Tag Archive: cost-benefit


“Rise, rise again, until lambs become lions.”

It was one of those mornings. I was curled up in my undersized bed, head and feet stretching the mosquito net, eyes closed, freezing. The temperature dropped over night and all I had was my tropical sleeping bag. “Why did they have to run the trains so early?” I asked myself, after being woken up by the horns from the train yard one street over.

Right then, my alarm goes off… 5:15am. Patting all over the bed beside me I find it and quickly switch it off. “Man, I really don’t want to get up” are the first words I utter to begin the day. I switch on my headlamp and look up at the net above me brightly illuminated against the faint shine of the metal roof.

The last few weeks can be summed up with one word: “challenging”. After a real, detailed profit and loss analysis was done and the picture at my partner organization looked very grim.

Coming in at the beginning of the project, I knew margins were very tight, and that costs for transportation and the cost to store 50 kg bags of poultry feed were high. There are many brands of poultry feed to choose from and pricing is extremely competitive. The price of raw materials for poultry feed also seemed to be on the increase.

To increase growth of the business my initial assumption was to grow the capacity of the business by implementing systems, improving processes and training their staff how to use tools readily available to them on computers. Even if profit margins were small, increasing management capacity could allow opening more outlets, improve profit, increase employment, and better support poultry farmers. It seemed to be working. The accounting wasn’t yet clamped down but it seemed that increasing volume of sales would be effective and new locations were being sited for future expansion.

Then we crunched the numbers and it was clear that the underlying assumption of my strategy did not survive the latest price increases and drop in sales.

I began to question, could I have prevented this? What was in my circle of influence, my circle of control? Now, many of these people I’ve worked with are at risk of losing their jobs unless we find a way to bring things out of loss.

To know that the job is to make it all work against all these forces can make staying in and sleeping for the week seem really attractive. Then I think of my colleagues who face the same challenges day-to-day. What’s that we all believe in? “Courageously commit”… right…time to get out of bed.

The air was dry and the sun was racing upward. Chips of chicken could be heard through the greetings between farmers stepping off the bus. Stretching my legs felt great after the long drive to Chingola. Forgetting my sunglasses, I squinted through the crowd looking for familiar faces. I stretched out my hand to greet the poultry consultant we hired for the workshop we were providing that day for free, thanks to a local NGO grant provided for agricultural training. “Ahh…the turnout is not so good.” He told me. “What happened?”, “[The mobile provider] failed to send out the text messages to the farmers. Many did not know of this event.”

The host farmer welcoming other poultry farmers to the workshop on poultry management.

It was sad really. The farmers who arrived were learning the intricacies of poultry farming. How to maintain your flock, diagnose problems, and properly manage production. Some of these farmers were very young, fresh out of school, taking the first steps to generating their own income. Many others could have benefited as much as them, for free, if they’d only knew where to go.

I returned to the office the next day. Everyone was busy at their desks getting an understanding of the day-to-day business. “What are your sales for today?” asked one staff member over the phone, “How much feed do you have left?” asked another. All of this talk took time and all of that time cost the company a lot of money. The monthly bill for one of their phone lines was 3 times my monthly rent.

The main office phone and link between shops and the depot

The Problems

The main communications infrastructure of this business needed to be improved. They, unfruitfully, relied on others to inform customers of any new developments. They also relied on lengthy voice communications to get day-to-day numbers that they use to understand the current state of the business.

Cost
Talking costs money. They were paying a fortune for the amount of time that was being spent on the phone.

Time

The time consumed multiplied fast. It took time from head office, it took time from the shop managers, it took their time away from helping farmers, who now had to wait longer to be served.

Response Time

Some days would require rapid changes in strategy. Day-old-chicks are sold every Friday and they are predetermined to hatch 21 days earlier. The business has to ensure that all the baby chickens have a home, and all customers who prepaid will receive what they paid for. Shop managers in different areas need to rapidly coordinate their sales to ensure that the business as a whole will meet (and not exceed) that number. Calling shops one-by-one made it difficult to coordinate those sales from the main depot since it could take up to 2 hours to contact all the outlets.

Less Time for Customers

With the majority of time of the main lines used in lengthy internal conversations. This did not leave a lot of time on our lines for staff to call our customer farmers and talk to them about their flock or remind them of upcoming training events.

