock handling proceduresValue added market access
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Office Management FunctionsDatabase managementComputer access protocolsInternal controls/securityData BackupsNetwork and internetFinancial function SOPs
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Where would your business be tomorrow if:
You were hit by busComputer technology expert left countryBookkeeper ran off with hired manComputer fried itself & the backup systemNO one else knows your system! How I learned the hard way…
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Building Office SOPs
Define issues needing documentationWrite down in SOPFile in accessible locationUse for training/orientationUpdate existing/new items as needed
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Equipment Operations & Servicing
Maintenance checklistsOperating instructions – key equipmentShop protocolsSeasonal work flow planningHarvest crew orientationOn farm grain storage protocols
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Equipment Operations/Harvest Examples
Maintenance & Servicing Functions Harvest Orientation—protocols for driving, scales, bin dumping, field habitsChassis Checklists Book-MBR\Exhibits Files\7.3 Power Unit
Chassis Checklist.doc
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ChassisChecklist
Imagine truck fleet How avoid the
“…dreaded phone call”…
“Are you SURE you checked everything?”
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Service Truck –Stocking Checklist
“Why are there two empty hydraulic oil jugs in here
…and NO anti-freeze???”
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Truck Legal Weights
'97 Peterbilt + Timpte Doubles Tare * See Steer Tire for steer axle load limLegal
'97 Peterbilt - lead only TareLegal
'97 Western + Western Doubles Tare "Cranberry Cruiser" Legal
'97 Western - lead only TareLegal
'99 Western + Wilson Doubles TareLegal
'99 Western - lead only TareLegal
'99 Western (purple) + pup Tare * See Steer Tire for steer axle load limLegal ** 43,500 with tag down or 34,000 wi
'99 Western (purple) - truck only TareLegal
'95 Western (blue) + pup TareLegal
'95 Western (blue) - truck only TareLegal
35,200104,000
32,860105,000
32,500
36,300105,000
31,480
Wittman Farms FleetLegal Load Limits
93,300
92,000
12,000*
12,000*
34,000 34,000 20,000 20,000
43,500** 20,000 20,000
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Wittman Farms Fleet
Legal Load Limits
'97 Peterbilt + Timpte DoublesTare35,200* See Steer Tire for steer axle load limit
Legal104,000
'97 Peterbilt - lead onlyTare
Legal
'97 Western + Western DoublesTare32,860
"Cranberry Cruiser"Legal105,000
'97 Western - lead onlyTare
Legal
'99 Western + Wilson DoublesTare36,300
Legal105,000
'99 Western - lead onlyTare
Legal
'99 Western (purple) + pupTare31,480* See Steer Tire for steer axle load limit
Legal92,000** 43,500 with tag down or 34,000 with tag up
'99 Western (purple) - truck onlyTare
Legal
'95 Western (blue) + pupTare32,500
Legal93,300
'95 Western (blue) - truck onlyTare
Legal
'99 IH 8100Tare24,120
Legal55,000
'87 IH 1900Tare16,200
Legal
34,000
34,000
20,000
20,000
43,500**
20,000
20,000
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Challenger 55General Information
Make: Caterpillar
Model: Challenger 55 When changing fuel filters:
Serial #: 7DM01485- DO NOT remove all filters at once. Start with water sep, prime system and start. Repeat process with of the other fuel filters.
Year:
Date Purchased:
Purchase Price:
Hrs/Mls at Purchase:
Current Hrs/Miles: 8047 hrs
Maintenance
Engine Oil Hydraulic Oil
Engine Oil Type: 15W-40 Hyd Oil Type: Qwiklift HTB (green)
Engine Oil Capacity: 9 gal Hyd Oil Capacity:
Engine Oil Filter(s): Don-P554004 Hyd Oil Filter(s): Don-P179518
Last Service: 8047 hrs (3/29/19) Last Service: 7689 hrs (2/10/17)
Fuel Filter Transmission Oil
Fuel Filter(s): Don-P551315 x2 or Trans Oil Type:
CAT-IR-0751 x2 Trans Oil Capacity:
Fuel/water sep: P551430 or CAT-117-4089 Trans Oil Filter(s): Don-P164378 x2 or
Last Service: 8047 hrs (3/29/19) CAT-1G8878 x2
Air Filter Last Service: 7689 hrs (2/10/17)
Air Filter(s): Don-P532501 DEF Filter
Cab Filter: 116-5796 NLNLUU
DEF Filter(s):
Last Service: 7851 hrs (12/12/17)
Blew out both!
Coolant Filter Last Service:
Coolant Filter(s):
Last Service:
To Do Winter 2018/19
COMPLETED
- full service oil and all filters
- check and replace air filters as needed
- detail cab
- inspect hyd ports
- check transmission fluids
- fix door latch/strut
- check lights
EquipmentService Log• Gen Information• Lubrication Specs• Maintenance History• “To Do” List
Administration• Updated Annually• Employee logs
changes • Shop Manager
records
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Fuel & Supply (chem/fert) StorageHandling proceduresSecuritySpill preventionIdentification/open container policiesFueling protocols
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Spill Prevention Containment & Countermeasure Plan
Facility owner, operators & key contactsFacility Description Operations Storage – detailed maps of tanks,
location, and storage capacity Drainage Pathway & Distance to
navigable waterSpill HistoryPotential spill predictions, volumes, rates and controlsPrevention measures providedRecord keeping/meetings, inspections
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$15,000 price tag… but required to source fuel!
