Crying for a Lean agricultural demand chain

produce

Lean thinking, evolving from the Toyota Production System is changing manufacturing world, but agriculture has a long way to go.

Just as building cars used to be a production oriented operation until Toyota turned it on its head, so too is agriculture production led. Grow it, then try and find a market.

Well the world has changed, and demand is as big a pull factor in the world of agricultural produce as it is in cars, so the challenge is to leverage it. Just grow it and they will not necessarily come.

This does not mean that you have to find a way to manipulate the genes of an apple tree to give peak production in 2 or 3 years instead of seven, remove the impact of  the seasons,  or grow product out of its natural environment, which we can do for some products in greenhouses,  but it does mean that change is urgent.

There are some things we can do much better that will help:

    1. Collect inventory data, and make it transparent and available. Agricultural inventory is not just what is ready for sale, but what is in the ground and likely available in the future days, weeks, months and years. Understanding the dynamics of agricultural inventory is even more important than manufacturing inventory because the cycle times are often so long, and the shelf life is limited, in some cases to days.
    2. Remove price as the purchase determinant. Sellers of produce have lost sight of the value that fresh produce delivers, and have lost any semblance of control of the chain, and the opportunity to brand. As a result, price is the overriding determinant of a sale, it is a race to the bottom, a race that does not have a happy ending for anyone. Having lost the initiative, it will not be easy to get it back, and any progress will take years, but it is a crucial challenge.
    3. Energise marketing. Easy to say, but extraordinarily hard to do. The agricultural “marketing” bodies that exist via levies have demonstrably failed in the marketing part of their charter. All that is left is for producers to take back some responsibility for marketing, and start to build their own branding and  business models. Logically this can happen at the fringes, in the corners, rather than in the mainstream. The emergence of Farmers Markets is to my mind an precursor of this activity. 
    4. Create new business models to accommodate the points above. Existing structures have led to the current poor situation, so it is unreasonable to expect  them to be able to change into something  radically different. These new business models have great challenges, great opportunities, and the cost of failure will significantly impact on our food security, and cultural roots. 

Without the evolution of an agricultural version of a lean value/demand chain, the volume and value of our agricultural output will decline over the long term. Increasingly we are becoming uncompetitive in global markets, we currently import more than  half our packaged food and groceries, our capability base built up over generations is leaving, and once gone, will not return.

We appear to be at some sort of inflexion point, getting it wrong over the next decade will leave our grandchildren poorer than we have been, reversing 250 years of improvement.

About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
This entry was posted in Branding, Change, Demand chains, Marketing and tagged , , , , , , , , , . Bookmark the permalink.

One Response to Crying for a Lean agricultural demand chain

  1. Pingback: 3 foundations of demand chain success | StrategyAudit

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