There are very few actions on the farm that actually generate value.
What are people actually paying you to do?
How is value created on your farm?
How does value flow through your farm business?
Given the nearly infinite number of farm tasks you could be working on, it is essential that you prioritize your time and energy so that you maximize value creation and flow through the farm business system.
There are 2 frameworks I would like to draw upon today to examine this question: LEAN manufacturing (the Toyota Production System), and Holistic Management.
According to the LEAN approach, value is purely defined as what the client is willing to pay for. Through this lens, we see that there are certain critical moments when value is created in the farm system. If we take a seed and grow it into a carrot, we have added value. Someone would theoretically be willing to come and harvest the carrot and pay you more than you would get if you just sold the seed. If you actually harvest and wash that carrot, you once again add value. You can sell a harvested and washed carrot for more than you can sell a u-pick carrot in the field. Finally, if you actually go to market with that carrot, you will once again be able to charge more, which is the indicator that value has been added.
Anything other than planting, harvesting, and marketing is waste. Some of this waste is a necessary waste (which we seek to minimize) and some of this waste is pure waste (which we seek to eliminate). But either way, it remains waste (Muda in Japanese). For example, while irrigation is essential to growing a successful crop, no one is actually paying you to irrigate. Irrigation is a form of waste… necessary waste, but waste never the less.
This concept maps on well to the 3-link Value Chain from Holistic Management. In this framework the 3 links are:
- The conversion of CO2 into plant matter via photosynthesis;
- The conversion of plant matter into a marketable product via harvest, washing, etc;
- The conversion of the marketable product into money via sale.
At any given point in time, there is a single one of these links that is the weak link. Are you able to sell everything you currently produce via your marketing outlets… or could you sell more if you had more? If you increased production by 50%, what would be the limiting factor: harvest or marketing?
Of course, all these elements are interlinked, but it is important to make sure you are aware of and addressing the weak link in your system, your efforts on other elements are not as effective!
Which link is currently the weak link on your farm?
What actions are necessary to remove that bottleneck?
Once that is addressed, what weak link do you see coming down the pipe?