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Semi-Truck Use Guidelines SOPSource: Barron Farms Inc1. Daily – inspect complete chassis (brakes, steering linkage, overall
truck condition)2. Drivers may only use cell phones when trucks parked3. Drivers allowed to have passengers with written approval4. Inspect field entrances/exits before entry; mark edges clearly5. Maximum speed limit 7 mph driveways, yards6. Always park trucks on flat with brakes set; driver stays in truck
while loading7. Drivers expected to obey all traffic & weight limit restrictions8. Drivers required to have minimum 10 hours rest before next shift9. All truck loading at bins requires one helper assist while loading10. At end of day, all trucks to be parked in designated parking areas
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ABCs of Farming
Activity Based Costing
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What is ABC?Activity based approach to tracking cost of production
ExamplesCrop Operation: Pre-plant ground
preparation Seeding/Fertilization Pest Control Harvest Mowing, Harrow
Harvest Combining Trucking Grain Wagon Support Crew Services
Hay Harvesting Swathing Raking Turning Baling Hauling & Stacking Tarping
Silage Harvest Chopping Hauling Silage pit receiving Tarping
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Uses of ABC InformationIdentifies costs of separate activitiesEnables comparisons Industry or competitor costs Custom rates
Helps optimize In-source Out-source
Sets basis for pricing hiring or providing custom services
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Information Needed for AnalysisOwnership costs Cost of power unit/implement Planning Horizon/useful life Salvage value Cost of capital or borrowing Insurance & housing costs Tax rates
WARNING: Use YOUR costs NOT economic costs from someone
else’s data NOT replacement cost
Annual usage of power unit – all operations
Operating costs Fuel
Consumption/hour Cost of fuel
Labor cost Primary operators Support personnel
Repairs and Maintenance Other Equip Support Overhead
Costs (combine labor vs parts example)
Productivity of Operation Working width Speed Field efficiency %
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$2.64/Acre
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16,000ac $4.03/ac25,000ac $3.83/ac
47%
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Let’s examine a baler purchase analysis…using Ag Manager
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Modeling Example: Transition from Round Baler to Big Square Baler
Map process – swath double rake bale load haul storage efficiency
Analyze cost of each step – labor, fuel, equipment to bale & haulQuantify efficiency savings 42% ($18.8710.86/T) = $27,500/yr. @2,500T
Invest in new system!
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$8.95/T owned vs.$18.00/t hired$9/t x 2500T =$22,500
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Challenges to ABC
Predicting obsolescence, econ deprecEstimating inflation in capital replacement costs & technology changeWhich pricing strategy is right? Cover actual costs + margin, or Cover replacement costs + marginCapturing indirect OH/support costs essential to specific equip operations
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Conclusions
Critical information for making incremental decisions - expansionIdentifies when it’s best to in-source vs. outsourceSets accurate base for pricing in custom work & trade relationshipsCan be reasonable alternative to cost center tracking & allocation approach
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Resources
Machinery Cost Calculator – Alb Agwww.agric.gov.ab.ca/app24/costcalculators/
machineryAG Manager Information – Kansas Stwww.agmanager.info/decision-toolsMachinery Cost Calculator – Iowa State (William Edwards) www.extension.iastate.edu/agdm
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http://www.agric.gov.ab.ca/app24/costcalculators/machineryhttp://www.agmanager.info/decision-toolshttp://www.extension.iastate.edu/agdm
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Safety ProceduresExposures – too many to list PTO, conveyors, hoists Grain bin deaths “riders”–truck, combine, tractor Equipment rollovers – dozers,
skidders, tractors Transport – cargo strapping Runaways-vehicles, implements Story: Partner’s wife & kids
driving potato truckWhat is your “safety policy”?
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Think Proactively…what’s this?
Lee Gilbert, ID St Insurance DivisionConducts safety audits, on-site training Supervisor Workshops on Accident Investigations Shop Audits – inspects for potential hazards
For every $ in insurance claim, employer spends $4-5Incentives for thinking proactively; insurance premium modifications
Best line: “…supervisor needs to communicate on near misses/close calls”
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Interesting stats…
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1 Disability/death
10 Minor injuries
30 Property damages
600 Near misses/close calls
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“Predictable Surprises…” – Mike Mullane, NASA Astronaut, author of Riding Rockets*
Success = doing things well over & over consistentlyRecipe for success = managing “processes” Be aware of “normalization of deviance” Take responsibility for adherence to standards Be courageous leader in alerting to deviations Beware of “false feedback” – absence of something bad
happening … (it didn’t cause wreck last time!) Listen to people closest to the scene or front line Archive, review and learn from “near misses” and disasters
*chronicled 1986 Challenger Space Shuttle explosion
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Grain Bin SOPsSOPs for storing at proper moistureRules for entry & monitoring Harness, extraction
equipment Buddy systems
Rules for riding in grain transport implements
Grain Entrapment Deaths• 2009 - 41• 2010 – 59• 2011 – 33• 2012 – 21• 2013 – 33• 2014 – 38• 2015 – 24• 2016 – 29• 2017 – 23
Source: Purdue University
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SOPs for entry and working in manure storage facilities?
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What is your cell phone policy?
Rules on texting, callingTechnology free zonesTime and place for useConsequences for violations
What’s driving increases in auto insurance
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Are you asking for predictable surprise?
