LMJ goes down country to explore how car industry technology has revolutionised Synlait Farms, the New Zealand dairy consortium is transforming the way it does business by adapting lean principles to the agricultural sector and has become a world first.
With 14 dairy farms spread over nearly 4,000ha, some 13,000 cows and 85 employees, you might expect things at mid-Canterbury’s Synlait Farms to be chaotic.
But a look around its farm buildings hints that this operation is a clean, lean, milk production machine. Even the implement sheds are a picture of orderliness and calm, “with a place for everything and everything in its place,” says Synlait Farms’ Continuous Improvement Leader, Niranjala Gamlath.
The tidy tool boards are a visual marker of how this multi-farm dairy business has been revolutionised by the slick, well-designed processes and systems used in the Japanese car industry.
Lean management principles, which focus on adding value and eliminating waste, have transformed the company’s approach since it created its own version of them in early 2012.
Synlait co-founder and CEO says the company, which made its first dairy conversion in 2001, was confident that it had the basics right, but wanted an extra challenge to focus and continually improve its processes. Adopting a set of business principles more commonly used in manufacturing – and that had never before been used in a dairy farming operation – shows just how far they were prepared to go.
“Our vision for Synlait Farms is to be the best multi-farm business in the world,” Maclean says. “We have to remain innovative.”
The company launched its tailor-made set of Lean principles – taking into account the numerous components (especially the human and animal ones) and the variable factors of weather and climate – in February 2012.
InSynC (derived from innovation, Synlait and continuous improvement) has six goals – reducing waste, engaging the team, developing an innovative culture, adding value for customers, taking care of every individual and the environment, and enhancing work and financial performance.
GETTING THE TEAM ONBOARD
The success of any business relies on its employees – and Synlait reports team engagement has been one of the easiest criteria to meet so far.
Particular emphasis has been put on developing an innovative culture among team members and Gamlath says there is much higher team engagement as a result.
“We think that all team members should be coming up with ideas around improving processes, like say, milking or around smaller processes like treating a mastitis cow. It can be a really simple process or a really big one.”
Gamlath says there is plenty of potential for individuals to see where improvements can be made, where problems are and how they can be overcome.
While Synlait Farms has a traditional corporate ‘top down’ approach where the senior leadership team sets goals for the company, it also has an equal ‘bottom-up’ approach with strong input from all team members.
“InSynC has been very good for that,” Gamlath says. “When we try to get the bottom to top approach we are focused on creating a learning environment and then creating lots of engagement.
“For example we have a once-a-month InSynC show day where all the team members from the 14 farms are invited.
“So they get to learn special things regularly. They get the chance to give their ideas to improve processes as well as copy others’ ideas. It’s a very systematic approach, respecting each other’s ideas.”
Each farm has an external audit each month with the aim of getting all farms up to a similar level of excellence.
“We want to achieve the best practice across all the farms. Now, all the team members end up following the same procedure, which was finalised as the best practice,” Gamlath says.
The creation of Standard Operating Procedures for all on-farm tasks has also included plans for safety and the environment.
The ‘6S tool’, in which the Ss refer to Safety (safety first), Sort (the proper removal of rubbish), Set It In Order (hence the tidy tool boards), Shine, Standardised and Sustain, is applied to every aspect of the business, both on farm and in the office.
“6S is a systematic approach to organising the work place,” Gamlath says. “Having developed an uncluttered work place with the help of first two Ss, we implement the third S, Set It In Order. Everything should be easy to find, easy to use, easy to return and easy to tell when it’s missing.”
Identifying ‘waste’ – overproduction (excess grass), motion (time wasted looking for things), waiting, inadequate processes, transport, defects and storage – has also streamlined processes. Employees are encouraged to focus on no cost or low cost ways to make improvements.
Synlait sees adopting Lean principles as a continuous journey, with incremental improvements happening on a daily basis. Gamlath says it is making a difference across the business.
Regular 6S audits across the 14 farms means the company can clearly identify areas that need improvement and work out which farms need assistance in what areas.
As a result of implementing the 6S principles in milking sheds, Synlait estimates that it is now saving 15 minutes per employee per day. That might not sound like much, until you multiply it out across 80+ people all saving 58 hours each a year. That increased productivity is equivalent to employing an additional 2.5 extra team members, which would have cost around $90,000 (£46,000) if they were to achieve these gains pre InSynC.