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.

Articles on Services Provided by Primo Consulting (Pty) Ltd

Introduction

The writer has decided to publish a series of articles on the services that Primo Consulting provides, with a twofold objective, namely:

·            To provide clarity about the subject matter; so much is said about certain of the fields that we cover, in such technical jargon, that it is more confusing than anything else, and secondly

·            To indicate how the various aspects slot in with each other.

In order to indicate how the various aspects slot in together, the assumption is that a company wants a full ‘revision’ / revisit (a complete check), to ensure that its business is being conducted on a sound footing.

Note:  Although the articles follow in series, it is not to say a company must follow the full suite; we will fit in where a company needs assistance.

Strategy Formulation

Strategy formulation is nothing more than deciding on a number of strategic objectives that a company wishes to reach in future, in uncertain conditions. We facilitate this process with top teams, with one precondition, that the top team first participate in a proper scenario planning exercise. We work closely with a world renowned scenario planner, the reason being, that the social, economic and political landscapes, not only of South Africa, but also of Africa and the rest of the world, need to be analysed (because of the close inter-connectedness), and the most plausible forecast of ‘happenings’ needs to be ‘spelled out’ so that executive teams can realistically decide on how to achieve their strategic objectives.

Enterprise Architecture

The next area that needs to be addressed is the company’s enterprise architecture (that which the company consists of, and which makes it work).

This includes the following areas that we address with the top teams and selected SME’s (in-house subject matter experts), and which covers the following areas:

·            Business architecture

Based on the strategic goals decided upon, required product changes, required organisational structures for the future, locations, and a proper SWOT analyses needs to be established.

·            Information architecture

A plan to ensure where and how a company will store information so that it is secure, safe, and easily accessible.

·            Application architecture

A plan for maintaining legacy applications and strategies for replacement, a plan for new applications and their interfaces, awareness of how new technologies may impact existing and future applications, and a plan to support the expected growth.

·            Technology architecture

Supports the application architecture by outlining the strategic direction for brands and types of hardware, software, etc. that will be used.

·            Security architecture

Outlines the plan for ensuring security of assets like database, business rules and protection of application systems, i.e., backup, restore and recovery plans.

Notes:

·               The above is a shortened versions of the various architectures.

·               The abovementioned exercise would normally be carried out over a period of time, as it involves quite a bit of research and analysis.

The Balanced Scorecard

Once the above is in place, we at Primo follow the Balanced Scorecard to optimise a company’s performance. As is known, the following areas of the business are addressed:

·            Finance

A proper financial analysis is conducted, and recommendations are made.

·            Client ratings /needs

Apart from obtaining client ratings of the services provided, we take care to establish changes that a client needs, and whether a company is addressing these changing needs.  If not, we assist clients in the next step, to do just that.

·            Innovative ability and people development

Having detected any shift in client needs, we assist companies to develop the necessary skill sets to cater for such changing needs and the training and development of their staff, accordingly

·            Business process optimisation

This is the area where clients, whose companies having difficulties to remain competitive in an ever changing economic environment, requires assistance. At Primo Consulting, our consultants are experts at analysing business processes, removing all waste factors, and designing lean processes. We make use of the Lean Six Sigma methodology, which is based on facts and figures, and the development of a sound business case, prior to us optimising any business process, against which our performance can be measured.

Note: For a more detailed description of our methodologies, kindly visit our website www.primoconsulting.co.za or send us an email to request@primioconsolting.co.za requesting more information.