1. Introduction
It is necessary to adapt modern production management systems applied to high-tech industries, such as automotive and electronics, to those others that, although they incorporate new technologies every day, as well as scientific advances, have not changed. its forms of management both in the productive, commercial and financial framework.
In this case, we are talking about food-producing activities, as well as flowers and other products used later by the industry.
These types of activities, always attached to a high degree of traditionalism and subject in many cases to ancient myths and paradigms, must be the object of analysis and research in order to achieve a higher level of productivity. Faced with a world that constantly requires a greater quantity of food and raw materials, and in many cases pressured both by high costs and by greater demands from both customers and consumers, companies must review the concepts and paradigms under the which have been operating, to adapt them to new needs.
2. Applying Kaizen
Kaizen as a system of continuous improvement is perfectly applicable to any activity, although of course, making the necessary adjustments based on such activities and the social - cultural and economic environment in which the company operates.
Better products, generated in the most efficient way, with a low cost and delivered on time and according to the needs and demands of the consumer, are valid both when producing refrigerators or cars, as well as when generating products as varied as legumes, eggs, milk, meat, wool, honey, wax, flowers, dates, figs, vegetables or cotton.
Each activity has to satisfy the needs of the client as well as the consumer, avoiding and eliminating waste and waste as much as possible.
In the first place, when applying Kaizen to these activities, it is necessary to take perfectly into account its philosophical principles consisting of the search for the highest quality and in the most efficient way, always focusing on simplicity in solutions, promoting work group, and putting a great effort in prevention. This search is continuous, which implies generating a work ethic and discipline conducive to continuous improvement.
This continuous improvement does not merely pursue economic and financial results for the company, but to fully satisfy consumers, improve the quality and satisfaction of the work of both the operators and their managers, also creating the bases to be able to compete in current and future markets.
3. What should we do?
1. Make managers aware of the need for change. The evolution of markets and technology, and the essential updating of business management methods.
2. Carry out a diagnosis that allows to know in depth the operations of the company, putting special emphasis on its critical points, which are those that generate both profits and losses. This should be done not only by contemplating the production processes, but by paying great attention to aspects related to the social and cultural environment, both external and internal to the company. Discovering the myths and paradigms of its employees, managers and owners leads to knowing to what extent they hinder the development of the company, on the other hand they have to serve to take them into consideration for the purposes of awareness-raising. This diagnostic work involves statistical surveys and calculations of different ratios, indices and indicators. Among them is present the quality levels,management indicators and productivity ratios, as well as the amounts of waste.
Inventory the existing human resources, and proceed to compare them with the needs in terms of experiences, capacities and aptitudes that are required for the present and future of the activities.
Analysis of the activities and strategic costs, and on the other hand the classification of the activities according to whether or not they generate added value for external customers or the company, or do not produce any added value.
Strategic activities and costs are those that, given a certain level of production, the increase in these costs generates a more than proportional reduction in total costs.
Regarding the activities with or without added value, their classification and subsequent analysis leads to the elimination, combination or simplification of the same in order to improve the profitability and competitiveness of the company.
3. To improve, we must first know where we are and how we are evolving in our daily operations. For this, basic statistical systems are trained and implemented, both to control quality levels and to closely monitor productivity and cost levels.
Implement the Dashboard as a form of control and guidance. The most convenient thing is that this Dashboard provides information by exception and serves for Visual Management, which allows a “screenshot” to know the status of processes, products and services.
4. Train, train, and jointly implement the appropriate kaizen systems for each activity:
- Based on the requirements of customers, consumers and public bodies, establish quality requirements, both for the product and its packaging, and response times to orders. This in terms of what is called external clients, but the same must be done in relation to the needs of internal clients. Once such quality requirements have been established, the Total Quality Management (TQM) most appropriate to the company. For this, it is essential (see Point 3) to have quality statistics and their evolution, the most appropriate element being the application of the SPC (Statistical Process Control).In an economy such as these times, waste should be avoided, and the best way to achieve this is by applying the Just in Time Production System,which can be considered as the other side of the Kaizen coin. Adapting "Just in Time" to each type of activity is essential and fundamental when it comes to responding quickly, flexibly, effectively and efficiently to the changing needs and requirements of the market. Having machines in perfect working order is essential and For this, the best thing is to apply Total Productive Maintenance, which not only allows to reduce downtime due to breakdowns, but also to save supplies and energy, avoid the production of failures, and non-compliance with deadlines. Cold rooms, milking machines, harvesting machines, transport and especially transport with cold rooms, ventilation systems in chicken coops, irrigation systems are just some of the machines to follow closely if we do not want to incur losses,and for this the best thing is to apply prevention and prediction systems, improving maintenance costs and avoiding having to act by reaction.
