Why Do We Need Sustainable Agriculture?

I know that all the family farmers in 1970s used sustainable agriculture methods in Artvin. We were protecting our forest, natural plantation and rotate the crops each year and feed the animals with the annual and prennial crops and forage and protect the biodiversity. We increased the number of the trees in our fields and protect the soil quality and natural habitat. This is a real practical experience when I compare today’s good agricultural practices and it is a valuable know-how in increasing the agricultural output by connecting today’s innovative agribusiness techniques.

Now, let’s look at the future. We will feed 2 million more people in 2050. Demand for food will be more than 70 per cent. This situation creates a question; how can we increase agricultural output?

Clearly , I have to define that agriculture must be environmentally, economically and socially sustainable. This can make a vital contribution to reducing poverty and ensuring food security. Because farming is a key source of income that can help make poverty history and increase the welfare as in our province.

In Asia and Africa today, there are 500 million smallholdings having 2 hectares that provide direct livelihoods for 2 billion people. The best way is to support these smallholders to integrate them into food production chains and helping them in market access and regulatory compliance can foster sustainability in agriculture.

Today, agriculture is the main source of income for more than a third of the world’s population. When we look at the figures in developing countries, agriculture accounts for 29% of GDP and 65% of jobs.

When I visited different rural locations, I see that smallholder farms are an important part of the solution and they must be supported in good agricultural practices, integrated pest management methods, skills development, regulatory compliance, collaboration, technology, innovation, finance and market access to achieve high productivity and economic growth and reducing poverty.When we have applied a sustainable agriculture program in Turkey, we have coordinated and supervised GAP program to supply clean, green and safe fruits, vegetables and grains according to the EU infant food regulations and we were also successful in livestock, poultry and fish farming operations. We collaborated with the farmers, SMEs and Government agencies. So that we created economic growth in the region, welfare to the farmers and increses in exports to the other countries. It was the first in Turkey and real success story in food value chain analysis and development.

According to the researches, if we implement sustainable farming systems in the world, the agricultural production can increase approximately 80 percent in low income countries. This will generate decent income and contribute to economic growth and poverty reduction.

We have to keep in mind that the number of people living in hunger is approaching one billion today. This means that we have to support the sustainable agriculture in the world to prevent the poverty.

Now let’s look at the advantages of the sustainable agriculture:

· Production of the clean, green,safe and healthy food in farms;

· Conservation of the natural resources such as water, soil, plants and air;

· Application of the chemical inputs such as fertilisers and pesticides very judiciously;

· Protection of the biodiversity (habitats, genes, species);

· Improvement in water and nutrient retention, soil conversation, amenity, carbon cyle and carbon storage;

· Prevention and control the greenhouse gases and control of the climate change;

· Creation of economic growth, reduction in poverty and improvement in quality of life;

· Improvement in animal welfare;

· Application and improvement of the clean, green, ethical, safe and nutritive agrifood supply chain system and creation of the local and global market access.

We have to keep in mind that sustainable agricultural value chain development critically depends on the quality of seeds, soil quality, climate, water resources, supply chain capability, management style, technology, market access, regulatory compliance, product portfolio development, skills, finance, customer needs, innovation and marketing strategy, collaboration, networking and effective leadership.

Traditional corn farming is a valuable income source for many family farmers.

How to Prevent Quality Failures in Food Companies?

Some leaders are asking the reasons of the quality failures and inefficiency at their manufacturing operations.

They ask me how they will prevent quality problems and increase the efficiency.

I see that some big corporations also have similar issues and we learn from the social media. They are unhappy due to financial losses, unhappy customers and decreasing market share. They know that if such issues continue it can damage their company's image and may contribute to the business failure.

After working a lot of years in the pharmaceutical and agri-food industries, I know that there are a lot of reasons for these issues.

1- Raw material quality.

They don’t analyse. They trust in the supplier’s results.

They analyse and make a mistake in the analyses.

They analyse the raw material at the external laboratory and the result is a false positive.

2- Damaged products in the line.

People don’t inspect what they produce. Damaged products go the market.

3. Not considering regulatory rules.

They approve raw materials, bulk products and/or finished products that are not conforming regulatory limits. Leaders apply pressure for approving the products to make cost saving.

4- Using poor quality products.

Using quality defected products in the new productions creates quality failures in the final product during shelf life. Customers can purchase such products and detect quality defects. This situation contributes to the customer dissatisfaction and losses in the market share. These poor quality products can also be detected by authorities and shared with the social media and public.

5- Working with the unskilled people.

Unskilled people can not see the quality defects, failures and possible results.

6- Working with the disengaged people.

Disengaged people may not care the quality limits and send the products to the market without informing the upper levels.

7- Removing great skilled people from the organization.

This situation creates a great loss in knowledge, experience and skills and can create cost increases and decreases in customer loyalty. Poor leaders aim to increase the cost saving and don’t calculate the results in the future.

8- Poor morale and motivation in the workplace due to the poor leaders and managers.

9- Poor HR management and high turnover .

10- Using old technology in the operations.

11- Clubs, clans, internal politics and toxic culture in the organization.

