What Is Lean Farming?
Lean farming is a method of running a farming business that utilizes your resources efficiently to obtain the maximum results for the minimum cost. Under a lean business model, farmers identify the most profitable aspects of their business and the ones that are essentially draining money, so they can allocate the majority of their resources towards tasks and processes that create the most profit.
View the accompanying slide deck here. This webinar is part 4 of a 4 part series. Watch the rest of the series here.
The benefits of lean farming are clear: you eliminate waste and redundancies and allocate your funds and labor to the parts of your business that drive the highest profits. However, implementing a successful lean farm takes time, practice, and planning. This post will review the fundamentals of lean farming so that you can implement continuous improvement on your farm and meaningful and profitable growth.
Basic Principles of Lean Farming
Center Your Lean Business Plan Around Your Customer
A considerable part of creating a successful lean farm is identifying what your customers value. After all, they are the ones paying you.
A value stream map can help you visualize which parts of your business bring value to your customers and which parts do not. Once you start looking at all of your business decisions from the perspective of adding value for your customers, success will come much easier.
For example, when a lean business person decides to introduce a new product, they do not choose the product and then figure out how to sell it. Instead, they take the time to learn what their customers want and then select the product based on their findings.
Apply SMART Goals
SMART goals are almost a household word; these are goals that are Specific, Measurable, Achievable, Realistic, and Time-Bound. A lean business plan applies the SMART goal-setting philosophy to all projects.
Pay Attention to the Working Environment
When considering what adds value to your farming business and what does not, remember to evaluate the working environment.
For example, tools that you don’t need take up space and may make it difficult to access the tools you do need. If you also spend money to store and maintain them, you may be better off selling the equipment you don’t need.
Unnecessary tools can cause clutter and make the work environment a less enjoyable and productive place. Removing unnecessary clutter will make your greenhouses and barns easier to move around, and tools are less likely to be misplaced or broken amongst the mess.
Standardize The Process
A great way to avoid misunderstandings and miscommunications is to standardize operating processes. In doing so, you’ll help ensure critical tasks are not missed and every task is carried out thoroughly. This will also make it easier for your staff to know what is important to you and what they need to prioritize.
An important part of this step is gaining a really good understanding of how your farm works from start to finish. Ensure every one of your workers has this full understanding, too, so that your whole team is committed to the overall functioning of the farm, not just focused on their role.
It’s crucial to measure and evaluate the standardized process to ensure it is effective - it’s not good enough to cross your fingers and hope for the best in business.
The Phases of Lean Farming
Phase 1: Scope
This phase is about analyzing your farm and scoping out areas that need improvement. It requires a full diagnosis so you can really look at the root causes of any inefficiencies and fix them.
This does not mean you are doing everything yourself; it is about gathering your team and delegating tasks to fix any issues faster. You might want to use the expertise of your team during this step because they will likely have a good idea of what may need improvement in their respective departments. By really getting your team on board during this phase, you can increase accountability and have more brains creating project action plans.
Tools to use during the scope phase
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Customer input – get to know your customers better through surveys. Because people are more likely to fill out surveys or feedback cards if they are easy, try to think of just one question you’d like them to answer rather than giving them a long survey to fill out. Use this survey to help you understand the whole scope of the customer journey, why they buy from you, how they interact with your website or market stall, what products they would like to see, etc. This will allow you to prioritize projects by what will bring in more revenue.
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Analyzing processes – analyze the processes on your farm and how long each stage takes to ensure maximum efficiency. This will help you allocate your resources – including time, money, and labor – more effectively. Use a spreadsheet to track the amount of time each employee takes to complete their task and then look into their different processes to analyze the reasons that some might take longer to do things. One person may have found a quicker way to do things, or perhaps the process that you taught became diluted as it was taught to other people.
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Problem statement – write a problem statement that clearly identifies the issue. For example, your problem statement could be “Last year, I planted 50lbs of squash and only harvested 40lbs. Therefore 10lbs was wasted.” From this problem statement, you can start analyzing why 10lbs was wasted and how to improve the process to reduce that waste.
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Goal statement – a goal statement states what your goal is and the impact achieving the goal would have on your business. For example: say the 10lbs of squash waste cost you $200 in disposal time. If you set a realistic goal to reduce this waste by 50%, then it would mean $100 savings for your business.
- Process maps – map the process for even the simplest of tasks and work through them to identify things that may be missing from the process or any bottlenecks that may be present. This will help you ensure the process is streamlined and flows smoothly.
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Consider what the customer cares about in the process – there are some things that will add value to your business because the customer will care about them, and there are some things that will not. Your customer will care about certifications like food safety and organic certifications and whether the produce is washed before packaging. But there may be other factors that they don’t care about that may be eliminated from your process to make it leaner.
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Eliminate waste – identify the waste in all areas of your farm. This includes everything from excess seeds to inefficiencies in the flow and layout of the farm. For example, imagine that your employees are harvesting rows from start to end but then have to move the bins to the middle for transport – this is an inefficiency. You can improve the process and use your time more efficiently by having your harvesters work towards the transport. This example may seem like it would save an insignificant amount of time, but inefficiencies like these add up significantly and will buy you hours or days over a long period of time. Also, look for things like waiting time; if you have periods of time where staff are waiting for other people to finish their jobs, find something for them to do during that time. Otherwise, you are paying them to do nothing.
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Silent brainstorming – in meetings, silent brainstorming is much more effective than large meetings where people share ideas. There will always be people who do not speak up, simply because they are quieter or because they are not given a chance to speak. Instead, spend 5-10 minutes on issues and have everyone write down suggestions for solutions for you to look through. This will help you to manage the brainstorming time more effectively while receiving invaluable input from everyone on your farm.