Point-of-Sale Equipment

None of the shops currently have computers on hand, nor internet. Power is also unreliable. However, all shops have access to cell phones and cellular service. (Many were provided with company phones)

Deploying Change

To reduce cost, increase response time and potentially increase our connection to our poultry farmer customers, we deployed a text message based system to communicate between the main depot and the various shops. One computer acts as the central hub of text message communication. It, currently, allows messaging of various groups of contacts and keeps records of any responses.

Initial benefits

  • The messaging rate is about 20sec/message. This allows us to reach 9-10 shops in under 4 minutes.
  • Cost to communicate with all shops is significantly reduced.
  • All incoming information is stored on a central computer in digital form rather than on lose sheets of paper.
  • Incoming information can be easily copied from text messages into spreadsheets already in use.
  • Shop managers can respond when they have down time, rather than being interrupted for many minutes at any point during the day.

“Anthony, this is really good. Soooo much easier”, Charles said, sitting beside me staring at his computer screen. “Look Anthony, almost all the shops have already sent in their sales numbers”. Later he was calling those who did not respond to his text messages trying to explain to them that sales needs to be texted in to the new number that we’re using as our “server”. I was excited to see that he was already reinforcing the new process without my involvement.

Stack of record sheets where staff used to record numbers that they were told over the phone

This initial step, though rudimentary, is important. We eliminate the big problems in one cost effective move, and set up a system that staff are already working to grow and reinforce, increasing the chance that this system will be sustained in the future. We were successful despite having no training for shop managers indicating that it is appropriate to the skill level of staff. The system launched with this one simple text message: “To all shops, you will now be sending in your sales to this number. We will no longer be calling for them.”

With this infrastructure in place, and the capabilities the system has, we’ll have the ability to grow towards cellphone based digital forms that shop managers can fill out and submit into the depot, have automated responses for farmers requesting the latest prices by text, inform our customers of upcoming poultry management training events we’re hosting and the list goes on.

Simply switching from voice to text opens the doors to many of these possibilities.

Implementing a system to improve communication and awareness of the state of the business… just one more item off the list of key deliverables.

“You need the simplest version of the idea in order for it to grow naturally in the subject’s mind. It’s a very subtle art. ” – Inception

Nation-wide change. That was the idea. Earlier at about 3:30am I woke up in Chipata and gathered my things. Without waking up the families I live with and moving past the pack of excited guard dogs, I had the watchman unlock the gate and I made my out. Walking past the eerily dark neighbouring school and towards the blinding headlights that would take me to the bus station, I reviewed my goals, my approach and the people I was targeting for this trip. Now, my head was leaning against the window of the bus that was taking me to Lusaka trying to ignore the Zambian music being played far too loud for 6:00am.

I kept looking out the window of the bus. I saw village after village along they way. Families were out in the fields early in the morning preparing land and planting seeds as the first rains have just started falling. I was committed to the idea that I could positively affect people across the entire country, those not unlike the families passing by my window. I knew my one chance was in Lusaka. One chance to improve operations at the headquarters of my partner organization.

Farmers preparing their fields in rural Zambia

Throughout my placement I identified “capacity” as their limiting factor to support and adopt agricultural agents who would then provide valuable advice and access to agricultural products to rural farmers. It’s almost comical how many articles, presentations and emails I’ve given people in the company addressing capacity issues. The topics were wide. An article on leadership styles from MaRS, presentations on identifying 7 Types of Waste and asking“why?” 5 times, an article from the Economist about Lean manufacturing were all part of my informational onslaught.

The main idea I wanted to spread was: Work on improving the processes within the business. Pushing people alone is showing diminishing returns as the business grows. Improve processes, adopt agricultural agents to reach and support rural farmers in Zambia.

Recommendations were provided in meetings to place focus on their processes and away from people. I was certain that they were blinded from the real problems in their operations by a single assumption. The assumption that the root cause of all their and problems was a lack of initiative from their staff.

View of the warehouse and the main office (right) from inside a supply truck.

Thus far, I’ve been unable to change that viewpoint. I’ve been unable to get staff and management to shift their focus towards identifying root cause problems that are strangling their business. Resources and theory were not enough to illicit a sense of urgency amongst the staff that matched mine. When I looked at the processes and looked at the reasoning behind the protocols seen in the business, I was almost demoralized. I was suffering my own Cassandra Complex,  “the agony of foreknowledge combined with the impotence to do anything about it.” -12 Monkeys

The resources I provided were too abstract to grasp, too abstract to connect to what they were experiencing on a day to day basis. I needed to provide something more tangible that their minds could latch onto. From there, I could take them step-by-step towards thinking about systems and their efficiency. I had to take a step back to step forward.