In terms of agricultural, forestry and livestock activities, not only the productive maintenance of equipment, machines and facilities is important, but also that of those factors proper and unique to the activity such as soils (MPSP - Productive Maintenance of Soils and Pastures), the Productive Maintenance of Animals (MPAn) such as laying hens, dairy cows, breeding animals among others), and the Productive Maintenance of Trees (MPAr) both of those used for the production of fruits, as well as seeds, leaves or intended for later cutting or used for animal shade or to cut the wind).
In the case of the MPAn we have to take into consideration aspects such as its cleaning, vaccination, veterinary controls and biochemical analyzes among others, on a regular and systematic basis. A software designed for this purpose allows monitoring of vaccination per animal, in addition to having electronic files for each of them regarding production evolution, disease monitoring and results of the examinations to which they were subjected.
- Taking into account the knowledge and experiences that employees and workers add day by day leads to the implementation of suggestion systems and quality circles. Involving employees is ensuring their commitment. And for this, they must be taught the different tools in terms of quality and productivity management. Proceed to the calculation and analysis of the evolution in productivity indices, be they single or multifactorial. In this way, the total produced per gallon of fuel, the production per man hour, or the tons obtained for each monetary unit of total cost incurred (sum of labor + amortization / depreciation + inputs (seeds + fertilizers + fertilizers) can be calculated. + energy and fuels + fees (veterinarians + agronomists + others)).
5. Standardize processes, thus implying the use of the SPC for both quality and management indicators. This should be added to the Dashboard, and used for the subsequent application of Deming's Circle (Plan-Perform-Evaluate-Act).
6. Implement the Five “S” System from the first moment, which allows the saving of physical spaces, saves supplies, avoids accidents and loss of tools and instruments, allows to detect problems in machines and equipment in time, and even avoids transmission of diseases both in workers, as in plants and animals. Example: a cleaning plan in the activities under study would be the cleaning of pens, the sector and the milking machine, cleaning the field of weeds, among others.
7. All systems and working methods are aimed not only at satisfying customers and consumers, but also at detecting, eliminating and preventing the generation of waste. Issues or aspects such as excess supplies, overproduction, lost time due to lack of supplies or damaged machines, harvests before or after time, packaging errors, programming failures, are just some of the serious shortcomings that they cause waste (dumb in Japanese) in the activities analyzed. Thus, each type of flower or fruit has its time or moment of harvest so that it reaches the final consumer or factory in the most optimal conditions of use or consumption.
8. Tools and / or software for: budget control (especially the budget for expenses and expenses), management control, maintenance, visual management, the dashboard, the SCP, the Pareto analysis and horizontal accounting allow (within a design and use consistent with the Kaizen philosophy) very important savings, which can easily reach 30% of the invoiced value for those companies considered traditional.
In the case of the budget for expenses and expenditures, the application of the Zero Base Budget is essential, also giving rise to the implementation of both the Cost Reduction Matrix and the Target Cost system.
The Cost Reduction Matrix consists of a series of columns destined to the different types of methods that can be used to increase productivity and consequent cost reduction that can be applied to the specific agricultural activity, and on the other hand rows, destined the latter to the different activities and processes involved in the exploitation. In this way, we proceed to analyze which methods may be applicable and their effects on the final costs, choosing the combination of methodologies that maximize the profitability of the exploitation.
9. In agricultural activities it is possible and necessary to apply both the methods intended for the rapid change of tools and the rapid preparation times of all those machines and tools used. However, applied to agricultural activity, the quick preparation times can be focused on preparing the land for sowing after the harvest is finished.
10. Within the framework of quality and prevention, it is essential to generate methods aimed at avoiding failures and errors, for which Negative Analysis, as well as the subsequent creation or adoption, and subsequent implementation of Poka- systems or tools are very useful. yoke. The question is to start thinking about everything that can go wrong and think consequently about implementing methodologies to avoid its occurrence or to generate it to minimize its negative consequences.