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Social Media Policy & SOPsIs your company using Twitter, FacebookPolicy and SOPs should address: What to include on sites Who’s in charge of updating and/or
answering inquiries When posts are “personal views” vs
“business views”
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Implementation Strategies forSafety Process Improvement (SOPs)
Identify hazards unique to farm situationDocument SOPs – Include rewards for “quality improvements” and Punishments for “violations”
Define protocols for employee training, orientation (meeting dates, agenda, participation logs)Appoint safety officerConduct safety audits (i.e. State Workmen’s Comp)Define Zero Tolerance Policy – worksite rules
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Hazard Areas –Dairy DozenSept 2014 Successful Farming –OSHA Local Emphasis Program –New York Collaborative effort: Farm Bureau, NE Dairy Producers, NY Center- Ag Medicine & Health, Cornell University
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Job Site Safety SOPs –Think like Seattle, WA contractor
Pocket size “little red book” with rulesNo access to jobsite until go thru training & sign-offOnce on site, hard hat with “sticker” requiredZero tolerance for violations of rulesLesson to farmers: is your farm a playground or work site?Challenge: how maintain our “culture” AND be safe?
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Resources – Safety SOPsiAuditor – build checklists, conduct inspections, file reports http://sfty.io/q4Af/LOcHr6VzQx
Farm Safety Hazard Checklist http://fyi.uwex.edu/agsafety/employer-
resources/farm-hazard-inspection-checklists/Great Plains Center for Ag Health 10 health centers focused on farm safety/health www.cdc.gov/niosh/oep/agctrhom.html
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http://sfty.io/q4Af/LOcHr6VzQxhttp://fyi.uwex.edu/agsafety/employer-resources/farm-hazard-inspection-checklists/http://www.cdc.gov/niosh/oep/agctrhom.html
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2 New Apps – WA State Department of Labor and Industry
Good Observation, Near Miss and Accident Reporting Documents safety incidents in workplace Uses: training, hazard recognition, risk analysis,
process improvementSafe Me (Retail industry focused) Tool for on-boarding new employees Uses: safety lessons, videos, hazard ID
https://ohsonline.com/articles/2017/02/27/wisha-touts-new-safety-apps.asp
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Safety Models – Putting Principles into PracticeProgressive Ag Foundation (PAF)
PAF supported by CHS FoundationRole model: Brian Kuhl, volunteerFather injured in fall on farm; recoveredOrganization hosts 400 safety days/yr for kids age 4-12What local resources can we tap in our local communities?
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Break !!!!!
Enjoy the slide show…
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Deming’s Law*
A system always gives you 100% of what the system was designed to do…94% of failures come from systems, not PEOPLE.
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William Edward Deming
Raised on Iowa farmDeveloped process improvement model adopted by Toyota in 1950s
Plan Do Measure Adjust
“If you can’t describe what you are doing as a process, you don’t know what you are doing.”
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Example – Deming’s LawPick number between 1 & 9Multiply answer times 9Add the 2 digits in your answer & subtract 5Pick letter in alphabet that matches order (i.e. 5 = E)Identify single word country name whose 1stletter = last answerCaution: CANNOT use googleName a wild exotic animal that starts with last letter of country name?
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Countries starting with D Denmark Djibouti Dominica Dominican Republic Dhekelia
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Agronomic Areas of ApplicationNutrient managementIntegrated pest management (IPM)Access to conservation revenue incentive programs (CSP, EQIP)Input documentation – seed, fertilizer, chemical, field operationsPrecision Farming–VR Application
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VRA Case Study
Problem: Excessive reliance on technical support 8 hours awayAnalysis/Problem: Studied process: combine maps creation of VRA .arm files Timeliness & quality of yield maps unacceptable Poor consistency-soil fertility analysis and yield projections
Solution in-source process with external consulting support Mapped stages of process; paid consultant to train on process Developed 5 page SOP…VRA prescriptions now done in house Save thousands $ annually…better process!
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Mapping & Documenting VRA Process
Pre-harvest yield monitor calibration in-field validation download data to field record software create raw yield maps clean up yield data build variability zones
Review zone maps with agronomy manager for nutrient level recommendations integrate soil tests with zone variance & assign rates by zone enter revised rates & create VRA application files (.arm) download .arm files to drill control computer go home and have a beer!
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Food Safety, GAPs, BMPs
Dual drivers pushing growers for implementation Defensive (food safety, water quality, etc.) Offensive (market access, premiums)Process for putting GAPs in placeResources available to minimize cost and avoid “re-inventing” wheel
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Certification/Branding Programs – significant factor in market access & value added premiums
ISO standards – CODEX International StandardsFood Alliance – PNW certifierPNW Direct Seed Assn – Farm Smart ProgramOregon Country Beef – natural beef marketsCarbon Crediting – standards to access carbon offset marketsUSDA Conserv. Security Prgm. (CSP)–conservation practicesSFI – branding of Forestry Practices to access marketsIMI Global – Source & Age verification – beefWalmart – Sustainability IndexWho certifies value added milk producers?
Foundation for certification = SOPs, BMPs, GAPs, Protocols, Audits
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Major Driver – Food Safety Modernization Act 2010 (FSMA)
Key provisions: FDA authority for recall Shift from detention to
prevention Standards for production &
harvest Focus on traceability Compensation for growers
injured by erroneous recall Registered facilities require
HACCP plan
Other Provisions Potatoes now covered (“th
Exempt: Small operations
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Terms we need to better understand
HACCP – Hazard Analysis Critical Control Points http://en.wikipedia.org/wiki/HACCP
ISO – CODEX World Health (see list of ISO categories)
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http://en.wikipedia.org/wiki/HACCP
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International Standards
ISO 14001 – Environmental impactsISO 9001 – Product QualityISO 22001 – Food SafetyISO 65 – Humane Animal treatmentOHS 18001 – Occupation Health & Safety
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Questions to Address
What processes require documentation? Depends on your commodity Check law and regulation applicable to you
How map SOPs? Learn from peers who’ve DONE IT already
Where can I get help…and NOT reinvent the wheel? (Hint: go to Google.com)
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GAP Certification Case StudyLarge potato/vegetable grower in several states selling to a wide array of suppliers, some fresh market, some canning/processing, and the chip market
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Why they chose to get certified?
