As Labor Costs Rise, Red Fire Farm Looks for Ways to Save
The Recorder, March 1, 2017, by Richie Davis
The same cutting-edge efficiencies that helped Toyota retool its manufacturing are taking root on the farm.
With labor costs rising, as they are for other businesses affected by the minimum wage increase, Red Fire Farm is getting help from a consultant through a Franklin County Community Development Corp. program.
A $2,500 grant from Massachusetts Growth Capital Corp., a state-funded technical assistance program aimed at farms affected by last summer’s drought, brought the Community Development Corp. to look for ways to help the farm in Montague and Granby address what farmer Ryan Voiland says have been dramatically increasing labor costs that hit his operation as a double-whammy with lost income because of the drought.
“We’ve been financially on a shoestring as long as I can remember,” Voiland said. “But it’s gotten worse in the last two or three years, particularly as the minimum wage has increased, pushing up our floor (pay) for entry-level workers. We’ve seen our labor bill go up more dramatically, 10 to 20 percent a year, even though we’ve been able to maintain our hours and remain as efficient as we used to be.”
Amy Shapiro, the CDC’s business development director, said, “By becoming more efficient, that helps (Red Fire) control their costs.” Shapiro helped identify Concord, N.H. “lean-manufacturing” consultant Scott Morrison who was brought in to help
Red Fire will match the Massachusetts Growth Capital Corp. grant with its own funds, said Shapiro, who hopes to work with Community Involved in Sustaining Agriculture (CISA) to help other farms make use of the same efficiency approach.
Morrison visited the Montague farm for two days last week, offering an overview on how to reduce and eliminate various kinds of waste, which he said can result in a 25 to 30 percent savings for the operation.
“Thinking about the waste that happens on a farm, from the produce that doesn’t get harvested because you’re unable to sell it, to all of the wasted time and effort,” Voiland said. “A lot of these principles can be applied all over our farm, if we can get everybody thinking in that way.”
The first tasks examined at Red Fire, though, were the processing and packing of salad greens at the Montague farm’s packing barn. Using sticky notes, the examination looked at each step from taking orders to how they are tracked and communicated to the packing staff and then delivered. Each of the roughly 15 management staff members were asked to identify where they saw any potential for improvement.
A second round was following how eight to 10 workers packing greens set up pallets, various pieces of equipment, bagging stations, washing tubs and other stations, and how they moved through the process to see where things or people in the way were slowing the process.
“Salad greens are one of the most time-consuming processes we have,” Voiland said. “He really tried to help us hone in on that as a starting point, and see if we could figure out improvements in our process. We mapped that out and talked about future ideas,” so that by rearranging the layout, Voiland and the staff were able the following day to reconfigure the space for what would work best.
“Just by being really conscientious about trying to reduce wasted steps as we move back and forth carrying everything, so that we make as few wasted motions as possible and the ergonomics involved. If everybody’s thinking about how we can make two seconds of improvements in just their process, for tasks we’re doing every day, on a regular basis, there are incremental improvements like having the right supply in the right place and not having the wrong supply in the way, we can help get our staff thinking about these efficiencies in a more serious way.”
Time-motion studies may seem incongruous with Franklin County farms, but Voiland said, “If we’re going to remain in business, we have to figure out how we do what we do, doing more with less labor. We’re trying to think if there’s machinery we can use to replace some labor in some places, if there are changes in methods or anything else we can do to make our labor go further, so we can get more done with the same amount of labor.
Voiland would like to see if it’s possible to shave as much as 90 minutes from each four-hour process, so that he can trim 80 to 90 workers at the peak of harvest between the Montague and Granby farms to 70 to 80 workers.
Unlike lean manufacturing, Morrison said, “I can’t just pull a carrot out of the ground and drive it to the store. Every time that product changes hands, it’s put down and stored and picked up and put down, that’s adding cost and time … to the process. My role with the farm is to help them find the fastest, most efficient, safest, cleanest method of getting the produce out of the ground and into containers to go to the store. All I’m trying to do is say, ‘How many steps do you really need to accomplish this process?’ If you spend 10 or 15 minutes setting up the packing area, and five times over the course of the day I have to move my packing area so someone can get into and out of the warehouse, that’s waste.”
Phil Korman, executive director of CISA, said that for farmers, who are unable to control everything from the cost of their raw materials and labor costs to the weather itself, looking carefully at ways they can cut wasteful parts of their operations can be a way of making their farmers succeed.
“We’ve heard from a lot of farmers that it’s an ongoing challenge” to pay for rising labor costs, said Korman, adding that many of them have always wanted to pay more. “A farmer may say that my fuel costs have gone up, my labor costs have gone up, seed costs have gone up, I have unpredictable weather,” he said. “It’s another challenge that keeps seemingly to make it a little bit harder to be a small local farmer in a global market. It makes sense for farmers to think about lean agriculture, something they have control of, making increased efficiencies in their operations to lower their costs.”
One of Voiland’s hopes at Red Fire Farm, which has a lot of turnover for entry-level jobs, is to improve its standard operating procedures and develop training materials using pictures to show exactly how to set up areas for different processes, with floor markings to show exactly where certain equipment need to be placed for peak-efficiency operations.
“It’s exciting,” he said. “There’s great potential. There’s a lot of work in the short term to think through all these processes and get our things organized, but the hope is if we do a good job at it, we’ll really save time.”