What if you had a hired gun who did nothing but look for the tiniest inefficiencies in every business move you made? What would that person be worth?
In the case of highly-regulated California farm operations, quite a lot. Bowles Farming Co., in Los Banos, Calif., grows 20 or more vegetable, nut or fruit crops year around on 12,000 acres, a venture so massive it takes upwards of 60 full-time managers, and provides jobs for over 1,000 people.
Talk about a lot of moving parts!
That’s one reason why CEO Cannon Michael hired senior farm analyst Curtis Garner. His main task is to marry financial data with operational data and spot trends where change can boost efficiency and make more money for the business.
All he does is sniff out ways to help the farm become more efficient.
“Business Intelligence - dashboarding - is the reason Cannon hired me,” says Garner. “We have a phenomenal cost accounting system, but financial and regulatory reporting have been the key drivers of that system, and nobody dug in and looked at year-over-year trends. Are we doing better this year than last, are we spending more, how are we doing with fertilizer – cost per acre, cost per unit sold?
“I spend my days looking out for trends and anomalies – areas where we can improve.”
Labor needs especially can throw a monkey wrench into this process.
“In California there may be situations where you need, say, 60 workers all at once for a short period,” he notes. “You have your accounting system over here, and contract labor over there. I’ll marry our payroll data with contract data to see what our head count is, if we are over or under on year-to-date spends, or over-under on hours now, compared to last year.”
Use the right tools
Garner will use all kinds of online tools to organize and crunch operational data, including JDLink and CropTrak. He’ll use another tech tool called Harvestport to unearth best input and equipment deals, or list unused equipment for rent to other operators. He uses Tracmap to track vehicle data and review completed jobs. That program provides a work order tracking system and planning tool that lets you push work assignments out to people. It provides live dashboard tracking, color coding fields by crop, allows for notations on what’s happening in those fields, and percent complete tracking.
“It will paint a line to show where the vehicle goes via GPS,” Garner explains. “In an orchard when a guy sprays at night, he might miss a row and you wouldn’t know it, ever – that could be a pretty big deal.”
But Even without those data-driven tools, he thinks farmers could do more to weed out inefficiencies just by taking a page out of the industrial playbook.
“One of the things I think is missing in ag is manufacturing principles like Kaizen (continuous improvement), Kanban, Lean, Six Sigma and 5S (sort, straighten, shine, standardize and sustain.),” he says. “If you ‘ve ever worked in a production facility you’d be familiar with these terms. Apply these principles to the farm and you can get a ton of value, saving time and money.”
Farmers can already get some financial and operational feedback by hiring consultants, participating in programs like University Farm Business Farm Management associations, or plugging into databases like FINBIN, where they can compare and benchmark their business with other similar farms.
Change your mindset
Garner worked at a 50,000-acre tomato cannery where he learned the value of focusing on metrics like acres per hour planting or costs per unit produced.
“I didn’t come from a farming family,” he adds. “I ended up in ag accidentally so I have no preconceived notions of how things are supposed to be done.
I can ask the innocent question,” he says. “Sometimes those silly questions get, ‘It’s just the way we’ve always done it.’ So, questioning assumptions is something you should do on a regular basis.”
Questioning assumptions led Garner to dig into the company payroll system and discover ways to save money.
Garner meets with the farm’s leadership team weekly where he reports a Key Performance Indicator scorecard on business and financial health of the farm. He uses Google’s entire suite of tools – including data studio to create graphs - and everything is stored in the cloud. Other world-class farm operations are utilizing Microsoft PowerBI or Tableau.
Sometimes those meetings can get downright uncomfortable.
“We’re not always popular because we sometimes shine light on some dark parts of the business,” he says. “But, we have the best interests of the business in mind. This is like a post-game analysis, where we look at the process and what improvements we can make. The point isn’t to arm-chair quarterback, but to improve the bottom line in perpetuity.”
He’s also writing Standard Operating Procedures, manuals on how to buy, and what policies and procedures the farm follows. Things like, how many bids do you need before you make a decision?
What makes that process go smoothly is developing a whole farm vision first.
“You need to have a vision for the company, get everybody on board,” he says. “If you’re all rowing in the same direction down the wrong path you’ll find out quicker, and you can be nimble and course correct faster.”
Getting everyone to ‘row in the same direction’ requires some training and education. In a larger farm operation, it’s not the CEO spending money so much as it’s the mechanic or the operations manager in the field.
“They’re pulling the trigger on purchases or repairs, so you need to get the information down to their hands and instill economic thinking in them,” he says. “Most of them don’t understand how much money is flowing through their hands. The more you can illuminate the costs they are incurring, the more economically-minded they will be and make more informed decisions.”
Sounds like good advice, but it’s something many senior farm leaders ignore. When you don’t take the time to train and empower others, people become the limiting factor in your business success.
“In my previous job I was an operations manager but I couldn’t find enough time to fully escape working in the business, so that I could work on the business,” he says. “I learned you need to lead from the bottom up and turn the hierarchy upside down. Empower the boots on the ground to make the right decisions.”
Re-think everything with First Principles
Garner will scrutinize simple tasks and determine if something can be done better, faster or cheaper. At the tomato cannery he learned something called ‘First Principles,’ or seeking out effective strategies for breaking down complicated problems and generating original solutions.
Electric car maker Elon Musk first employed the concept in 2002 in his quest to build a rocket ship that would journey to Mars. Musk wanted to build electric cars but saw the cost of batteries as a deal breaker; using First Principles, he researched battery materials, what the cost of individual components were (i.e. plastic, lead, acid), and figured out there was a ton of margin in manufacturing his own batteries. That was how the all-electric Tesla model became reality.
Garner believes farmers also need to get out of the local coffee shop if they want to improve their decision-making.
“Your network is your net worth,” he says. “Farmers are great at staying in their own bubble but there’s a lot of value in getting out and hearing other diverse perspectives.
“We interact regularly with people you might think are enemies of agriculture,” he says. “We’ll speak at food events, non-ag conferences, to NGOs, and colleges, hear what people of different walks of life or the kids are thinking and learn where the consumer is headed. This drives the activities on the farm. If purple vegetables are the most instagrammed food item, then should we grow them?
“Being a price taker and not a price maker is huge, but it’s how you differentiate yourself from others that helps you command a premium price.”