Suppliers asking for certification – not always the same or sure of what they were asking forDrive toward “sustainability” – companies asking for more information about suppliers to meet consumer demands/interests.Opportunity – by voluntarily going through the process, company hoped to create more differentiation
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Process – Step 1Investigative: Researched consulting firms
providing auditing and training. Learned:
A. SOP’s = foundation for documenting practices.B. Many standards: GFSI, SQF, BRC, USDAC. Firm helping to get ready for audit should not be
the auditor – independence necessaryD. Several consulting firms have proven processesE. Checklists on the web show what audits will be
like – leads to self-prep
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Decision…Cost-Benefit…ResultsDecision: Some SOPs/GAPs in place; didn’t hire “preparatory” firm
Used WCS to evaluate SOP’s; provide webinar on conceptsEmployed USDA: willing to converse and review materials prior to on-site audit (in essence offering some free training).
Cost: USDA $90 per hour, 1.5 days on-site: cost approximately $3,000 + $5,000 CEO + $8,000 outside consulting fees = $16,000 Total
Benefit: No “hard requirement” for certification, but certificate showed suppliers company is proactive.
Conclusions/Issues: Cantaloupe issues in 2011 and food safety problems even when audited will bring sharper focus/scrutiny to the audits in the future.
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GAP Elements –Potato farm selling fresh potatoes to wholesale processor
P lan 12 pages long Traceability proceduresWorker health/hygiene trainingClothing & jewelry policyHand-washing techniquesPolicy on taking breaksManureComposting Practices
Harvesting tools, containersVehicles in production fieldsPlant & Storage warehouseLoading delivery trucksWashing lineStorage binsRodent & Pest Control
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Farm SOP: “All visitors must sign in & wash hands…all SOPs must be recorded & available to inspectors & buyers.”
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Nationally Recognized Organizations in Fruit and Vegetable Industry promoting GAPs
Western Growers – CA based; fresh fruit, nuts and veggies http://www.wga.com
United Fresh Produce Association – Southeast focus; Wash DC headquartersProduce Safety Alliance – Cornell Univ, FDA, USDACenter for Produce Safety – UC Davis www.cps.ucdavis.edu
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http://www.wga.com/http://www.cps.ucdavis.edu/
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Herd Health/Stock Handling
Areas of applicationStock handlingAnimal identification/tracebackHerd Health (BQA – Beef Quality Assurance)Confined Animal Feeding Operations (CAFO)Waste Management
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Herd Health SOPs
What happens when SOPs don’t exist? Inconsistent procedures Duplicative or unnecessary costs Health problems, losses Jeopardize access to premium marketsSample – Beef Herd Health SOP.doc
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Processing MapCattle Treatments
Keeps crew organized Permanent record of treatmentVerification for feedlot to avoid duplicate inputVerification to market outlet - consumer
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CAFO Elements –Dairy Spreading Manure in Chesapeake Bay drainage
Plan is 6” thick! Farmstead plan-map,
water quality plan Field plan-solid mgmt,
maps, attributes, soil mgmt plans
Fertility mgmt-nutrients, leaching index, soil tests
Manure/Waste utilization –annual prodn, analysis, application planning
Must have “certified planner”Plan required before you can apply manure to “CAFO compliant field”Annual review mandatory to renew annual permitsPlans sets minimum standards on barnyard run-off, lagoons, silage leach
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“We are mandated to have GAP, SPCC, CAFO in place… CAFO most complicated regulation on farm.”
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Operating Plan- “What We Do”
Strategic Plan“How we do it”
Production
MarketingFinancing
Capital Plan
Growth
In-source?Out-source?
Value-Added
StrategicAlliances
TillageSystem
Diversification
CropRotation
BusinessStructure
EnvironmentalStewardship
WF Version-Mike Boehlje Strategic Thinking Model
VisionLong RangeObjectives
Short-term Goals
Action PlansKRAs
Evaluate
Budget
MissionQuality of Life
TechnologyAdoption
Why farmers are paid big bucks!
Genetics
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Emtman Case Study – Insource or Outsource Herdsman Role?
ProblemNeeded cattle to maximize resource useNo one in “genetic pool” good at cattleUnable to retain stable hired herdsmanPoor conception ratesPoor weaning %Distraction from core strength - farming
SolutionOutsourced management to cousinsCompensated based on $/live calf weanedStill furnished herd base and paid all inputs
ResultsSignificant weaning %Comparable costs to in-sourcing labor“farmers” much happier!
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Stock HandlingQuiz: Name recent incidents that gave meat industry black eye?Answers: downer cows; chicken cages; …What is your “animal treatment” culture?Do you have an animal care policy & SOPs?Food Safety protocols “up to snuff”?
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Animal Care –vs. “Agendas”
Who won this one?Aired 20-20U-tube hits galoreAre “good guys” safe?
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Do you have an animal care statement?
