A Framework for Building a Successful Plan

Friday, December 9, 2016

To develop a successful production and financial plan requires a solid framework for evaluating decisions. The one that we have found that closely matches how we have been evaluating and building strategies at Pattison Farms is the Lean Principles. This is a framework developed by Taiichi Ohno at Toyota in the 1970’s which has led them to be the worlds largest car manufacturer. These principles are now being across many industries and closely match how we have approached evaluating changes we have made at Pattison Farms. 

The starting point and encompassing set of actions for this framework is a 5 step process called Clean and Shine or 5S. These steps are:

  1. sort and simplify - there is a cost to keeping things which are not used and are not adding value.
  2. set in order - every tool has its best place and is always returned after each use.
  3. shine - clean as you go and make it part of the process.
  4. standardize - build in consistency into each work process
  5. sustain - build these values into the farm culture.

Lean Principles

  1. precisely specify value - interview and listen to your customers about what really gets them excited. This is not fixed, it changes and is different for each customer and requires continuous dialogue.
  2. find the value stream - map out each of your product processes and trace the value being added to each product as it moves from planning to bank deposit. This can be different for each customer type and will be a mix of products and services.
  3. create flow - eliminate waste
    • 3 types of farm activities
      • actions that add value - maximize these activities
      • actions that do not add value but are necessary
      • pure wasteful actions - eliminate
  4. sell through pull, not push - product exactly what your customers want, in the volume they want, when they want it. 
    • Prices that pull, prices that push
      • wrong approach:
        • selling price = profit + actual cost
        • this makes customer and not producer responsible for every cost
      • right approach:
        • customer and grower agree on a price based on market realities
        • agreeable prices give your products plenty of pull
      • prices that undercut market value push products
      • this is a harsh practice that does not create a sustainable system
  5. Aim for perfection - build in a culture of continuous improvement.
    • lean can be used to keep farms small and viable as you are always focused on efficiency and full utilization before expansion
    • lean is respecting all aspects of the process
  6. Respect for all people and environment
    • Harness the wisdom of the farm by empowering ever worker to be responsible for their understanding of each task and identifying continuous improvement 
    • includes the joy, creativity and passion all staff bring to the process.
    • lean process encourages a more pleasant place to practice the craft of farming so all are able to do their best work.