How fast is your turnover rate?

Toyota was looking for ways to streamline their businessmodel with the aim of reducing costs and having the quality of their end product aligned with customer expectations. In addition, they have set up the Toyota Continuous Improvement Program. Over the years, under the name LEAN, it has been successfully used by many companies in all kinds of industries all over the world.

It is about delivering the right quality product at the lowest cost, with the aim of making a profit. The right quality therefore means in accordance with the customer's demand. Niet meer, niet minder. Winst maken is een vereiste dat voor alle bedrijven geldt.

The question for any business is;

How do I deliver the quality my customer desires at the lowest cost?
The aim, for farmers, is to achieve the highest possible margin per kg of product in order to achieve income and profit.

To answer this question, we look at the production methods of companies. What is done to make a product and what is needed to do it.

By far the most dairy farms in NW Europe work with a high input business system. Milk is produced here all year round, whereby production is based on own and purchased feed, storage, machines and auxiliary materials such as fertilizer, minerals, own labor and purchased labour, as contract workers, accountant and veterinarian.

The business question consists of 2 parts; deliver the quality that the customer demands, no more and no less. At the lowest possible cost. When answering, we look inward; in business operations.

How roughage is handled determines a large part of the costs and therefore determines the level of the cost price.

The more silage on the plate, the more manure in the pit, the higher the cost price/kg milk.

The roughage process on high input farms is as follows;
Mowing, shaking, raking, chopping, transport to storage, unloading, driving in, covering with plastic, soil on, soil off, silage, mixing feed, carrying out, milking, collecting milk, money in the account.

A trajectory with 16 actions, in which 15 of them requre machines and people.

The roughage process on low input farms looks like this:
Grazing, milking, collecting milk, money in the account. A trajectory with 4 actions, whereby 3of them requiire people people are needed and 1 is a machine.

So it's very interesting to see that dairy farmers, voluntarily, perform 16 actions, pay for 15 of them, while an equal quality can also be achieved by performing 4 actions.

An aspect to which no one pays attention but which determines liquidity, the money supply, is the money cycle.

Dairy farmers run risk and increase their cost price by investing in labor and machines to conserve roughage thereby creating a money cycle that is 13 to 26 times longer than necessary. While the product, meeting the same requirements, can also be realized in 4 steps with a money cycle of 2 weeks!

Do you also want to simplify your business operations, with less work, less risk and good liquidity? Then view our courses at; https://puregraze.com/product-categorie/cursuspakketten/

With our 2022 grazing course we help you increase the margin by maximizing grazing effectively. A sophisticated curriculum guides you through the backgrounds of plant production and grazing. Consisting of; webinars, practical meetings and 1 on 1 advice, you will be expertly guided by our Farmers coaches, people from practice. They know grazing like no other!

Next year there will be subsidy options for the 2022 grazing course. This means that up to 80% of the course costs can be reimbursed.

We will be organizing a webinar about this on 30 November, with information about the subsidy options within the grazing course 2022.

Register here for the webinar of November 30 >>>> https://puregraze.com/evenementen/webinars/

View the grazing course 2022 here >>>> https://puregraze.com/product-categorie/beweidingscursus/

Sign up today!