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“Never use a gun to herd cattle!” Temple Grandin
Source: May 2006, Dairy Today, Meg Gaige – Aurora Ridge Dairy
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Beef Quality Assurance Assessment3 tier program–higher tier, more consumer friendlyOnline certification programs – state specificBe aware of “wannabe” programs Global Animal Partnership–5-step Animal Welfare Board weighted to animal rights extremists Major markets like Whole Foods rely on them!!
“It’s a process of figuring out what could go wrong, planning to avoid it—then validating & documenting what you’ve done…just part of good business.” NE BQA veterinarian, Dee Griffin
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Livestock ResourcesBeef Quality Assurance - http://www.bqa.org/ Beef, dairy training manuals and resources Transportation, animal care/handling, use of antibiotic use, etc.
Dairy – National Dairy BQA Manual www.bqa.org/CMDocs/bqa/DairyBQAManual.pdf
DairyWorks, Tom FuhrmanAgTexas FCS – Allan Watson, COO process improvement programs Client incentive program-1/3 of 1st year savings
Animal Care - FARM Evaluation guide Temple Grandin – CSU – stock handling systems
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http://www.bqa.org/
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Variance Analysis – Key Component of Process Improvement
What is your policy re: following SOPs?What variances concern: Cattle foreman? Dairy feed manager? Sprayer operator? Timber harvester? French fry plant?
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Analyzing Variances & ImpactsStatistical Process Control/Influence Diagrams
Causes Normal deviations (“noise”) Out-of-bounds: procedural or system
process weaknessImpacts Cost over-runs Crop damage Product quality damage
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Variance Case Study - SprayerSituation: Goal is to spray @ specific target/acreProblem – chemical being over-applied based on acreageConsequences: 10% cost over-run; crop damage; envir. issuesAnalysis/Potential Causes of Problem Overlap Nozzle wear Flow meter calibration
Quiz: (1) What is biggest factor leading to Precision Ag?(2) What Preventive Maintenance strategies could be
implemented to avoid this problem?
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Milk Cost of Production/cwt
2007 2012 2016Income $19.24 $19.39 $16.00
Feed $7.76 52% 10.53 58% 9.28 Labor 1.57 11% 1.70 9% ?Herd Replmt 1.36 9% 1.29 7% ?Other* 4.26 28% 4.71 26% ?
Prod Cost $14.95 100% $18.23 100%Interest .80 .47
UCOP $15.75 82% $18.70 96.4% $16.00Net Income $ 3.49 18% $ .69 3.6%
Source: 2007 Clients-CA, AZ, ID, NM OK Client DataMoore Stephens Wurth Frazer & Tarbet, LLP
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U. S. Top Dairies Peer Data
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2014 2015 2016
Income/Cwt $23.79 $16.98 $14.89
Tot Cost/Cwt $16.27 $15.17 $13.71
Feed Cost/Cwt $ 9.22 $7.71 $8.37
Feed as % Tot Cost 56.7% 50.8% 61.1%
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Impact of 5% over-run
Assume – breakeven situation Total milk cost/cwt = $16.00 Feed is 58% of total cost $9.28/cwtImpact of process improvement 5% cut feed costs .05 x $9.28 = $.46 Operating Profit Margin (OPM)
increases from 0% to 2.9%
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EquipmentSupport
General Farm
Labor
SupportCenters
ProductionCost Centers
ProfitCenters
Sales, General & Administrative Exp
Corn ProductionCost Center
Silage ProductionCost Center
Wheat ProductionCost Center
Corn Profit Center
Wheat Profit Center
Milk Profit Center
Corn Inventory
Finance & Other Exp
Inventory Value
Wheat Inventory
Silage Inventory
Milk ProductionCost CenterSub-Centers
• Feed•Herd Health
•Manure Mgmt•Physical Plant Costs
ReplacementHeifers
Period Costs
Corn Inventory
Replmt Heifers
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EquipmentSupport
General Farm
Labor
SupportCenters
ProductionCost Centers
ProfitCenters
Sales, General & Administrative Exp
Feed
Manure Mgmt
Milk Profit Center
Finance & Other Exp
Inventory Value
Milk ProductionCost Center
Herd Health
Period CostsFeed
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Variance Analysis – Quality ControlTimber Applications
Timber harvest SOPs Limbing, bucking, trim
specifications Defect management
Manufacturing and Processing Milling tolerances Quality Control audits
Other applications ??
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Combine 1 Combine 2 Combine 3 Combine 4 Combine 5S690 S690 S690 S690 S690
SPG0785266 SCG0785076 SAG0785064 SKH0795458 SKG0785365 TotalAnnual Cost 64,984.44$ 75,525.78$ 75,525.78$ 96,996.60$ 59,964.96$ 372,997.56$ Repair Cost - Estimate 10,000.00$ 10,000.00$ 10,000.00$ 10,000.00$ 10,000.00$ 50,000.00$
74,984.44$ 85,525.78$ 85,525.78$ 106,996.60$ 69,964.96$ 422,997.56$
Acres - Estimate 4,500 4,500 4,500 4,500 4,500 22,500.00
Opportunity CostWorking Hours - Total Cost 65,016.79$ 74,670.61$ 75,602.66$ 86,060.71$ 64,354.45$ 365,705.22$ Idle Hours Empty - Total Cost 13,457.74$ 14,008.39$ 11,997.28$ 19,643.15$ 10,578.63$ 69,685.18$ Cost of warming up, cooling down and repairs.Idle Hours Full - Total Cost 728.39$ 753.56$ 607.14$ 1,103.40$ 891.76$ 4,084.25$ Cost of delays on carts or grain transportation.Transport Hours - Total Cost 8,455.31$ 9,257.72$ 9,403.25$ 12,674.29$ 7,030.45$ 46,821.02$ Cost of transport due to field location.
