The extended economic stress in the dairy industry has farm managers taking a close look at all aspects of their operations to find areas to decrease costs, increase productivity and, ultimately, improve profitability.
Laura Moser
Freelance Writer
Laura Moser is an agricultural freelance writer based in Michigan.

In an effort to help dairy farmers pinpoint those areas where improved efficiencies may contribute to improved profitability, Michigan State University Extension educator Phil Durst uses the Lean management philosophy.

Implemented by Toyota Manufacturing in the 1980s, the automobile manufacturer developed Lean concepts as a means to cut costs and increase output to improve competitiveness against other established car companies.

Understanding Lean

At its core, the Lean concept is about identifying and reducing inefficiencies and building on trust and involvement with employees. While most of the Lean concepts can be applied to dairy farming, Durst chose to focus on three particular core concepts dairy farmers can embrace and use:

  • Reduce waste
  • Root cause analysis
  • Continuous quality improvement

Together, these three areas, along with employee commitment, can be used as a road map to improvements in all areas on the dairy farm.

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Setting the stage

At the core of the Lean philosophy is a one-team approach to success. Breaking down barriers between different processes and teams is critical to successful implementation of any new management approach. Because Lean looks at how each process in the operation works and, more importantly, how it impacts other processes throughout the cycle, operations with independent “silos” will not reap the full benefits of the Lean concept.

Identifying the “customer” or the one who benefits from the process is also critical to implementing the Lean concept. While each process can have a specific customer, when looking at a dairy operation overall, the cow is the customer because the cow is impacted directly by operation processes and has the most influence on the farm’s profitability. Therefore, when implementing this management approach, it is best to identify inefficiencies through the impact they have on the cow’s productivity.

Reducing waste

Analyzing waste on a dairy farm generally includes anything that is not of value or asset to the farm, or that is held in excess. Waste can be measured by inefficiencies, losses or unproductivity. These can be identified in animal performance, processes, inputs and management structure.

According to Durst, waste can be measured in the following areas:

  • Animals: Sick animals, premature deaths, low-producing animals, poor growth rates

  • Processes: Wasted time, wrong process sequence, wasted motion or unneeded repetition

  • Inputs: Feed shrink, overfed nutrients, unnecessary medications

  • Management structure: Redundant responsibilities, lack of identified leader (too many bosses), failure to communicate

Identifying waste is often illustrated in wasted time or unproductive investments. Employee time spent on unnecessary tasks or duplicated by one or more employees is time that could be better used taking care of the customers – the cows.

Because most tasks on the dairy are automated at some level, evaluating fuel and energy costs are one way to identify wasted time. Many times small changes, when multiplied over the course of a year, result in big savings.

For instance, Durst points out reducing the time an employee takes to feed cows by five minutes per feeding results in a time savings of 61 hours (on 2X feeding) or 2.5 days a year. Is there a way to reduce five minutes of feeding time without changing quality or performance? The point is not to make them move faster but to eliminate wasted movements or excessive distance between tasks. This can be revealed by watching the process your employees are using. Is there redundancy of actions? Are they using the best traffic pattern or route?

When looking at waste reduction, it is best measured in cost savings. When evaluating waste in cow health and productivity, often the cost savings is realized in multiple areas: health costs, cow replacement, low productivity, etc.

Finding the big rocks of waste are often the first step, but uncovering the incremental, small areas can also add up to big economic impacts.

Root cause analysis

Farmers, by nature, are problem-solvers and are adept at using creativity to fix what is broken. Digging deeper, past the solution to the cause of the problem, will help prevent the problem from arising again, ultimately reducing costs. Learning to ask “Why this is happening?” rather than “How do I fix this?” is a mindset that will help prevent problems long term.

Durst suggests using this approach whenever problems arise, asking questions like, “Why do we have so many lame cows?” instead of “What is the best treatment for lameness?” or “Why do we have so many cows with mastitis at freshening?” instead of “How do we treat mastitis?”

Likewise, this approach can be used when dealing with employees who may not follow protocols or are underperforming. Asking “Why are employees late?” instead of “What should their discipline be?” or “Why do the employees fail to follow the proper milking process?” Dairy farmers who use the “why” approach can often find barriers to employee performance that prevent other employees from executing processes as they should be. Common barriers include unclear direction from supervisors (or conflicting direction from multiple supervisors), language, lack of resources or lack of training.

Supervisors should use the “why” approach in training to help employees understand why they do something and how it impacts other processes and the entire farm. Understanding the “ripple” effect of a process can help employees see the value of their work and how it can positively or negatively impact their coworkers.

Continuous improvement

Adopting the Lean management approach is more than a one-time observation and improvement of processes and procedures. To be most effective, it should become an inherent process at all team meetings and when discussing management practices and improvements. To monitor effectiveness, it requires metrics and analytics to determine real costs, the impact to the customer (cow) and how it affects the overall effectiveness of the farm. Look at the impact from the customer (cow’s) perspective, monitoring areas such as milk production, mortality, conception rates, heifer growth, etc.

Lean is not about farmers doing more with less but rather about getting everybody involved to determine how processes can be improved to become more effective in producing a great product.  end mark

Contact Phil Durst for more information on incorporating the Lean management approach on your dairy.

Laura Moser is a freelance writer from Holt, Michigan.