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The Oxford dictionary defines Synergy as the interaction or cooperation of two or more organisations, substances, or other agents to produce a combined effect greater than the sum of their separate effects – the synergy between artist and record company.

Table of Contents

What is Synergistic Business Design?

A Synergistic Business Design is:

  • Clean
  • Efficient
  • Profitable

The Synergistic system is deep and not just a load of fluff. There is also a lot to consider when designing a Synergistic Business. The concept works well for rural businesses.

This will change the way you think about your business. Every business places more effort on different processes, but they must all be considered.

A Clean Business

A Clean business is tidy, ordered and produces minimal waste.

Ensure that each workstation is clean and orderly. The 5 components are:

  • Sort
    • Eliminate whatever is not needed by separating needed tools, parts, and instructions from unneeded materials
  • Set in Order
    • Organise whatever remains by neatly arranging and identifying parts and tools for ease of use
  • Shine
    • Clean the work area by conducting a cleanup each morning. Light coloured paint to improve light reflection and make the workplace pleasant
  • Standardise
    • Sort, Set in Order, Shine Daily
  • Sustain
    • Embed 5S in the company culture
     

Zero waste is more than just a buzzword. The types of waste are:

  • Excess Inventory
  • Making defective parts
  • Unnecessary Movement
  • Over-processing or re-working parts
  • Over-production
  • Unnecessary Transportation
  • Unused skills and knowledge
  • Waiting
  • Inefficient use of raw materials

An Efficient Business

An Efficient business :

  • is vertically integrated
  • shows continuous incremental improvement
  • is process driven
  • has written processes for everything
  • manages workflow and inventory
  • does regular reviews
  • manages risks and issues

 

Is vertically integrated

Component costs increase rapidly every time a new enterprise is added to the supply chain.

Consider a tractor – there may be more than 20,000 separate components to be manufactured and assembled by more than 200 suppliers. Each business in the chain adds its own costs and profit margin to the purchase price of the sub-assembly.

A vertically integrated business creates and assembles the components itself. This will allow it to reduce its costs by at least the profit and administration for each production layer it owns. Further, it can manage its component construction to be delivered Just In Time (JIT) which is a large saving. Inventory has multiple costs.

So how does his affect rural industries?

If your business is producing secondary or tertiary products, the cost of the primary product is reduced to real costs.

Consider something as simple as a market garden producing preserves or soup. The cost of the raw materials is reduced to the real costs of production. Otherwise components are purchased from a retailer who has a supply chain of grower, manufacturer, aggregator then the distributor. Each step is less expensive if the supply chain costs are avoided.

This means that the costs are reduced allowing for a much higher profit. The output is then sold at the wholesale price.

Shows continuous incremental improvement

Kaizen is the core of a good business culture. A willingness to improve each process to make it better and easier.
This leads to staff thinking of ways to improve their work practices. If your business has 5 staff and each makes a 1% improvement each week, that is 5% per week. It adds up very quickly.

Compound interest is one of the most powerful forces in existence.

Is process driven

A process driven enterprise has documented Standard Operating Procedures (SOP).

What we are doing here is freeing you from micro-managing your staff. Each task is written down. It is clear and simple.

You request that bed 23 be weeded. Each bed is numbered to avoid mistakes because bed 24 was seeded last week and the seedlings do not look like the more mature plant – mistakes here could cause you to lose a whole bed and a week.

The staff understand what that entails because they have read the SOP. If you change the way a task is performed, the SOP is updated to the new way, the staff informed that the process has changed so it is done the new way.

Now you can bring in new people and they will easily understand what is to be done – your way. Their training is based upon the SOP.

Seems like a load of work?

If you have to explain each task twice to each person, you have spent more time and effort than it would to write it down once and you still have nothing to show for your effort – more efficient. It also means that you know how each process is done by your staff. Because it is written there is less “but you said” if you improve anything!

You and they both know that keelhauling is the natural result of not following SOP.

