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Espacios. Vol. 37 (Nº 17) Año 2016. Pág. 13

Lean Production System: Evaluation in a Laying Poultry Farm

Sistema de produção enxuta: Avaliação em uma postura granja

Eduardo Guilherme SATOLO 1; Laiz Eritiemi de Moura HIRAGA 2; Lucas Furlani ZOCCAL 3; Gustavo Antiqueira GOES 4; Wagner Luiz LOURENZANI 5

Recibido: 25/02/16 • Aprobado: 22/03/2016

Content

1. Introduction

2. Theoretical Background

3. Research method

4. Results

5. Conclusions

Referênces

1. Introduction

The agribusiness, according to Zylberstajn (2013), was created to designate the inseparable connection between the agricultural production activity and industrial activity, both the inputs to it addressed, either to the processing of production it has generated. In 2014, year in which the exported volume and average prices in dollar presented, respectively, a small decrease of 6% and 1% compared with 2013, the agribusiness sector was responsable for generating a $98 billion revenue in exportation in the Brazilian economy, contributing to the surplus of trade balance in approximately $80 billion (Cepea, 2014).

Such importance of this sector carries the need for continuous organizational improvement, resulting in competitive gains in a global market where there is the need for continuous search for the optimization of organizational processes. Various management models, philosophies and management strategies have been developed over the past decades in order to achieve a more effective system. One of these management models which presents major highlight is the Lean Production System.

Lean Production, which has as its origin the Toyota Production System, recommends the constant pursuit of perfection through continuous organizational improvement and is supported by a set of techniques and tools that help on analysis, monitoring, control and management of various organizational aspects of production in order to reduce and eliminate waste in the production system.

Studies on Lean Production Systems in literature are diverse and wide, but not for the agribusiness sector. In a recent survey, Hiraga, Zoccal and Satolo (2014) identified six Brazilian publications that relates the implementation of Lean Production systems with the agribusiness sector. It was further observed that two of these studies have similar characteristics to metal-mechanic sector, being focused on equipment suppliers companies, with four cases portraying the processing of agricultural products.

Such a survey carried by the authors, although restricted to Brazilian researches, portrays the lack of studies in national scenario.

In this context of uncertainty about the current stage demonstrating the applications of Lean Production systems by the agribusiness sector, this article aims to report a case study relating the use of philosophy, techniques and tools of Lean Production Systems in a laying poultry farm.

The poultry industry is one of the most important elements of national and international agribusiness. With a production of 34,730 million units of eggs, corresponding to 4% of world production, the domestic production of eggs has been increasing in recent years, having occupied in 2012 the seventh global placement (Anualpec, 2014).

The quality of eggs and technological investment in the sector have been showing the development of the poultry industry that is symbol of growth and modernization of agribusiness in Brazil. According to data from Brazilian Yearbook of Poultry and Swine Industry in his last published edition, it was shown that in 2012 the export of national product reached 26,800 tons, which represents an increase of 61.2% compared to 2011 and with revenues of $42.6 million.

Besides obtained economic returns, it is worth mentioning the paradigm change regarding the consumption of eggs in Brazil. According to data from Uba (2014), the annual per capita consumption in Brazil has increased from 149 to 170 eggs between 2010 and 2013, representing an increase of 4.5% per year. However, the consumption is low when compared to other countries, such as Mexico, with a consumption of 374 eggs per capita per year (Uba, 2014). Yet, this slight increase demonstrates an upward trend for the coming years, especially because of the campaigns aimed at promoting consumption of eggs (nutritious and healthy) and also the replacement of egg in diet as an alternative protein with a better cost and benefit relation (Mendes, 2014).

These data show the importance of the laying poultry segment in Brazil and the great potential for growth. It is therefore up to study and assess how are the production management practices in these industrial settings, which have their own characteristics, but which are nonetheless facing a competitive and fierce market.

This article is divided into five sections to present the results. This first section presents the research contextualization and the gap holding up its achievement. The second section theoretically based three central topics of this research concerning Lean Production systems, the characteristics of an agribusiness production system and the national sector of egg production. The third section presents the research method and its stages. The fourth section reports the conducion of this case study. Finally, the article ends with the fifth section presenting the conclusions and perspectives for future works.

2. Theoretical Background

2.1. Brief foundation of Lean Production systems

The Lean Production System has a philosophy that aims to identify and minimize or phasing out sources of waste based on five key principles: the definition of (i) value from the customer view and their needs, that determines (ii) the value chain, which are required activities to offer the product to the customer with the lowest level of wastage. Then the product is manufactured using a (iii) continuous flow, which is triggered only when the client performs the request. That is, using the logic of (iv) pull production. Based on these four principles and the use of continuous improvement (kaizen) or radical improvements (kaikaku) the fifth fundamental principle is reached, which is the (v) system perfection (Calarge et.al. 2012).