Sharing different ideas on creating a production line, from what we can implement today, to the ideal.

I started to grab people individually to talk one-on-one. It was almost militaristic how individuals in different roles and levels of power were ambushed. Pen and paper at the ready, they were attacked with drawings and discussions about problems in their business system. I fired off different ideas on how to solve these problems opting to provide concrete ideas above providing theoretical frameworks and tools to analyze these problems. After seeing how receptive people were to passionate speeches,  I pulled others aside and gave preacher-like motivational talks to those in key roles and those showing extremely low engagement in the business. Again, I was fighting a losing battle on this front. Problem-solution examples didn’t seem to take and the extra motivation would easily dissipate when it resulted in nothing. I had to change my delivery.

Throwing down my stationary, I stood up from my leather chair and walked out of the office towards the warehouse. The sun was high and hot as I made my way across the parking lot with the warehouse’s open doors in front of me. I could only see darkness inside against the bright concrete ramp leading into it. I was certain of only two things that would happen in there. My clothes were about to be covered in agro-chemical dust and  I was going to setup a flow production line within the next hour.

My eyes adjusted to the darkness and a predictable scene emerged. Workers were scattered all over the place working alone on the floor with dozens of open bottles in front of each one. Every worker was directly exposed to chemicals, the dangers were high, the speed was slow and it was impossible for a supervisor to determine if they were behind demand before it was too late.

Batch Production... dangerous & slow. But workers feel like they're producing more.

Far in the back, I saw a table that was being used to take up space, collect dust and be esthetically displeasing. I had some workers take it out into the open and with help from the supervisors we set up a production line. Production speeds doubled. Now, only one person had to be in direct contact with chemicals on a four-person team. The chances of chemicals spills were reduced since there were only one or two open bottles on the line at any given time. An improvement from the hundreds that were on the floor.

Never invest in a prototype any more than you need to. Prototyping is about speed and iterating. I found this table in the back of the warehouse and decided to build a process on top of this instead of going through the long processes of requesting workbenches.

Admittedly, I did this partly for myself. I understood it was far removed from helping people like those I saw from the bus. But, making a work environment safer, faster without using money is really fun. Seeing employees happy that they can work easier and still output more is satisfying. After a few days of attempting to drive a culture of systems thinking, I desperately desired for something…anything… that I could tack onto my sparse internal list of accomplishments during this trip. Within 30 minutes stations were set and the first completed products began to appear.

“What do you feel about this process?” I asked everyone. “It’s a very good idea, it’s brilliant, it’s faster.” Timing this new system versus the previous batch method of production proved just that. I dusted myself off as best as I could and I walked back to my desk leaving footprints of dirt all over the white tile flooring. “Mission accomplished” I thought to myself with a smile packing my things to go home for the day. Tomorrow, I would bring more management and staff to the line and use it as a platform to teach about systems thinking to get more staff to think about improving their operations.

Workers producing agro-products from start to finish. Faster, safer, more flexible and using less floor space.

It was Saturday morning and I arrived at the office excited to see what has become of the production line. I walked into the warehouse and my reaction to what I saw could only be described as an internal dialogue consisting of a disjointed series of inappropriate words and extremely offensive language. I bit my tongue and smiled at the supervisor who was standing in the middle of the warehouse.  After greeting him a warm good morning, I asked him why I was standing in a warehouse full of workers who were again on the floor working alone on huge batches of open bottles.

“So why are they doing it like this?”

“They want to knock-off early, it’s Saturday…”

“Wasn’t the process we setup yesterday faster?”

“Yes it was, it was a really good idea, a good process.”

“So why are they not doing it today?”

“Because… you see, they have a lot of work to do, and it’s a Saturday and they want to go home on time.”

“But the other way yesterday is faster?”

“Yes, but I thought just for today… it’s a Saturday and they want to go home. We’ll do it like this today and setup your process on Monday again.”

It took a lot of effort to hold my smile and hide my frustration. I probably looked like a freakish figurine as I stood there amongst the open bottles of chemicals. The air felt heavy as the chemicals gave a distinct weight to my breathing. “This line of questioning is going nowhere.” I thought.

I decided to walk away and personally time two workers who were a small step ahead of the pack by deciding to work in a 2-step process:  filling and capping bottles. However, they ignored the remaining tasks of applying labels and packing the bottles that will be required later. Staring directly at my watch, I sat in front of them. I wanted to make them to work as fast as they could for this test without having to speak out loud for fear of what I might say after this morning’s disappointment.