When people have ideas different to the current way, respect them, ask them to explain then test their idea then change the documentation if it works.

After a couple of cycles, the number of hare brained ideas will be reduced and the good ones will start to flow.

Now, because your staff know what to do and how to do it their time is used more efficiently and your time is freed to work ON the business rather than IN it.

You may also take short holidays without worrying too much. You will still need to touch base regularly, but that can be done with a phone call. Smart phones have cameras.

Has written processes for everything

The aim is to have all processes documented. This means that a process is not the responsibility of a person, but instead the responsibility of a role.

This makes training much simpler. It is better to have multiple people trained for any role.

Everyone knows their role, so knows their duties and how to perform them. Multiple people can fill a role and it is also easier if one or more are on leave. Short term promotion is easy as the duties of the new position are clearly defined.

Does regular reviews

Regular reviews of systems and processes keep a business on its toes. Constant incremental improvement is the compound interest of efficiency.
The reviews need to be constant by the people performing the procedures always seeking to make their work better, and more formally by a group seeking overall improvement. The group and the individual see different parts of the value stream. The individual is looking up whilst the group have the 10,000 foot view.
Weekly stand up meetings are an excellent forum for the individual to air their suggestions. They are quickly evaluated by those whose processes are upstream and downstream. If a change proposal is passed at peer level, it is time to test it.

Manages risks and issues

Risks and issues must be identified then paired with a detailed mitigation strategy which is included in the SOP under a disaster recovery procedure set.

Risk management is part of Tactical and Operational planning. If you do not have a well thought out risk and mitigation list you will be bitten by the next event. You need to be prepared for whatever is coming. Winging it is not a good plan.

Again on our market garden. It is about 1:30PM – just after lunch. There is a lot of noise – the staff are at the gather point – something is up. The leading hand is coming to the office.

The electrical transformer at the back of the processing shed has shorted and was making many sparks and much smoke. As per training, since the problem was electrical and the shed is metal, the processing area has been isolated at the main switch box. The risk of electrocution and serious fire has been averted.

A headcount shows that everybody is accounted for and there were no injuries. A couple are a bit excited as they were near the power box when the big bang occurred.

In the cabinet at the public end of the office is the Disaster Recovery Plan in a ring binder. This is the hard copy version. A soft copy version also exists on the computer network.

The first actions have already been accomplished. Now we follow the list and initial each and add a time-date as they are done.

Next is to evaluate the extent of the damage and take photos before informing the electricity mob whose emergency contact number is on the contacts list in the plan.

While that is happening, we need to report in to head office.

The next is to contact our nominated electrician to attend – quickly. His mobile is also in the contact list, as is that of the insurance representative. He will need to do a claim assessment and inspection ASAP.

The power supply to the cool-room is off and the preparation area smells strongly of smoke. The main delivery for two of our larger customers is due tomorrow morning – better tell them. Their numbers are also in the contact list.

As per the Disaster Recovery Plan, we may fall back to the old preparation area in the shipping container to prepare the afternoon’s packaging. Power can be provided by a couple of heavy extension cords stored nearby for that purpose. Space is a bit limited and there is no cool-room attached. Hopefully the sparkie can power the cool-room from some other circuit – did not think of that one. Update the plan for next time.

Time to contact our repair team to get an idea of time and cost. Their numbers are also in the contact list.

As the event had been foreseen, there was orderly activity (with mild panic). The list of actions has been followed and initialed with date-time for each one. As no-one was injured, the document will not go legal – but we were prepared if it did.

A Profitable Business

A profitable business has multiple income streams – Income Diversity. It also has a high return on investment (ROI) – it produces high ROI products.

Where possible, we produce secondary or tertiary products. These have a higher Return on Investment for only a marginally higher cost.

AntiFragile​

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Kanban Board and Card Systems​

Kanban is Clean, Efficient and Profitable.

 

Profit Sharing

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Business Life Cycle​

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