A visit to a lean farm
WOMACK'S YOKOTEN – Lean in agriculture may still be in its infancy, but there is a small farm in Indiana that is already proving how valuable lean principles and techniques can be for this industry.
Taiichi Ohno, the architect of the Toyota Production System, had a problem with farmers. In his essay “Farmers like inventory,” published in his book “Workplace Management,” Ohno notes that farmers invented inventories. The hunters who roamed the Earth before agriculture practiced pull production: when they were hungry, they pulled an animal from the forest or the swamp and ate it with some fruit picked from a bush or tree for dessert. Farmers, by contrast, with the annual harvest cycle and living at such densities that hunting alone could no longer support them, needed to store enough food to get through the year and even more to cope with bad harvests. The birth of inventories.
Even worse, farmers tend to produce as much as possible during good years (a form of overproduction) to keep their workers and equipment busy, and then store it for future sales, because a good harvest always causes prices to fall. As a result, inventories and overproduction came to be seen as good things. Part of Ohno's life's work was to find a countermeasure to the ancient farmer's urge, present in our minds, to create excessive inventories in every human activity, no matter how far removed from the farm.
But agriculture was not so bad from a lean perspective: I remember visiting Honda's Marysville complex in Ohio during the hiring phase in the early 1980s and hearing that farmers were the ideal people to hire as production associates because “cows have to be milked every day, and farmers needed to fix their tools in real time to keep the farm running.” So moving farmers into factories – which also happened at Toyota in the early days – seemed like a win-win situation: workers with the right attitudes and skills who were no longer needed on farms (where farm employment fell from 41% of total jobs in the United States in 1900 to 2% in 2015) could work in lean manufacturing and, later, in lean services.
The combination of the declining farm workforce and the inherent inventory requirements of large crops harvested in annual batches on modern mass-production farms far from customers made me think there was not much room for lean thinking in agriculture. . So I gave no further thought to agriculture until a copy of Ben Hartman's book “The Lean Farm” appeared in my mailbox this spring.
Ben and his wife, Rachel, are the kind of people I love to meet: they are self-taught experimenters who talked to a few people, read a few books and then applied lean thinking (breaking new ground, so to speak) on their small vegetable farm near Goshen, Indiana. I recently rented an extended-cab pickup truck (the most American, most farmer-like and most energy-hungry vehicle there is) and drove from the Detroit airport to see the lean farm in action.
When I examine experiments with something new, I always start with the purpose. In this case, “what problem with traditional farming were they trying to solve by applying lean principles?” The answer was that, after generations of hard farming on nearby family farms, Ben and Rachel wanted to try a new approach that would provide a better work/life balance while still reaching a financial goal and being better for customers, including the planet. They were looking for a combination of high-quality fresh produce at a reasonable cost with minimal use of fertilizers, pesticides and fossil fuels. So they started a small (seven-acre) vegetable farm that sold directly to a few gourmet restaurants and to local customers in nearby towns through a Community Supported Agriculture (CSA) program, which signed customers up for a year of deliveries of boxes of produce directly to their homes.
The problem was that the work was very hard. Using conventional small-farm methods, sixty hours a week were needed to get the farm going. Since they were thinking about starting a family, it was hard to see how everything could get done on the farm while leaving some free time for the family and money for other needs.
Fortunately, one of their CSA customers had a manufacturing business nearby and said he had transformed it by applying lean principles to create more value at lower cost. Why not apply those ideas to farming? But, of course, there were no books on lean farming and no fancy consultants to give advice. So the lean farm would have to be born in the old, independent farmer's way: through experiments.
These experiments were initially inspired by Ohno's seven wastes, including, of course, overproduction, excess motion and excess transportation. An examination of the farmer's movements and of the flow of products, from seed to shipping, immediately showed that much of the farm's “work” was actually waste – searching for tools and supplies, walking long distances because of a poor layout, “reworking” crops that had been poorly planted, overproduction due to inadequate communication with customers about which items they wanted and when.
In addition, intense discussions with customers showed that they wanted more than good products. They wanted to be directly involved with their supplier in deciding what types of produce should be planted and how they should be delivered, at what time and in what form. They even wanted to discuss recipes and suggested that the farmer give cooking tips and introduce unfamiliar items. In short, they wanted goods plus services developed collaboratively to solve their food problems, not just whatever vegetables turned up in the market at the lowest price from unknown sellers.
With clarity about purpose and value, Ben and Rachel are on a multi-year journey to apply lean principles to every aspect of their production and to everyone who works with them on the farm. They have pioneered “market-ready harvesting” to minimize handling between the field and the customer, right-sized tools with quick changeovers to minimize the quantity and cost of the material needed, the “seed kanban” to always have the necessary planting material without tying up cash in inventory, the “plot kanban” to know immediately when a plot of land is ready for a new crop and exactly what to plant, quick plot changeovers so that the new crop goes in the same day the old one comes out, and “heijunka planning” to distribute the farm work evenly across the twelve months of the growing season, eliminate idle assets (waste) and prevent the seasonal mura and muri of the traditional farm as well.
I will leave the full details to Ben's book, which I believe you will find fascinating whatever industry you are in. But a few counterintuitive practices are important to share:
• Given their purpose of a good lifestyle with an adequate income, they have continually reduced the size of their farm as productivity grows, from seven acres to one and a half acres of cropland, while increasing their net profit target. And in the summer – when home gardens and big farmers bring their crops to market and drive prices down – they go camping (and write books) while running at full speed the other nine months in their heated greenhouses. Why is it that everyone else trying to transform a business using lean methods seems to think that dramatic growth and ever-increasing wealth are the only measures of success?
• As they look ahead, one of the biggest remaining wastes is the waste of transportation. Their customers are concentrated in two small towns a few kilometers from the farm, requiring long trips (although the distances from field to table are much shorter than for many vegetables today). So why not move their half-acre farm to a spot between these adjacent towns and minimize transportation time and cost? Truly local food!
Let's get this straight: Ben and Rachel (assisted by Shingo, the guard dog) are having a good life with their family with a good work/life balance, growing vegetables 365 days a year (with the help of student labor from a nearby college in the summer so they can travel) on half an acre of land. They use little outside energy (mostly for heating the greenhouse in winter), with no chemical fertilizers or pesticides. And they have drastically reduced the waste of shrinkage and overproduction compared with big-farm-to-big-market production, distribution and retail (where up to 20 percent of the annual planting is not even harvested due to miscalculations of market demand). Why aren't all vegetables grown this way?
Perhaps in the future they will be. Certainly, lean thinking has established a frontier in agriculture for the first time. And I hope thousands of small farmers will copy (and improve on) Ben and Rachel's methods. But what about big mass-production agriculture? To me, it is like the auto industry in 1965, with high barriers to entry, lax safety standards and minimal environmental requirements. A lean leap in agriculture that minimizes energy and water requirements (and CO2 and methane emissions) while providing freshness and variety currently unavailable at the same or lower cost to the consumer seems hard to imagine now. But it was also hard to imagine the triumph of Toyota and lean thinking in the year before the Corolla was launched.