I saw that it took 11 seconds to fill a bottle and 3 seconds for the following person to put on a bottle cap. Eight seconds were spent waiting for each bottle. That didn’t sound like too much until I saw the scheduled target for a typical day and calculated the percent-time wasted. Eight-hundred bottles was the target written on the schedule on the wall. I multiplied and it results in 1 hour and 46 minutes spent waiting. If a bottle was filled and capped every 11 seconds, 72.7% of that time was spent waiting.

Fears realized... a chemical spill. Adds danger, wastes product, creates downtime, damages completed products nearby, wastes time by forcing people to clean up. All these wonderful costs so that one can gain the benefit of being able to pay staff to produce product more dangerously at a slower rate.

With those numbers I went to a senior manager. I was almost certain that the idea to focus on systems and processes would begin to take hold, bringing me closer to that elusive nation-wide change I was seeking.

“Oh wow! Really?” was the manager’s response.

“Yes… it is THAT simple.” I thought to myself.

“Yes, that process you did yesterday was very good. It seems it would save us time.”

“Almost there… we setup a process and then saw drastic improvements. Now, please, just make the connection that we need to focus everyone’s efforts on improving the processes within the business…C’mon!” I said to myself with the tension that can only be matched by someone who is one number away from winning the lottery.

“You know, I’ve always said to those supervisors in the warehouse that they should tell the workers to work harder and closely watch them. People are just very lazy there and it causes many problems.”

Holding myself from hitting my head down on the desk, I replied… “Oh… really?”

From theoretical concepts, to tools and frameworks, to one-on-one talks on actual tangible problems with specific solutions, to a physical process in the warehouse…  my options are dwindling.

Tomorrow is another day…

UPDATE:

In reality, I believe the time-frame I gave myself to change the mindsets of multiple people was unreasonably short. It’s very difficult to, in only one month, change the mindsets of people who have been working a certain way for multiple years. Everyone in my partner organization is incredibly hard working and have 10-12 hour days 6 days a week. Many are out of the office tackling the various problems that appear on a day-to-day basis. Some individuals can work 20 -48 hours with only a few hours of sleep.

The fact is exposure to systems thinking is minimal. I’ve yet to find a credible systems engineering, industrial or manufacturing engineering program in Zambia. To gain a good understanding of processes and acquiring the ability to see everything as a process that needs improvement requires familiarity with a wide variety of supporting concepts. One has to have a good grasp on work-flow, time, production rates, corporate culture, supply/demand, identifying wastes, human psychology, ergonomics, group facilitation and many more concepts before they can really master process improvement at all levels from the shop floor to nation-wide operations.

If improving processes here in the Lusaka headquarters was my primary goal, I should have been embedded with the staff for at least 2-3 months to understand the values and decision making processes of all individuals involved in the business. Language, previous exposure to concepts and cultural differences are barriers to me understanding and changing the thinking of management here. I haven’t positioned myself well to overcome those challenges by giving myself only one month to initiate actions. Immediately initiating projects without taking the time to sit down and reconnect and build trust amongst the staff reduces my chance of success.

However, I sacrificed my effectiveness at this level to focus my time on the ground level. Creating coupons to improve awareness of regional farmer needs (market demand) while giving them lower prices and creating charts to help farmers and agents identify what is needed to protect their crops was my focus. It was my belief that those two projects would immediately help my target beneficiaries while being visible to the entire market. That market visibility was important to me because our team has the theory that market forces and competition can be used to scale-up those interventions. So far, it looks like one competitor has seen those problem-solution charts and have decided to make their own charts… increasing access to knowledge to farmers across the sector.

Ideally, we would have people on the ground and people in the management level of our partner organizations to maximize our impact.

UPDATE 2:

Turns out the process is back up. I didn’t intervene at all this time which is really promising for this to become sustained. I’m glad. I like the idea of doing more for less effort and being safer while we do it.

Update 3:

Saw this interesting article on my Facebook feed today related to the concepts I attempted to demonstrate: In Manufacturing, Efficiency Equals Sustainability

After settling into Chipata, I realized that I really love the whole bike culture here. Bicycles are used as taxis, transport for household goods and they are even used to transport items as large as sheets of steel roofing and as heavy as large bags of charcoal. It’s great to be able to walk to the main road, point in any direction and someone with a bike and a padded carrier will swing by and take you wherever you want to go. The price is usually somewhere between 1,000 to 5,000 Kwacha (or about 20 cents to a dollar).