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Ask why five times – really drill down into the root cause of the issue by asking why as many times as possible. For example, if you have a pint of cherry tomatoes that went rotten, then you can ask why did it go rotten? The answer might be that no sale was made. Then why was no sale made? Because we overharvested or overproduced, and it sat in storage too long. Well, why did we overproduce? Because sales decreased unexpectedly. Okay, why did sales decrease? We switched markets or had a new competitor or poor marketing. Instead of blaming the waste on poor quality soil or too much sun, we actually have an actionable root cause, and the solution might be that we need to review the markets we attend or market our products better.
- Data analysis – put things into a graph or dashboard so you can easily compare the data you have. This will help you to identify issues like increased waste or reduced profit that need solving.
Phase 2: Solutioning
Once you have established areas in your farm that need improvement during the scoping phase, it’s time to move on to the solutioning phase, where you will determine a plan for addressing the issues you identified.
Tools to use during the solutioning phase
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Impact analysis – if you have a number of tasks you want to get done or a number of problems to solve, you need to look at what will have the most impact on your business and prioritize accordingly. For example, try to determine how much money you will save by fixing each problem save you, and how much each solution will earn you. Prioritize high-impact tasks and deprioritize tasks that are low effort but low impact because you can always decide to come back to them later. Think about how the change will affect your business’s bottom line, and if it does not change much, then it might not be worth the action.
- Sphere of influence – most farms will have owners and farm managers who make high-priority decisions on the farm; however, you should empower other people on the farm to make low effort or low impact decisions to eliminate bottlenecks. Having regular team meetings and ensuring your staff have an overall view of your business can enable you to do this. Create an open dialogue where your employees can come to you with ideas, test them out and show you the results, and then discuss with you why you think they are or aren’t effective. This will show your employees that you care enough to listen to their ideas and how you make decisions and evaluate effectiveness.
Phase 3: Implementation
The final phase of lean farming is the implementation phase where you take the plans you made during the solutioning phase and carry them through to improve your operations.
The steps in the implementation phase
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Create and distribute your implementation plan – once you have a plan in place, you need to discuss it with each department it affects and educate them on the new process. Make it clear that this new process is required and that everybody understands it, especially the supervisors.
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Ongoing analysis – analyze the results of your new process after enough time has passed to see if there were any improvements. If you do not hit your goal for improvement, then you need to look at the reasons why. Did you identify an incorrect root cause? Did all of your employees adopt the new process correctly? Were you targeting the wrong area of your process? Don’t be afraid to go back to the drawing board and get input from the team as to why it may not have achieved the results you wanted. The Lean Farm concept is not a one-and-done thing - it requires continual analysis and improvement. As technology and the market change, you will need to adapt or get left behind.
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Ask for feedback from your employees – Ask your employees how they believe the new process is performing and if they think there are any issues. Since they are the ones conducting the process every day, they will have the best knowledge of what might be going wrong.
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Create visual cue cards – once your new process is established and any issues are ironed out, create visuals that your employees can easily look at to perform the processes correctly. This will help with onboarding new hires or even volunteers, and it leaves no room for doubt.
Frequently Asked Questions
Can you explain the concept of pulling, not pushing?
In lean farming, you want to create a pull for your customers, not a push. Rather than pushing them to buy your product, which is often a turnoff for most people, create a pull from the energy you create and the value you provide. Create a dialogue with customers and a real connection, and they will in turn want to buy your products.
Should I use a SWOT analysis?
SWOT analysis is a big part of business planning and should be used to complement the project charter. Use it to identify your strengths and opportunities so that you can leverage them more effectively. Your SWOT analysis will also help you to see what weaknesses you have so you can work to identify the root causes and create solutions and processes. The “threats” in your SWOT would-be competitors or a new market that did not have the right customer base or too many farms selling the same products there.
What can I do if the problem is a person?
Again use your five whys to identify why this person may be an issue. Have they received enough training? Am I using their talents properly? Drill down into what process is not working rather than the individual person. Look into those things first.
Is it beneficial to offer leftover produce for a discount at the end of the day or the next day at a market?
Yes, because some dollars are better than no dollars. If you do not sell this produce, then it will go to waste. Most people will want to buy the fresh stuff, but you will get bargain hunters who will appreciate the discounted produce.
Do you have any tips on offering home deliveries?
It just matters how this is implemented within your operating model. Some people are willing to pay delivery costs, but some customers are not. You need to account for the additional logistics and transportation in the price of your product so that it is a profitable venture for you.
What software is good for online sales?
It will really come down to what works best for your farm and your budget. Be sure you do your research and find out what works for you and your customers. Many people use Squarespace and just run their online sales through their own websites.
How do you decide whether to sell products on your farm or at a farmer’s market?
Again, this is where you need to analyze your business.
If you do want people to come out, then you need to make it worth their while to spend a half-day or a day there with the family and make it a real attraction. Ask yourself these questions:
- Is your farm in a good location where people can travel to it easily?
- Do you have enough attractions to make it a destination for people?
- Do you have a shop and maybe an educational aspect, some animals, or maybe some food and drink vendors?
Farmer’s markets are great because people already go there for the purpose of finding fresh produce, and you only need to worry about how much competition you’ll have at the market. It’s also a great place to conduct marketing because your ideal customer base is already there, and you can earn lots of word of mouth advertising.
Both farmer’s markets and on-farm sales have their benefits, and you may find a mixture of the two to be great for your business.