Acres Opportunity CostWorking Acres Completed 4,500 4,500 4,500 4,500 4,500 22,500 Idle Acres Empty - Lost 1,088 977 813 1,151 875 4,904 Acres lost sitting idle.Idle Acres Full - Lost 59 53 41 65 74 291 Acres lost waiting for grain logistics.Transport Acres Lost 627 595 588 702 527 3,038 Acres lost due to transport times. Total Acres Possible 6,273 6,124 5,942 6,417 5,976 30,733
Harvest Smart Opportunity CostAcres Using Harvest Smart 2,560 3,219 3,028 2,661 3,169 14,638 Acres Not Using Harvest Smart 1,940 1,281 1,472 1,839 1,331 7,862 Harvest Smart % Improvement 20% 20% 20% 20% 20%Lost Acres from Harvest Smart 388 256 294 368 266 1,572 Acres lost due to not using JD Harvest SmartTotal Acres With Harvest Smart 4,888 4,756 4,794 4,868 4,766 24,072 Lost Opportunity Cost 7,556.40$ 4,868.61$ 5,596.02$ 8,743.02$ 4,139.19$ 30,903.24$ Cost of acres lost due to not using JD Harvest Smart
Opportunity Cost Totals (Not Including Transport Required)Total Lost Costs 21,742.53$ 19,630.55$ 18,200.44$ 29,489.57$ 15,609.58$ 104,672.68$ Cost of combines not working and not using Harvest SmartTotal Lost Acres 1,535 1,286 1,149 1,583 1,215 6,767 Acres lost due to not working and not using Harvest SmartLost Acres from Carts/Harvest Smart 447 309 336 432 340 1,863 Acres lost from waiting full and not using Harvest Smart
Hebert Grain Ventures - Combine Utilization CalculationsMaverick Ag Ltd
October 2019
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Tracking efficiency: warming up/idling, transport, grain cart delays, Harvest Smart useTotal Opportunity Costs = $104, 672; Lost acres = 6,767 (30% of Total)
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Labour, Power and Machinery Optimization/Utilization
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Star Performer
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What is your governance culture?
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“All organizations are hierarchical. At each level people serve under those above them. An organization is therefore a structured institution. I f it is not, it is a MOB. Mobs do not get things done, they destroy things.”
Theodore Leavitt – Management for Business Growth
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Environmental Audits
Mandated by many value added programs to get certifiedGreat way to “…clean us messes”“people do what is inspected…not expected!”Cost $2,500-5,000
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Human Resource SOPsJob announcement, application, interview
Job descriptions, training & orientationSafety GuidelinesPerformance ReviewsCompensation Policy and Payroll ProceduresEmployee benefits, vacation, sick leave
Are these ALL addressed in Employee Handbook/ Management System & Governance Manual?
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20 Interview Questions
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Are Policies Written Down?…Common “Land Mines”
Housing Company vehicles Room and boardExpense accountsSetting compensationWithdrawals of capitalInsider/inter-entity transactions
Family Employment PolicyMedical benefitsRetirement plans/pensionsBusiness benefit continuationWorkdays and holidaysVacations, sick leaveBuyout understandingsOutside activities
36% do!
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Establish Mission, Vision, Core Values
Organize/Divide Responsibility
Communicate &Coordinate Efforts
Measure Performance
Plan
ImplementPlan
Establish Controls
Adjust Plan
ManagementSystem
MODEL Set Policies & SOPs
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What does your organizational structure look like?
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Log Yard
Manager
Pres/Gen MgrFinance, Mktg
Timber Procurement
Manager
Service Manager
Mill Operations Manager
Board of DirectorsPolicy, Management Direction, Owner ROE &
Financial Control
Asst MgrWildlife & Recreation
Program
Seasonal PoolTom, Dick, Suzie
Harry, Sam & Glenda
Advisory Board*
*Advisory BoardInsurance Agent Milling Industry ExpertLoan Officer Marketing Advisor Forester AccountantAttorney Wildlife ExpertPeer Board- Other Timber Producers/Processors
Comptoller -
Office Staff
Forest Growth
Manager
Timber IndustryOrg Chart Sample
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Specialty Enterprises
Manager
Pres/Gen MgrFinance, Mktg
CropsProduction Manager
Equipment SupportManager
Cattle &HuntingManager
Board of DirectorsPolicy, Management Direction, Owner ROE &
Financial Control
Asst MgrBldg Improvements and
Rentals
Seasonal Pool:Tom, Dick, Suzie
Harry, Sam & Glenda
Advisory Board*
*Advisory BoardInsurance Agent Investment AdvisorLoan Officer Marketing AdvisorCrop Scout AccountantAttorney Cattle Breeding AdvisorForester Wildlife ExpertPeer Board- Clearwater Direct Seeders
Does structure reflect authority & accountability flows?Board Management
Responsibility Center Mgrs
The M issing Pieces
Office Staff
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Peer Group
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Responsibilities – Finance (CFO) and Marketing
• Budget preparation and progress review• Maintain records and circulate to management team• Arrange loans for operating and capital purposes • Banking responsibilities• Capital investment analysis; negotiate purchases• Market grain commodities• Preparation of tax returns• Manage insurance programs• Liaison with attorney on legal matters• Supervise investments for pension plan
Do job descriptions clearly define duties and responsibilit ies?
