Turn around strategies for agricultural businesses

Lately one quite often hears in the media, at conferences and by word-of-mouth that agricultural businesses, are in need of a proper turnaround strategy. Having read the financial statements and reports of a number of agribusinesses, one finds it hard to believe, as the majority of companies are doing just that.

One can only come to the conclusion that, because the last six production seasons were tougher than the preceding 10 seasons, with the last three production seasons being particular tough, that especially farmers, expect that more can be done for them.

Recommendations:

It would appear that it is mostly farmers (there could be ’internal customers’ too) that feel the need for improvement, and it is important for all, agribusinesses to listen to the ‘voice of the customer’.

We, at Primo Consulting would strongly recommend that a three step approach be followed, namely:

·       Conduct a stakeholder analysis amongst all stakeholders to ensure that all new concerns are incorporated into the strategic action plans of the business (based on the assumption that their strategic plans are current and up to date) and will be addressed timeously and in the most effective and efficient way and, secondly that they

·       Re-examine the enterprise architecture with the aim to see that it is aligned to the strategic plan in the most effective and efficient way. Business architecture being the most important in the short term as it deals with

o    the ‘SWOT’ analysis that had been carried out

o    the goals that had been set

o    the organisational chart that had been decided upon as well as

o    the product range

should be addressed first.

·       Last but not least, we would strongly recommend that agribusinesses quite seriously, consider adopting the Lean Six Sigma management philosophy / methodology which was originally developed by Motorola, used by Jack Welsh as a central focus of his business strategy at General Electric and today it is central to Toyota’s Total Production System and in use by many other companies.

The reason for the aforementioned recommendation is that the agricultural sector will always experience good and not so good seasons, which speaks for itself that they must at all times, run a lean operation. Lean Six Sigma has exactly that as its aim, namely, to improve the quality of its products and/or services through the removal of defects/errors/all forms of waste. It also implies that the company is being managed with a ‘lean’ organisational structure and that all systems /processes are being run based on lean principles.

We suggest you that you visit our website www.primoconsulting.co.za for more details about our team and the aforementioned methodology. Kindly contact us should you wish us do a presentation to you.