Case Study: Quality and Productivity Powering Profitability
In the world of agribusiness, long-term sustainability hinges on two crucial factors: maximising efficiency and minimising waste. We understand these challenges and have successfully helped numerous clients navigate them.
One such success story is a family-owned onion exporter. Faced with market changes, rising costs, and tightening margins, they turned to us for guidance. By adopting a LEAN approach, we helped them transform their operations, resulting in a stronger, more stable business with significantly improved profits.
You can download a pdf of the full case study here.
If you want to learn more about how these strategies can benefit your agribusiness, please get with Simon Drum +61 407 567 250 or email
Simon@psvcadvisory.com.au
Background
Our client is a second-generation, onion packing and exporting business founded in 1997.
From humble beginnings selling bags of onions to local customers, the business has grown into a substantial export operation supplying customers in Scandinavia, Europe and Asia.
With a new generation coming to the helm amid changing market dynamics, rising costs and tightening margins, the owners were questioning the long-term future of their business.
The Challenges
European retailers under pressure to reduce volume procured from the southern hemisphere
Australia is consistently the highest-cost Southern Hemisphere producer
Inconsistent quality and yield performance of third-party growers
Labour-intensive grading, storage, packing and handling systems
Skyrocketing international freight prices and complex logistics
Margins and profitability under extreme pressure
Market Alignment Plan Formulation
Working with the management team, we:
Analysed crop pack-out and waste data to Understand the damage and defects created by primary production, harvest and packing systems
Determine the potential to refine the crop profile and improve packed yields
Analysed factory and production line data to understand product flows, plant/equipment and labour utilisation
Identified opportunities to improve raw material quality, labour utilisation, packing, storage and handling costs
Prioritised improvement initiatives based on impact and urgency
Formulated an implementable multi-year improvement plan aligned with seasonal workload peaks and troughs
Market Alignment Plan Implementation
Over three years, we have guided the management team as they systematically implemented the Productivity Implementation Plan. During this period we have played the role of challenger, expert, trainer and coach.
Primary Production
› Refined groundwork, agronomy, watering & nutrition practices to reduce variability in performance
› Altered agronomic practice to reduce raw material waste
› Improved operational practices to reduce bulb damage
› Redesigned planting system and configuration to increase paddock yield
Manufacturing
› Refined pre-grading system to improve sizing, defect and waste removal
› Redesigned packing facility to improve labour utilisation, grading & packing productivity
Operations Management
› Introduced whole of value chain weekly planning meetings
› Introduced a weekly continuous improvement meeting to bring focus and accountability
Workforce
› Employed a production coordinator to oversee field operations & drive best management practices
› Reinvented the seasonal workforce induction & training systems
› Altered the seasonal workforce sourcing strategy
Maintenance
› Altered investment strategy to maintain all infrastructure, plant & equipment in ‘as new’ condition
Outcomes
Reduced waste proportion of crops grown by 50%
Reduced process grade proportion of crops grown by more than 50%
Removing 90% of unsalable bulbs during the intake process, dramatically improved pack shed throughput and labour utilisation
Reduced packing shed downtime by 80%, reducing shift overruns, fatigue and labour cost
Doubled hourly throughput of packing shed, reducing packing labour cost by 30% and enabling the operation to go from two shifts to one
Created operational capacity, capability and confidence to grow, pack and market
20% more volume without further capital expenditure
Continuous improvement mindset embedded
Management able to identify and prioritise future improvement initiatives
Investing in the latest technology to improve grading accuracy and reduce grading cost
The Feedback
“The implementation of Lean principles resulted in a dramatic 30% decrease of our packing shed labour costs.
Simon Drum’s experience in managing complex agriculture operations equips him with an intrinsic understanding of our industry issues and how Lean management applies in a practical agricultural environment.
Simon’s skill in workforce management enabled us to successfully redesign tasks for optimised productivity and our leadership team thrived under his excellent mentorship and collaborative business coaching.“
You can download a copy of the case study here.
If you want to discuss opportunities in You can download a copy of the case study here.your agribusiness contact Simon Drum +61 407 567 250 or email Simon@psvcadvisory.com.au