These waste minimization or elimination (MUDA in Japanese) are crucial for companies to optimize their activities and to eliminate times and processes that do not add value and are classified into seven types, namely: overproduction, waiting, transportation, motion, over processing, rework and inventory (Vinodh, Somanaathan, Arvind, 2013).

However, the creation of the Lean Production System has gone at the end of the Second World War, when the Japanese industry had to rethink their production model, appearing then the Toyota Production System (TPS) that, due to the shortage of productive resources, sought to produce with the lowest possible cost, especially by combating the so-called wastage (Singh, Singh, 2015).

But the term Lean Production has been defined in late 1980s in a research project at Massachusetts Institute of Technology (MIT), which studied the global automotive industry, with the main focus on the Japanese Toyota model in order to map out the best industry practices, by means of interviews with employees, trade unionists and government officials (Lucato et. al. 2014).

The adoption of the Lean Production System is also the target of studies by several authors proposing studies to report the steps of its implementation and methods to ensure their success through a structured conduction of the entire process.

After 20 years studying the Toyota Production System, Liker (2007) is one of the largest reference work when referred to the implementation of this system. During this period, Likert identified 14 management principles that drive the Lean Production techniques and tools.

These principles, according to Liker (2007), can be grouped into four main categories for organizational assessment, as follows: philosophy category covers the principle 1; the process category covers principles from 2 to 8; the employees and partners category includes from 9 to 11; and problem solving category includes the principles from 12 to14, all described in Table 1.

Table 1 – The 14 principles for evaluation of the Toyota Production System implementation.

Source: Liker (2007)

The implementation of Lean Production system in organizations uses various techniques and tools, which should take place in a coordinated and structured way (Pettersen, 2009); (Hunter, 2004). These techniques and tools assist this process of minimization or waste elimination by bringing results such as: reducing lead times, cost savings, quality improvement and increased productivity, making them agile and more competitive (Walter, Tubino, 2013); (Saurin et. Al. 2010). Thus, these techniques and tools are a valuable aid in improving a product or process in a wide variety of organizations (Feld 2001).

Walter and Tubino (2013) gathered in a single material 48 papers from national and international literature published between 1996 and 2012, and noted the usage frequency of Lean Production techniques and tools by organizations in various sectors of the economy, as highlighted in Table 2.

Table 2 - Frequency approach of the techniques and tools of Lean Production System

Source: Adapted from Walter and Tubino (2013).

Among 28 such tools and techniques commonly assigned to Lean Production System, Walter and Tubino (2013) identified 18 and five of which that are evidenced: Pull Production and Continuous Flow; Single Minute Exchange of Die (SMED); Supply Chain Integration; Total Quality Management (TQM) and Zero Defects; Multifunctional workforce.

2.2. Characteristics of an agribusiness production system

The agribusiness production system, according to Watanabe and Zylbersztajn (2011), is constantly changing along with its concept. Thus, the agribusiness system concentrates its study to examine the relationships between the different players in a chain in order to design business strategies and public policies. However, regardless of the system diversity, the focus of this paper is centered on possibility of the projection of business strategies.

Batalha and Silva (2008) points out that much of the modern management tools have been developed for sectors other than the agribusiness. This may be the reason why there are difficulties to implant the techniques and tools, as well as a resistance on the researchers side to adapt, implement and analyze the use of these in agribusiness environments.

Authors from agribusiness sector demonstrate which are the specificities of the agribusiness production systems and these are highlighted in Table 3.

Table 3 - Specificities of the agribusiness production systems

Source: Prepared by the authors.

The authors of this research also adds another specificity not highlighted in Table 3. It is about the number of raw materials suppliers. Every organization requires raw materials, which serve as inputs in the productive system and which are transformed in the processes to generate the goods. Many of agribusiness segments have a large number of raw materials suppliers, such as the segments of: milk, meat, sugarcane, rubber, soybeans, among others. This brings a high degree of difficulty for management and integration of these suppliers with the agribusiness.

2.3. Characterisation of egg production system

The laying poultry farm has been taking an important role in the national socio-economic context. By being a low cost animal protein, the eggs have been increasingly consumed by the Brazilians (Uba, 2014).

Technological development in egg production has become reality with the development of techniques to achieve higher productivity at the lowest cost (Kakimoto, 2008). Thus, the food, nutrition, sanity, environment and management must be harmonized in order to facilitate the full potential expression of commercial laying hens (Augusto, Kunz, 2009).