12- Poor leadership in the supply chain, quality, operations and/or senior management.

13- Poor warehousing, transport and retail management.

14- Poor organizational alignment, agility and operational excellence.

15- Poor training, development and rewarding policies.

16- Poor cooperation and communication with external bodies.

17- Wrong applications of operational processes by people due to poor experience, knowledge and skills.

18- Weak manpower.

The number of people are important to create quality and efficiency in the operations. If the number of people are less, this will create problems such as low productivity, high cost, health and safety issues, disengagement, low morale and motivation and quality problems in the operations.

19- No standing on the field operations, suppliers, warehousing, production line, quality department and study the process. Poor inspection and improvement.

20- Poor analyzing the facility.

21- There is no feasible targets.

22- Poor vision sharing and poor commitment to the business goal.

23- Poor candor effect in the organization. False feedback to the upper levels.

24- Poor commitment of leaders to sustainable improvement in quality performance, customer satisfaction and regulatory compliance.

25- Failures in optimizing the quality and compliance management systems due to the unqualified quality and/or senior leaders.

26- Poor benchmarking and competitive intelligence.

27- Poor efficiency, productivity and competitiveness.

28- High trust to the systems and neglecting the people’s experience, knowledge and skills.

Of course, we can increase the number of reasons in quality failures in the companies.

Conclusion

Companies have to work with the well experienced leaders who have excellent knowledge and skills in quality, compliance, supply chain, operations and other fields. They have to train, develop and reward the right skills. They have to remove poor skills. They have to invest in innovation management and new technologies to increase quality, efficiency and productivity. If they don’t have the opportunity to manage quality and compliance management in excellence, they have to hire a well experienced expert from outside. Companies should make benchmarking, competitive intelligence and customer surveys to improve their products and services. They have to create more transient competitive advantages that regards the customer needs. They have to improve skills by training, investment in equipment and better management of staff to prevent product recalls. They have to have a great respect for the environment, people and regulations.

We are living in a complex, uncertain, hypercompetitive, global and digital world. Please note that the increasing complexity of regulations creates a pressure on business. Therefore, quality is a source of competitive advantage. It helps companies to reduce costs and improve their brand perception and creates high revenues.

I have to say that working with the right leaders, applying effective talent management, training the people and making an investment in the new technology can create a cost in the short term, but this will create high productivity, low cost and great customer loyalty in the long-term.

If they don’t consider above requirements, show an inability to take appropriate action, they can damage their business in the future and its cost can be destructive.

Food products' recall is a nightmare for companies!

KPIs as a Strategic Change in the Food Industry

Common practices

Many organizations are using Kaizen, Lean Manufacturing, Total Quality Management, Six Sigma and Continuous Improvement to improve their processes, drive productivity and maintain a competitive edge in today’s uncertain and complex business world.

I know that each practice uses Key Performance Indicators (KPIs) to assess, analyze and track their manufacturing processes to drive productivity by using common Key Performance Indicators for production line monitoring.

I believe that using KPIs will be helpful to evaluate production output, efficiency and quality in real-time.

When I visit food manufacturers, I see that some of them don’t use KPIs monitoring. This situation creates a lot of difficulties to evaluate the performance of the organization. It is clear that they are missing the results that help to decrease costs, increase efficiency and output, decrease waste, increase quality, people’s performance, optimize number of staff, operational excellence and organizational agility.

It is clear that we have to eliminate inefficiencies in the manufacturing processes and value chains by using KPIs.

Common KPIs

1- The count of Good or Bad Products. This shows the performance of the employee and the related persons.

2- Reject Ratio. This is important to lower the scrap, increase the profitability and quality.

3- Rate. The performance of an operator, the quality of the product, the speed of the machine and the process; all are related to the cost, profit and quality. Therefore, operating speed has to remain constant to produce at a certain rate.

4- Performance Target. Target values must be defined for output, rate and quality. This is important to motivate employees to meet specific performance targets.

5- Takt Time. This shows the amount of time or cycle time fort he completion a specific operation. It is helpful to see the constraints or bottlenecks within a process of manufacturing operations.

6- Overall Equipment Effectiveness (OEE). This is an indicator of resource utilization. It shows the effectiveness in utilization of the machinery and available personnel.

7- Downtime. This is one of the best KPI metrics to track. It is a crucial parameter to reduce downtime in manufacturing operations to increase productivity, decrease costs, increase quality and employee performance.

Visual Management in KPIs

Real-time information is required to drive the productivity and perform a truly effective visual management to achieve a high performance manufacturing organization in the agrifood manufacturing industry. Therefore, many companies are using new technologies to monitor their production operations to drive productivity and improvements in costs, wastes, quality, people’s performance and profitability.

I know that if a company effectively monitors production operations and take right information, they can increase profitability and drive productivity with 10-15 percent faster completion time. This will create low cost and high profitability.

