Becoming a best in class business

The performance of PKW Farms has been put in the spotlight as the business pursues its strategic goal to become a Best in Class Taranaki dairy farmer. Polly Catlin-Maybury finds out how it stacks up on the dairy industry stage.

The hallmark of success for any business or individual is the relentless and determined focus on continuous improvement.

Being ‘good enough’ or resting on your laurels just doesn’t cut the mustard when it comes to being the best.

Which is why PKW’s dairy farms have been put under the performance microscope to evaluate where their strengths and weaknesses lie.

“Our farms are not under-performing, far from it,” says Shane Miles, PKW’s General Manager Ahuwhenua. “Production targets are being reached and the bottom line is where it is supposed to be. We are on budget and on track to achieve what we planned for the season.”

“But there is no room for complacency. Our strategic goals are very clear to become Best in Class in the industry and so there is a need to pursue improvement and progress. The bar is set very high so it’s not an achievement that will just fall into our laps.”

While PKW’s farms are already part of the DairyNZ benchmarking initiative, the Board felt that a totally independent perspective would provide additional insight and comparison for the business.

Above: Joe Hanita and Bex Kelbrick look over data on new farm extension Te Kāhu.

Top: Silage feed used to iron out variations in pasture growth and quality.

Above: Dairy cows coming in for milking.

“We know how well each farm is doing compared to the others internally within the organisation, but without an external marker, it’s a very insular way of measuring success,” says Shane.

“We wanted a comprehensive ‘big picture’ of the industry and to know where we stood in the line-up. To be the best, you have to compare yourself to the best.”

With this in mind, the PKW Board asked agribusiness consultants BakerAG to facilitate a benchmarking exercise in August 2019 that would examine the PKW’s 13 dairy units, evaluate their systems and performance and then compare them to dairy farms across the country.

“Optimising performance is all about finding where improvements can be made and BakerAg can deliver that information to us in a way that allows us to evaluate where we stand in the rankings,” says Richard Krogh, Chair of the PKW Farms Board. “Strategically, our goal of being Best in Class is vital to being able to deliver on the expectations of the PKW Committee of Management and our shareholders.”

“As a significant Māori business it is important that we not only focus on traditional farming performance, but also measure ourselves using Te Ara Putanga (PKW’s Outcomes Framework) to ensure we are contributing, where we can, to the Incorporation’s aspirations and outcomes. Pursuing these twin goals is a key focus for the Board,” says Richard.

BakerAg administrates a Dairy Systems Monitoring Group which takes financial and production information to create a monthly report that tracks individual farm performance.

Above: Shane Miles, General Manager Ahuwhenua reviewing the new improvements being made on Te Kāhu.

“There are a considerable number of farms within the system, situated all over the country – including Taranaki,” says Shane. “As with anything, the more data you have, the more accurate the final picture, so we are confident that BakerAg can tell us exactly where we are and what we need to do to improve our position.”

The results of the number crunching have shown that some of PKW’s farms are performing in the top 10% of the industry range.

“We are very proud of the results these farms have produced and it is encouraging that we are on the right track when it comes to decisionmaking and implementation,” says Shane.

The results of the data analysis show that some PKW Farms were performing very well, and indicated some areas of improvement.

“While the results didn’t surprise us, they have provided us with a much clearer picture of where the improvements for each unit are needed, which gives us the ability to focus our efforts where they will do most good,” says Shane.

“Every farm has something to work on in order to take them up into that next level of performance.”

This evaluation process will be carried out each year to enable PKW Farms to build a full understanding of what is happening within the business and the gains it has made.

“It is important to remember that what we do each day isn’t a carboncopy factory production line of the day before,” says Shane. “Farms face their own particular challenges every season so a disappointing performance this year doesn’t mean the farm is necessarily failing as a whole.”

“However, these assessments do give us the reasons why performance may have been less than expected and what can be done to improve things in the future.”

Now the annual results have been analysed, action plans for each farm are being implemented with a focus on efficiency and effectiveness.

“Driving positive change is always an exciting thing to be involved in, and our kaimahi are fully engaged in putting a new approach or system into their daily routine,” says Shane.

“Our staff want to see their farms perform at the top of their game more than anyone else, I think, so this benchmarking exercise resonates on a very personal level for them. They welcome the insight and feedback BakerAg delivers.”

Joe Hanita, PKW’s Chief Financial Officer, said the benchmarking exercise was not only a strategic move for PKW Farms, but also fulfilled the Incorporation’s core strategic aim of being a Best in Class Corporate Investor.

“You cannot expect high performance without being prepared to invest in your businesses,” he explains. “Committing to independent analysis gives us the ability to drill down to see how each individual farm is doing, as well as being able to see how PKW Farms performs against its peers.”

“We look forward to seeing the improvement gains – both on farm and in financial performance.”