Biking past the road side market

Just last week I brought my own bicycle to Chipata and decided to bike out to Chinjala to meet an agro-agent I’m working with. When I was heading out alone I began to notice different things. I saw how much bicycle traffic there actually was. I was  trying to dodge bicycles speeding up to beat the robots (traffic lights). I was also dodging bicycles who were slowing down to drop people off at the road-side market. A taxi driver told me that this is a fairly new phenomenon. “These bicycle taxis, I don’t know where these people come from, but they started about 5 years ago.”

Avoiding bicycles, traffic and pedestrians. I understand taking a photo while doing the above is dangerous :)

There is a fairly good infrastructure here to support bicycles. Everywhere in town were dozens of little shops (4 wooden poles and a thatched roof) with tools and pumps to bring your bicycle back into shape. Out in the rural areas there were still shops along the dirt road the entire way. When my handle bars became lose and practically fell off, I was also able to veer into a farmer’s plot and ask him for help since every farmer has the tools (and hospitality) to fix a bicycle in need.

Repairing a Bicycle in Chinjala (20km West of Chipata)

The popularity of bicycles here in Chipata and the Eastern regions of Zambia are a stark contrast to other places in Zambia.  Bicycles lose their popularity the further West and closer to Lusaka I travel.

I feel that a few things that facilitated this market are related to:

  • Infrastructure
  • Access
  • Culture
  • Proximity to markets
  • And a niche customer need

Infrastructure:

Some roads here are paved, and the majority have wide shoulders that a bicycle can easily turn into to avoid the large trucks and fast cars that drive by. Rural areas are also have some hard gravel and dirt roads that are passable by bicycle and difficult for vehicles.

Access:

Bicycles in Chipata are cheap. With one glance you can see that there is one bicycle that has the dominant market share: Eagle. These are about ZK500,000 and are supplied by the large Eagle bicycle factory here in Chipata. Almost every store has one on sale.

Their popularity has set the standard of bicycle parts and knowledge in the entire district. The design is simple and can be repaired easily by anyone. Parts can be found in almost every hub in the district. Tools to repair bicycles are within a walk away from everyone’s home.

Culture:

Bicycle taxis are accepted as a cultural norm here. It’s passed the tipping point where it’s almost strange not to hop on a bicycle taxi when they’re so available and so cost effective. However, if I was approached by a bicycle taxi in Lusaka, I would be incredibly suspicious of this person and wondering if he was out of his mind.

I feel that the familiarity of the bicycle culture can attribute to the spread of their popularity geographically. I hear (but haven’t confirmed) that the use of bicycle taxis began in Malawi and is spreading Westward.

Proximity to Markets:

Outward from Chipata, you can reach many town hubs with only about 50km of bicycling. In Kalanje, which is 50km West of Chipata, people can be seen bicycling all the way to the Malawian border, which is an additional 15km East of Chipata, to import goods. There is a large variety of markets that are close enough to be accessible by bicycle making bicycle based trade very attractive.

Customer Demand:

Everyone in Chipata needs cheap modes of transportation. Bicycles can get anywhere and without the hassle of fuel and licensing fees. With a lack of mini-buses and affordable “on demand” local transport, bicycles serve many people’s needs.

For bicycle taxie, I believe the same factors apply. When using mini-buses for local transportation, their availability is far too sporadic. When using regular taxis, the cost becomes to high. Additionally, these taxis are attractive  because to purchase a bicycle can be a hassle. After paying the ZK 500,000 it has to be stored and protected from theft and it also has to be maintained.

Bicycle taxis provide a hassle free and cheap mode of local transportation. This fits with what I’ve been told about the whole market: that Malawi was the source of this business. It fits because the cost to hire a regular taxi is much higher and overall poverty is more prevalent in Malawi.

Racing West down the dirt road towards Chinjala on my Zambike

Bicycles are Just Awesome:

Bicycles are an affordable, culturally accepted, and versatile mode of transportation. The infrastructure and the amount of people who are now making a living using bicycles and others who are making a living supporting their needs is pretty amazing. All people are benefiting from this: the small scale remote farmer has independent access to far more services and markets than ever before, people who live in town have access to affordable transit, others have more opportunities to generate income through providing bicycle services, even others have more opportunities buying from and selling to a larger market, and everyone has a little bit of a break from breathing the exhaust of vehicles that would fail any emissions test back home. I’m pretty excited to see how this whole market and industry grows over the next few years in Zambia.

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