4. Conclusions
Although agricultural activities are subject to environmental factors, some can be generated under artificial environmental conditions. Beyond the characteristics that are its own and that largely escape the possibility of control by the owners and managers, it is no less true that the application of better production management methods will make it possible to take full advantage of positive conditions, minimizing losses in the event of negative factors. The ultimate goal is then to achieve the highest average profit in the medium and long term.
On the other hand, not only do you count the financial results for kaizen, but and above all things the improvement in the quality of work life, which leads to fewer internal crises, greater group harmony and better teamwork, everything which ends up resulting in higher and more consistent levels of benefits and returns.
Each product generated by the farm requires special characteristics in terms of quality, sizes, presentations, tastes, consistencies, and hygiene among many others. It is the responsibility of the company to detect which ones they are, proceeding to determine the degree of compliance with such expectations. It is also essential to fulfill orders in the stipulated times and at the lowest possible cost. As in other economic activities, the agricultural company does not have the possibility of determining its price policy, but prices are given by the market, for this reason reducing costs and eliminating waste is essential when it comes to improving profit margins.
5. Annex 1 - Steps for the implementation of Kaizen
1) Awareness. Owners and managers must be made aware of the need for change and its motives or reasons, and the advisability of applying a systematic approach to its implementation.
2) Diagnosis. Analyze the characteristics of the company, as well as its framework and social, cultural, economic, technological and competitive environment. Systematically evaluate the levels of productivity, quality, satisfaction levels and response times. Review hidden costs and levels of waste.
3) Planning. Based on the conclusions of the previous stage and depending on the capabilities and restrictions of the company, as well as the strategic and political objectives, set a development of activities and their execution deadlines in order to achieve the results set as objectives.
4) Implantation. Proceed with the implementation of the previously planned activities, developing a training and training plan with immediate implementation for the purposes of effective feedback; application of statistical control systems and information systems by exception and visual management (dashboards, statistical process control, management and budget control).
5) Evaluation of results. Measure the results obtained as results of the changes and applications made, comparing them with the established objectives.
6) System correction. As a result of the difference in results or application difficulties, or as a result of new conditions or changes in the environment that motivate the appearance of new opportunities and threats or the existence of new strengths and / or weaknesses, proceed to readjust the or production systems.
- Clarification: training and application in the implementation stage, involves all the concepts involved in Kaizen, such as: the detection, prevention and elimination of molts; total productive maintenance, total quality management, statistical process control, quality management tools, teamwork, cell work, the kanban system, among others.
6. Annex 2 - Twenty-four points to improve profitability
1. Correct the root cause and not the symptoms. Whatever problem arises, focus your efforts and energy on detecting and correcting the root cause of it, avoiding momentarily eliminating only the symptoms. Acting on the symptoms implies that sooner or later the problem will reappear, with the need to repeat expenditures for its correction.
2. When purchasing supplies do not think about the price but about the total cost. It is of no use to acquire lower priced inputs if for this we must renounce quality, acquire large quantities and not be sure of the delivery date.
3. Acquire the most suitable inputs and components for the type of soil, climate and machines. Do not try to make use of generic inputs, try to make them the most suitable for the surrounding conditions.
4. Constantly seek the greatest versatility in your operators. It is not only important to have a good driver, but also the ability that he has to do basic maintenance and repairs. In this way, you will avoid stoppages due to breakdowns and reduce the need for an excessive number of workers.
5. Enrich the tasks. That the tractor driver knows and can handle a seeder as well as a combine.
6. Apply outsourcing in all those activities and tasks that is possible, and this implies cost savings.
7. Earn preferences through uniform, clean and well-packaged products. Be they tomatoes, grapes, apples, eggs, honey or any other product, which are all the same size, taste, color and characteristics. Select the products properly based on their characteristics.
8. Select the best time for harvest so that the product reaches the market and consumers optimally.
9. Systematically implement productive and preventive maintenance of machines, equipment, facilities, sheds, soils, pastures, trees, and animals. Taking care of the assets allows lower maintenance costs, lower expenses for repairs, less downtime for repairs, avoids the degradation of your most important assets, which are the quality of the soil and the animals. Avoid thinking: "If it's not broken, don't touch."
10. Stay alert to both technological changes and new varieties of inputs and products. If the market demands a new type of fruit, please the consumer. Try to incorporate innovations that give greater added value to your products, if possible. Examples of the latter are a new combination of foods for poultry that changes the taste of their meats or makes their eggs healthier. I brought in new crops and you will get new types of honey.
