Using Lean to Improve the Performance of your Manufacturing Systems & Processes

Over the past two years, the cost of raw materials, plant and machinery, freight, labour and consumables  have risen sharply placing intense margin pressure on the packing, processing and manufacturing operations of agribusiness. With no price relief in sight, it’s vital that Australian agribusinesses start to take a proactive approach towards improving their operation if they want to maintain any kind of profitability. So where do you start?

It all begins with ‘waste’. Most agriculture operations believe they have a pretty good handle on ensuring there’s little waste in their business, but in our experience, there’s plenty of waste to be found.  We can just about guarantee that your manufacturing systems and processes are riddled with waste and it’s impacting your quality and profit. We can also assure you that dramatically reducing this waste is totally within your control.

What is Waste?

Waste presents itself in various forms within primary production operations. It can be hard to spot, but once you learn where and how to look, you’ll begin to see it everywhere and recognise just how much it’s impacting on your agribusiness.

Some examples of waste commonly found in agricultural manufacturing systems and processes include:

·         Tasks or production runs being performed incorrectly or ineffectively

·         Unnecessary motion, physical effort or handling of goods

·         Using more labour, machine time, energy or production inputs than necessary 

·         Idle labour or machinery waiting for upstream activity, raw material, maintenance or instructions/information

·         Underutilised or unproductive labour

·         Excessive inventory of raw material, WIP, finished goods, spare parts, consumables, packaging or hire equipment

·         Producing more goods than downstream storage, handling, logistics or sales functions can manage

·         Producing more finished goods than the business has profitable sales for

·         Producing any goods that do not meet preferred customer specifications

·         Producing higher quality goods than required to meet customer specifications 

The Financial Impact of Waste on your Agribusiness

In isolation, these wastes only have a modest impact on the financial performance of a manufacturing operation. However, the reality is, that most, if not all of the wastes exist within each and every operation and occur to some extent at least every other day.

Cumulatively these wastes erode productivity, increase workforce fatigue, reduce quality, raise the cost of goods and working capital requirements and increase the likelihood of customers being short delivered or dissatisfied.  The impact on an enterprise’s profitability is profound.

Taking Control of Waste - Manage What You Measure

The waste within your manufacturing systems and processes represents an opportunity. Unlike customer quality expectations, marketplace competition, rising input and labour costs, removing waste from your systems and processes is absolutely within your control.

So why has it never been looked at this way before? Because the traditional financial statements agribusinesses use to measure performance were never designed to measure specific systems and processes. Consequently, much of the waste we are talking about in primary production operations remains hidden.

Conversely, Lean process metrics measure the performance of the underlying operational systems and processes that ultimately deliver an enterprise’s financial results. 

With Lean, information is fed straight to the responsible team member in real time – delivering process metrics that provide your front line management with the insight they need to make informed operational changes or strategic corrective action.

Your Opportunity to Improve

PSVC Managing Director, Simon Drum, has over 25 years’ experience in Australian and international agribusiness. Based in Melbourne, Simon has built his unique expertise working for major Australian agribusinesses and large food producers in senior strategic, commercial and operational roles. 

Simon has been applying Lean principles to a diverse range of large and sophisticated manufacturing and packing operations for more than a decade. His practical approach towards solving problems in agribusiness has seen him develop a range of insightful diagnostics that help clients identify the factors to improve performance.

Try it for yourself! Complete our Manufacturing diagnostic and take the first step towards improving the profitability of your agribusiness. 

For more information, contact or 0407 567 250



' Engaging PSVC Advisory to assist in 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 ag 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.'