The afternoon session of day 5 of the TEPAP conference was presented by Brent Gloy of Purdue University on improving profitability through process improvement.
On process improvement, it is important to understand that it is difficult to manage output, whereas is very possible to manage inputs. Farmers need to determine and manage the factors that cause our expected output to deviate from the optimal.
Remember that you can not manage what you can not measure. There are two causes of variation. Common cause variation is naturally occurring variation inherent in systems. You will usually not be able to manage this totally. Special cause variation is caused by a specific event related to the process. This is what a farmer must manage. It is hard to understand the common cause variation without removing the special cause variation first.
Summary observations are as follows:
- It can be easy to get overwhelmed or too far into the trees
- It is easy to pick too big of a project – keep it small
- Done right will take some time
- It is critical to have employee buy-in
- Don’t be afraid of the obvious
- Look for unintended consequences
- Find creative ways to incentivize performance
Almost every process on the farm can have both common and special variation and more than we can reduce and eliminate special variation, the better your farm operation will be.
NOV. Beef and PORK exports very strong- HOGS and Cattle lower AFTER posting NEW contract highs
EHedger Closing Grain Commentary 1/13/11