The bigger producers of eggs are vertically integrated backwards, featuring several production units, feed factory, raising chickens and eggs factory (Martins, 1996). This results in that producers are mostly independent by performing the preparation of their own feed and working with traditional open sheds. However, the gap between small and large poultry farmers are notorious when it comes to the automation of egg production (Covre, Fassarela, 2010).

The small poultry farmers still perform activities such as the collection of eggs and distribution of the feed manually and in rudimentary sheds. In contrast, there are big producers whom are choosing for climate adaptation and facilities automation, owning automated plants with electrical classification that, by sensors, grade and pack eggs decreasing waste and consequently costs (Donato et. al., 2009); (Covre, Fassarela, 2010). Nevertheless, regardless of size, the process steps of the egg production (Figure 1) are similar in any factory, diverging only in certain aspects, for example, the implementation of technology and automation.

Figure 1 - Flow Chart of egg production system

Source: EMBRAPA (2004)

The egg production system illustrated in Figure 1 can be described as follows (EMBRAPA, 2004):

1. The first step uses automated conveyors to collect eggs from the healthy poultry daily, packing it in plastic or paper trays. At the moment of collection, the employee performs a pre-assessment of eggs by separating the good ones from the so-called "eggs of second line" (thin shell, cracked, broken, deformed, not in shell, dirty and stained).
2. The eggs of second line are dropped or forwarded to the liquid egg room, where the eggs are broken and stored in liquid condition to be sold to the food industry. However, the eggs in good condition are forwarded for classification room, where they are located on machines responsible for sanitizing, classifying and, finally, packing them.
3. During processing stage, the eggs go through a step called candling that means to observe the egg from inside through a light source in a dark environment. This procedure helps to check for possible defects in shell (such as cracks, roughness, pigmentation, etc.) as well as the egg quality (abnormal air chamber, bloodstain, gem duplicity and presence of foreign elements). It is therefore possible to detect in details the not visible nonconformity of the product. At this stage the eggs with defects are removed and are packaged in trays, according to its defect and then forwarded to the liquid egg room.
4. The commercial eggs are categorized according to size and weight based on required specifications, nevertheless, if they do not contain the minimum characteristics required, they are considered unsuitable for fresh consumption and forwarded to be used only in industry.
5. Finally, after being classified, the eggs are packed in trays or cases and placed in standard cardboard boxes which indicate the group, class and type. As a final process they are put on pallets and forwarded to the storage room/shipping.

3. Research method

This study aims to examine contemporary events in a real and recent context, in which relevant behaviors can not be manipulated and so far have not been clearly defined in literature. Furthermore, there are more variables of interest to be investigated than data to be collected, thus characterizing as a case study (Yin, 2010); (Miguel, 2011).

Considering the purpose of the research, this study has the characteristic of a case study as a theory construction, since identifies and describes the key variables, highlighting the links and the reasons for the relationship between the studied variables (Voss et. al., 2002). Typically, this kind of research is based on application of questionnaires in order to perform a triangulation, in other words, the use and combination of different methods to study the same phenomena. To validate the triangulation process it was also used the on-site visit, the observation and the document analysis (Voss et al., 2002.); (Miguel 2011).

According to Miguel (2011), the conduction of a case study occurs through six main steps which have been adopted for this work. These steps are illustrated in Figure 2 and will be detailed on the results topic of this work.

The selection of the case study in this work was restricted to poultry farms located in State of São Paulo, which accounts 26.5% of national production of eggs. In particular, the city of Bastos stands out in national and state scenario representing 8% and 30%, respectively, of egg production. Known as "national capital of the egg", Bastos had in 2013 a production increase between 10% and 13%, with 190 eggs per second. This advantage was mainly generated by the automation of poultry farms and the modernization of its eggs processing rooms, reflecting in higher productivity and quality of eggs (Avisite, 2014).

Figure 2 - Steps for the case study conduction

Source: Miguel (2011).

Table 4 provides some comparative data that recall the importance of State of São Paulo and the city of Bastos in the laying poultry farm segment.

Table 4 - Brazil, State of São Paulo and the city of Bastos: Commercials Eggs Production, from 2010 to 2013- Quantity of chicken eggs (thousand dozens)

Source: IBGE, Research Board, Agricultural Coordination, Research of Municipal Cattle 2010, 2011, 2012 and 2013.

4. Results

Founded more than 50 years ago and currently being under the control of the second generation of the family, the Research Unit is a traditional company that produces eggs in the city of Bastos. It has recognized quality of eggs produced, which received awards in various editions of Egg Quality Contest.

Among its principles can be highlighted investments in quality, technology, sanity, poultry nutrition and processes automation. Currently, it has around one million laying hens producing nearly 600,000 eggs per day, which corresponds to 7.6% of the total production of the city of Bastos. To manage the whole process, the Research Unit has approximately 35 employees (considered as a small business).

