Procedures keep the business engine running
When Michael boarded a plane for South America in 2012 he was not just kickstarting his GRDC-funded Nuffield Scholarship, he was also testing his own approach to his research topic.
While Michael spent 22 weeks travelling through 16 countries (including Chile, China, New Zealand, Russia, Ukraine and Uruguay, as well as others in Europe and North America) studying farming business management structures, his wife Fiona managed their 1080-hectare mixed farm south of Launceston.
It was no small task, as the Chilvers’ business encompasses 10 different enterprises and a high level of diversity, typical of Tasmania’s agricultural sector.
“I set out to explore avenues for growth, with particular interest in the role of production management systems as a means of freeing up time to focus on business development and expansion,” Michael says.
“Stepping away from our business brought home the relevance of processes and standard operating procedures (SOPs). It explored a fundamental question: ‘What strategies can support decision-making in production agriculture during an absence of key management personnel?’”
He says it is a pertinent issue for Australian farming as it meets the challenge of keeping experienced workers in agriculture coupled with an ageing demographic and transitioning between generations.
“With each new generation the need for growers to maintain a dynamic agricultural business is paramount. It’s not a pleasant thought, but what happens if you, as an owner or manager, are suddenly unable to make decisions? How do you share your experiences and knowledge with others in the business?”
Michael explored how developing a systems approach (regular or codified procedures) for the complexities of a farm business creates decision-support tools that can:
- aid succession planning;
- identify opportunities to diversify, specialise or expand;
- enable repeatability and product consistency;
- help secure external investment; and
- give employees the knowledge and confidence to make responsible decisions.
One example he found was the expanding dairy industry in Chile, where he visited farms owned by New Zealand growers who had replicated protocols across 37 dairies, imposing uniformity and simplicity. These procedures guide dairy development and herd management, providing a standard to measure production.
Michael says his Nuffield experience showed him how farms in other countries have implemented procedures to overcome challenges such as unskilled labour, seasonal variability and quality assurance.
For example, PX Farms in Cambridgeshire, UK, uses a systems approach to achieve growth. It takes a uniform approach to each field, from soil sampling strategies at the start of the season, to agronomy and crop monitoring, and finally harvest, grain storage and marketing.
When it comes to developing SOPs for Australian grain-growing businesses, Michael says there are some critical elements to be considered.
“Successfully implemented SOPs are best developed from needs identified within the organisation, rather than imposed from outside. They also need to deliver a sense of ownership of the process and outcomes. They can begin as simple models but are regularly reviewed, refined and updated to reflect the business’s evolving needs.”
Michael says that while SOPs are often codified (written down), such as machinery operation manuals, he sees potential for alternatives such as video instruction/demonstration and using technology for reference and decision support.
Michael says his GRDC-supported Nuffield Scholarship will help him build his enterprise’s capacity by formalising processes and creating decision-support tools to rationalise diversification, develop employees’ skills and free-up management capacity to focus on business growth.
More information:Michael Chilvers,
GRDC Project Code NUF00010
Region Overseas, South