Published on: 16:34PM Jul 22, 2008
When you get down to it, agriculture is about processing. Grain farmers use the land to process seed into bushels of grain. Dairy farms utilize the cow to process feed into milk. The oilseed crusher squeezes a seed to extract the oil. A biofuel plant uses a vat to convert a feedstock into fuel. These are just a few examples but when you look around much of agriculture is about processing.
Managing a processing operation requires keeping track of a significant number of important factors. Having a system in place to track the most important factors is essential to sustained profitability.
The first step, and many times the hardest step, is identifying what is the vital information that drives profitability. Sitting down and thinking through the business process takes time and for many it is time that can easily be spent on other things. Planning is the easiest thing to put off and at the same time the most important thing an organization can do. Planning determines the direction a business is headed.
Here is an example of how to start a plan. Corn farmer Greg senses that a yield improvement plan will improve profitability. The first step in his yield improvement plan is to identify areas that are potentially limiting his corn yield. By making a list of the top 5 limiting factors, Greg has made a big step in the right direction toward improving his process.
My guess is that you instinctively know already many of the key profit drivers in your business. Do you have a profit planning process to address these factors? Have you spent the time to identify the information that is needed to start a process of improvement? A little time discussing and starting a written plan can do wonders for your organization.
To run a successful processing operation there must be a culture of constant improvement and a written plan. Planning out your actions insures that your next steps are in the right direction. There is no better time to start your plan than right now!