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Sample Job Description –Precision Ag & Safety Manager
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Precision Ag & Agronomy Responsibilities – 7 duty areas
Administrative/Field Staff Support – 4 duty areas
Shop Operations & Safety Responsibilities• Primary backup to Service Manager in planning, coordination and direction of shop
operations• Assist Equipment Support Manager and other shop personnel in maintaining
equipment• Develop and maintain maintenance logs for service scheduling and safety compliance• Oversee farm safety program: establish SOPs, stock safety supplies, monitor compliance
and ensure training and consistent implementation throughout workforce• Oversee environmental compliance and waste disposition • Monitor fuel and lube inventories, and coordinate restocking• Prepare quarterly fuel and road tax return• Audit and stock shop supply inventory to perform maintenance and repair activities• Oversee winterization of equipment and headquarters facilities
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Impact of Personality Styles on Attitudes Toward Safety
DISC Styles D’s (Dominance) – run the bus; focus on results; impatient
with safety SOPs I’s (Influence) – cheerleaders; team focused; like the
idea…not the discipline of implementation S’s (Steadiness) - concerned for others; will support safety C’s (Conscientiousness) – like structure, accuracy and
implement methodically
Which personality style is best for a Safety Officer?
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Job Description – Chairman of Board
Policy review and refinement Investment analysis Strategic planning Hiring, coaching, grooming successors Performance review and feedback “Assisting” and “advising” successors in day-
to-day operations without telling them what to do
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This process doesn’t have to insult our intelligence!
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How avoid “creating concrete”?“Negatives” of SOPs Inflexible, tends to create robots Discourages exercise of judgment & common sense
How do you balance micro-managing with efficiency and consistencyShould we focus on goal or tactics?Reward consistency vs. creativity…Encourage innovative thinking
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What incentives are you using?“…avoiding concrete”
Rewards for clean inspectionsShare in premiums gained over marketGift/bonus for attending safety meetingBonuses for days without accidentsRecognize more efficient or safe processesOther incentives?
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Remember the “3rd stakeholder”…the Consumer (excerpts from Taylor’s Scientific Engineering)
“…is it fair workers get 60% wage hike while employer gets 3.6x efficiency?
“Consumers pay for the profits of both the employee and employer…they must share in the gain with increased quality and lower cost.
“Greatest impact of P.I. has been introduction of machinery to replace people. Consumers have been greatest beneficiaries.”
No better place than agriculture to make this point!!
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Case Study Introduction
FDA Warning Letter…Sparboe
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Final IQ Test Sparboe Case
What happened?Where was breakdown in org chart?How could it have been prevented?What effect did it have on company?What was company response and how will this impact future SOPs … at Sparboe? … other competitors?
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5 Steps to Survive Undercover VideoJeanne Bernick – March 2014 Top Producer
Prepare – assume someone taping youDevelop solid track records – animal careAccept responsibility – immediately; don’t blame othersIncrease transparency – welcome review by customers, experts, mediaDemonstrate and communicate ethical obligation to provide for animal well-being
Other Resources: www.AgWeb.com/agriculture_challenge
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Where to Start - Implementation StrategyForm in-house team with outside facilitatorReview legislation, regulatory requirements; attend training conferences – food safetyResearch peers who have implemented GAPs, SOPs, BMPs…define scope you need to codifyResearch audit/certifying organizationsConsider engaging auditor/certifier to do “test drive”Develop strategy for getting documentation in place Do your own, outsource
Put SOPs where staff can FIND them!
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SOPs: Stored in Dropbox
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“Safety Is Not a Management Island…”Support based in Mission, Vision & Core Values
Creation addressed in Operational & Strategic Planning
Responsibility fixed in Organization chart & role definition
Criteria for lead role Communication culture, personality type
Commitment fixed in Board Policies
Execution Platform SOPs
Enforcement rests with Management control system, Performance Reviews, Compliance Audits
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Time to wrap up…Have you taken inventory of your Process Improvement elements?
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Summary – “Good is the enemy of great!”Ag business LOTS of MOVING PARTS Must excel at process mapping and costingPromote culture of 100% buy-in for SOP implementation Will you be “proactive” or “reactive”? Assign “lead role” to accountable party – Process
Improvement Coordinator Remember – Checking box not the same as living it! Audit for compliance, punish and reward strategically
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Challenge – bringing it all together
Array of manuals Office Manual Employee Handbook Management System Shop Manual CAFO, GAP CSP
Need manual to describe your manuals!!
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…don’t forget to applyProcess Improvement to all spokes!
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Resources
For free resource downloads, articles & Guidebook/DVD order forms, see: www.wittmanconsulting.com
Guidebook aids clients in working through implementation process
Video allows participants to “take story home”
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Our Future Process Improvement-Wittman Consulting 2020169
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Questions?