11. Reduce costs by reallocating resources to activities with higher levels of productivity and added value.
12. Diversify production to avoid market and climate traps. I generated productions that allow you to generate a secure income whatever the conditions (except natural disasters to which even industrial activity is not unrelated, such as floods). If you have apple production and some of them are not suitable for placing on the market, use them as pig feed.
13. Implement the Dashboard, statistics, Management Control and Budget. Stop relying on your notebooks and your memory, incorporate an efficient information system for control, analysis and decision making.
14. Bring your production to the point where marginal costs equal marginal revenue. Many are unaware of the basic principles of microeconomics, taking their production levels above the optimum for profitability and profits.
15. Acquire or incorporate machines and equipment according to the size of the farm and environmental conditions. Avoid diseconomies of scale, and incorporate machines and equipment suitable for the type of farm and soil and climate conditions.
16. Apply preventive measures to avoid workplace accidents. Improving occupational safety will end up generating higher productivity and with it lower production costs, and a greater commitment on the part of the operators.
17. Don't admit any quality to your products, focus on generating the highest quality possible. Don't settle for just producing more olives or plums or melons. Try that they have the best size, flavor and presentation.
18. Make your company an optimal place to work and develop on a professional and human level. It is produced more and better when people feel comfortable in their daily activities.
19. Incorporate continuous planning into your management activities. Always remember that: "he who does not plan, plans for disaster."
20. Always keep in mind that training is not an expense but an investment. Who does not invest in training is consuming their future. The advance both in terms of commercialization, as well as the continuous incorporation of new technologies and biotechnologies (global positioning systems -GPS- in the harvesters, inoculants for soybeans, new types of seeds, satellite images and fertilizers among others) make it necessary the qualification and training of both operators and managers. No less important has been the incorporation of new financial products such as futures and options for agri-food products, and new products or services in the field of insurance.
21. Logistics also count. The storage and transport of the production is as important as the production itself. It will be useless to generate the best roses if, due to a storage and / or transport problem, they arrive in terrible condition on the market.
22. Keep order and reap results. The application of the Five "S" in any agricultural activity gives optimal results.
23. Always find and select the simplest solution or methodology, and not the most complex.
24. Analyze the fulfillment of the twenty-three points above, and then plan its implementation according to an order of priorities.
Make a list of these twenty-four points and then tick them off, verifying how well you are committed to the results of your agricultural business.
7. Annex 3 - In search of the simplest and most effective solution
Kaizen seeks simple but powerful solutions. What is important is the understanding of the system or systems and their respective processes, being very clear about the importance of statistics to know the behavior of the processes and their evolution over time.
Kaizen as a continuous improvement system also implies continuous innovation of both products and processes. Generating new and powerful perspectives, approaches and points of view is the great secret of Kaizen. From this, ideas as simple and novel have emerged as kanban, poka-yoke, andon, and the Five "S" among many others. Very simple ideas but without a doubt very powerful. And despite that simplicity, they were difficult to copy by Western companies, muddled in complex equations and sophisticated software that never delivered the promised results.
The simplest is often the most difficult to understand, precisely because the simplest requires more abstraction. Kaizen is the constant search for greater abstraction applied to business management.
Thus, while the majority of management systems make complexity their point of support, for Kaizen the fundamental thing is to find simplicity in the forms and processes that make the various movements and activities more fluid and precise.
8. Bibliography
Economics of the agricultural and food business - Enrique Ballestero - Ediciones Mundi Prensa - 1991
Introduction to the Analysis of Agricultural Economics - Bishop and Toussaint - Editorial Limusa - 1975
The efficient company - Eduardo Arbones Malisani - Editorial Alfaomega Marcombo - 1999
Economy & Management of two Agrifood Businesses - Decio Zylbersztajn and Marcos Fava Neves - Pioneer –2000
Kaizen applied to agricultural activity - Mauricio Lefcovich - www.gestiopolis.com - 2004
Inverse Analysis - Mauricio Lefcovich - www.winred.com - 2005
Negative Analysis - Mauricio Lefcovich - www.gestiopolis.com - 2006
Cost Reduction Matrix - Mauricio Lefcovich - www.gestiopolis.com - 2005
Cost reduction by assigning productivity to costs - Mauricio Lefcovich - www.ilustrados.com - 2005
Date of realization: December - 2006