Specific Factors Affecting KPIs and Productivity

1. The capability of real time information capturing and data collection.

2. Working with the right skills and regular training.

3. Quality of the machines and equipment.

4. Input materials.

5. Time.

6. Floor area or space.

7. Power or energy.

8. Finance.

9. Movement of man and materials.

10. Production plan and forecast

11. Measuring system for KPIs.

12. Right and valid data.

13. Leadership support.

14. Market

Lean Practices in the Food Manufacturers

On the other side, when I visit the food companies, I ask two questions. First one is, “ Do you apply Lean practices and monitor your productivity?” A few of them, they apply and monitor.

The second question is, “Do you have satisfaction with their impact?” A few of them were happy with the impact.

Our Experience

According to my intensive experience in the infant food, bottled water, agriculture, artisan chocolate and pharmaceutical manufacturing operations, factory start up, supply chain management, quality, R&D, microbiology, regulatory compliance and people development, business development and innovation management, food companies have to use KPIs and Lean practices to create a competitive advantage.

I know that applying Lean practices to the food manufacturing industry is not easy. We have to consider a lot of parameters such as forecast, lead times, actual demand, inventory, reworks, procurement, transportation, quality, growing and maturing cycles, shelf life, warehousing and shipment, number of staff, processing and actual demand etc. All of these add complexity to an already complex business that have large batch processes.

Taking decisions on the table and saying Lean will create great productivity and financial impact is very easy.

I know that there is nothing wrong with Lean and productivity monitoring. The most important factor is to effectively manage Lean practice and engage the workforce.

Obstacles in Terms of Adopting Lean Manufacturing Methods

1. Weak leadership and failure of management.

2. Lack of a clear vision.

3. Lack of patience and follow through.

4. Failure to engage and involve employees.

5. Think of it as a source of cost.

6. Lean Transformations

When I look at the success rate of Lean transformations that are managed by expert Lean practitioners, it is smaller than 50%. The main reason is that many companies are back when they don’t see quantifiable improvements in financial terms in the early-to mid-stages of the Lean transformation.

I see that many Lean practitioners have very shallow manufacturing experience, know-how and skills. They may have mastered the necessary Lean “book learning”. Therefore, their Lean practices don’t have meaningful impact.

Lean Management

I have to say that effective Lean management requires excellent experience, know-how and skills in manufacturing operations to solve the issues to achieve high productivity, high quality and low cost. Another point is the high pressures over the leaders. Because their performance metrics are short- and/or medium-term and they don’t wait to see the impact of the Lean practices that can create the long-term impact as ROIs.

I know that Lean management is not a mystery and it can be successfully managed by well skilled and motivated people in the organizations. Starting with the eliminating the wastes and increasing the revenue can be a starting point and continuously complementing and supplementing the existing practice will be beneficial to the supply chain performance improvement and innovation.

Increasing Efficiency and effectiveness through Lean

Lean is a primary manufacturing improvement technique to improve processes, quality, productivity, delivery time and costs by monitoring KPIs. The main objective is to increase efficiency and effectiveness of the operations to achieve a financial impact as a result.

The most crucial factor in Lean transformation is the capability of the leadership and also experience, knowledge and skills of the people in the organization.

Using new technologies is a crucial factor to achieve high productivity and mass production. We are entering into the 4th industrial revolution and cyber-physical systems age within the next 10 years. In today’s conditions, companies see labor, quality, and development time as the main improvement areas. In future, these improvements are expected to be driven by digitization of knowledge work, advanced analytics, and touch operation/interfaces in the manufacturing industry. All of these developments will create great competitive advantages to achieve excellence in Lean practices, labour performance, product quality, delivery time, ROI, flexibility and mass production. The revenues are expected to increase by 23 percent and productivity by 26 percent, according to the McKinsey Industry 4.0 Global Expert Survey 2015. I believe that Industry 4.0 will change the manufacturing process and resource allocation of small to medium-sized manufacturers significantly and they have to take necessary adaptability actions on time.

Applying Lean practices and monitoring KPIs are helpful to identify and prioritize optimization opportunities around the value drivers in the manufacturing operations and/or supply chain management. These value drivers are resource/process, asset utilization, quality, supply/demand match and time to market.

Conclusion

1. Work with the great leadership and the right skills. Invest on the ability and skills of your staff and hunt for talented people.

2. Use new technologies to monitor real-time KPIs.

3. Perform Lean transformation by using real-time KPIs. This must be a systematic and continuous process. Improve product quality, cost and timeliness.

4. Benchmark productivity and created value with your competitors.

5. Make a competitive intelligence and perform a strategic marketing and innovation policy by regarding short and long-term customer needs, the future of the sector, new technologies, new products, and new services in the domestic and global markets.

6. Of course, the result will be dependent on the capability of the leadership and overall innovation performance of the manufacturing organization in the food industry. These outcomes may be;

1. Increase productivity up to 30%

2. Reduce work-in-process (WIP) inventory up to 50 - 90%

3. Reduce space requirements up to 10 - 40%

4. Improve quality up to 40 - 80%

5. Reduce lead time up to 50 - 90%

6. Increase gross margins up to 30%

7. Increase effective manufacturing capacity up to 30%

8. Thank you for sharing your experience and insights.

Successful key productive indicators and lean transformation management brings a competitive growth to the food manufacturers