Process ImprovementConnecting Principles of Process Improvement to Farm Safety & Resilience�Activity Based Management � Process Improvement + � Activity Based Costing (ABC’s of Ag)BiosketchAsk yourself…Definition of insanity��Doing the Same thing over and over again and expecting a different result!�Slide Number 8IQ Test – What do following have to do with Process Improvement?Answer…When you have:Class exercise Case Studies – �#1 – Grain Hauling Efficiency#2-Convert 40’ Trailer to Grain TrainsHow did we solve problem?AgendaAgenda - MRASH100 Yr History of Process Improvement �Resource providers doing it for years…never had a Harvard MBA term for it!Scientific Engineering – Frederick Taylor (1911) written after experimenting with concept in steel industry 1880-1910Pig Iron Case StudyFrank Gilbreth – father of “Time & Motion Studies” Savings – Money & TimeLessons from Gilbreth/Taylor�Modern Applications of Process Improvement SuccessesHappy Days Corp�Meet my friend Bruce Finch �Fast Food Vendor par excellence!Slide Number 26Strategy/Results�Take homesHealth Care – Robotic PharmacyMilking Robots�Landry Brothers Dairy, St Albert, Quebec Source: JD FurrowHalversons�2012 Top Producer of the Year AwardAgricultural Gains from Process Improvement Classic Process Improvement Case Study� �Transition from Intensive Tillage to Direct Seeding/NoTillSlide Number 33Slide Number 34Slide Number 35Slide Number 36Shephards Grain – Food AllianceTimber Harvest Efficiency TrendsSlide Number 39Process Improvement – Wittman FarmsDefinition – Process ImprovementDefinition – Time & Motion StudyDick’s Definition:�Process Improvement is…Where can Process Improvement be applied?Where does this topic fit in Management System?Slide Number 46Slide Number 47SOP’s, GAPs*, BMPs*�25% have SOPs in place!Consequences of Undocumented SOPsFood Quality “Hits”Applications of SOPs/GAPsOffice Management FunctionsWhere would your business be tomorrow if:Building Office SOPsEquipment Operations & ServicingEquipment Operations/Harvest ExamplesChassis�ChecklistService Truck – Stocking ChecklistTruck Legal WeightsSlide Number 60Fuel & Supply (chem/fert) StorageSpill Prevention Containment & Countermeasure PlanSemi-Truck Use Guidelines SOP�Source: Barron Farms IncABCs of FarmingWhat is ABC?� Activity based approach to tracking cost of productionUses of ABC InformationInformation Needed for AnalysisSlide Number 68Slide Number 69Slide Number 70Slide Number 71Slide Number 72Slide Number 73Slide Number 74Slide Number 75Let’s examine a baler purchase analysis…using Ag ManagerModeling Example: Transition from Round Baler to Big Square BalerSlide Number 78Challenges to ABCConclusionsResourcesSafety ProceduresThink Proactively� …what’s this? Interesting stats…“Predictable Surprises…” – Mike Mullane, NASA Astronaut, author of Riding Rockets*Grain Bin SOPsSlide Number 87What is your cell phone policy?Social Media Policy & SOPsImplementation Strategies for�Safety Process Improvement (SOPs)Hazard Areas –Dairy Dozen�Sept 2014 Successful Farming – OSHA Local Emphasis Program – New York� Collaborative effort: Farm Bureau, NE Dairy Producers, NY Center- Ag Medicine & Health, Cornell UniversityJob Site Safety SOPs – �Think like Seattle, WA contractorResources – Safety SOPs2 New Apps – WA State Department of Labor and IndustrySafety Models – Putting Principles into Practice�Progressive Ag Foundation (PAF)Break !!!!!Deming’s Law*William Edward DemingExample – Deming’s LawSlide Number 100Agronomic Areas of ApplicationVRA �Case Study Mapping & Documenting VRA ProcessFood Safety, GAPs, BMPsCertification/Branding Programs – significant factor in market access & value added premiumsMajor Driver – Food Safety Modernization Act 2010 (FSMA)Terms we need to better understandInternational StandardsQuestions to AddressGAP Certification Case StudyWhy they chose to get certified?Process – Step 1Decision…Cost-Benefit…ResultsGAP Elements –�Potato farm selling fresh potatoes to wholesale processorNationally Recognized Organizations in Fruit and Vegetable Industry promoting GAPsSlide Number 116Herd Health/Stock HandlingHerd Health SOPsSlide Number 119Processing Map�Cattle TreatmentsCAFO Elements –�Dairy Spreading Manure in Chesapeake Bay drainageSlide Number 122Emtman Case Study – Insource or Outsource Herdsman Role?Stock HandlingAnimal Care –�vs. “Agendas”Do you have an animal care statement?Beef Quality Assurance AssessmentLivestock ResourcesVariance Analysis – Key Component of Process ImprovementAnalyzing Variances & Impacts�Statistical Process Control/Influence DiagramsVariance Case Study - SprayerSlide Number 132U. S. Top Dairies Peer DataImpact of 5% over-runSlide Number 135Slide Number 136Variance Analysis – Quality Control�Timber ApplicationsSlide Number 138Slide Number 139What is your governance culture?Environmental AuditsHuman Resource SOPsAre Policies Written Down? �…Common “Land Mines”Slide Number 144Slide Number 145Slide Number 146Slide Number 147Slide Number 148Sample Job Description – �Precision Ag & Safety ManagerImpact of Personality Styles on Attitudes Toward SafetySlide Number 151Job Description – Chairman of BoardSlide Number 153How avoid “creating concrete”?What incentives are you using?�“…avoiding concrete”Remember the “3rd stakeholder”…the Consumer (excerpts from Taylor’s Scientific Engineering)Case Study Introduction�FDA Warning Letter…SparboeFinal IQ Test Sparboe Case5 Steps to Survive Undercover Video�Jeanne Bernick – March 2014 Top ProducerWhere to Start - Implementation StrategySlide Number 161“Safety Is Not a Management Island…”Slide Number 163Summary – “Good is the enemy of great!”Challenge – bringing it all together…don’t forget to apply�Process Improvement to all spokes!ResourcesSlide Number 169Questions?