The interview was carried out with the plant manager, responsible for the production management of the company (brood chicks, agricultural and industrial). Beyond the interview (lasting about 1h45), observations were conducted through on-site visit and documental analysis, which allowed the triangulation of information.

Based on this set of information it was generated the Figure 3 which depicts the perception of the application level of each Lean principle, from the foregoing by Liker (2007).

Figure 3 - Graphical representation of the Research Unit performance for each Lean Production System principle

This perception of application level of Lean Production System principles is justified by the actions performed and the limitations presented by the Research Unit, described in Table 5.

Table 5 – Explanations about the perceptions of application level of Lean Production System principles

Source: Prepared by the authors.

Based on these informations, by means of Equation 1, it is possible to establish the level of adherence of the Lean Production System for each category established by Liker; and the level of final adherence, by means of Equation 2, as illustrated in Figure 4.

Equation 1

Equation 2

Figure 4 – Level of adherence of Research Unit to the Lean Production system (by category and overall)

Source: Prepared by the authors.

Regarding to the Lean Production System principles described by Liker and used to evaluate the Research Unit, it is noted that in philosophy category (includes the principle 1), the Research Unit has good initiatives, but there is a certain shortage of the completing of long-term thinking, being a limitation, since the decisions are based on requirements and not by strategies.

Regarding to process category, a large number of actions are carried out and evidenced by good indexes obtained on the principles 2, 3, 4, 6 and 8. However, it is noted that there is still room for improvement, especially on the principles 5 and 7, in which currently there are no actions being carried out by the Research Unit.

In employees and partners category, we can see a satisfactory level of integration with suppliers and also a leadership development (principle 11). However, with respect to creation of leaders whom assimilate and are inspired by the Lean philosophy, there were no actions identified in this direction (principle 9).

Finally, in troubleshooting category, it is noted that the same is done in an informal manner and by the person responsible for the sector. But the organization already started actions to make the continuous improvement process a practice in the organization.

Concerning the use of Lean Production techniques and tools, the Research Unit employs a set of six, and four of them are focused on the process (Lot sizing, poka yoke, pull production, autonomation/jidoka). Such fact highlights the good performance in this category by the Research Unit. The other two tools are: suppliers' integration and empowerment.

About the specificities of agribusiness production system, cited by Battle and Silva (2008), the laying poultry system analised in this study suffers important influences on some items described in Table 6.

Table 6 - Influence of the specificities on agribusiness production system of laying poultry

5. Conclusions

This case study aimed to describe how Lean Production principles are being applied in an agribusiness system of laying poultry and allowed to glimpse some important considerations on this topic.
It was noted that the principles of Liker (2007) were essential for carrying out the survey and mapping of information that guided this research. Such fact is justified because the proposal of the author does not restrict its use to units that have formalized the Lean Production System in its organizational environment.
The research unit has demonstrated that even, theoretically, not knowing the Lean Production principles, carries out activities of the method.
Overall, the research unit has a good adherence level to the Lean thinking and practices (84%), having as emphasis on its organizational environment the principles associated to problem solving and to processes categories. The organization needs to formalize, largely, the initiatives already undertaken to improve the indicators related to this process.
Regarding to Lean philosophy, the organization already has well underway the process of diffusion of his thinking, fitting for upper management carry out the process of formalization of this practice in its organizational environment.
By having a highly verticalized process, the research unit has no actions being developed with suppliers, which is one of the reasons for the low score in the relative principle (10), but there are actions in order to disseminate the Lean philosophy in the organizational environment and therefore the development of new leaders may be carried out to improve performance of suppliers and persons categoriess.
It has been found also that aspects related to the specificities of agribusiness production systems affect the organization, such as seasonal availability of raw materials, consumption seasonality, perishability of final products, quality and health surveillance, sociological aspects of foods and biological and edafoclimatic conditions of foods.
Some of problems on these characteristics can be resolved by the use of Lean Production techniques and tools that have not been applied by the research unit, such as statistical process control, production leveling and total quality management.
Finally, it is highlighted that the Research Unit, although already perform not formalized actions that impact the minimization and elimination of losses in its various production aspects, still has a wide margin of improvement that can be achieved through the Lean philosophy. For this purpose, the organization can perform a formalization of Lean Production system and use the various tools and techniques widespread in literature in order to improve the principles of Liker (2007). Hence, the organization can better manage the impacts brought by specificities of the agribusiness production systems that operate on the Research Unit.

Acknowledgements
Research grants awarded: Process number 2013/21047-5, Support Foundation of São Paulo (FAPESP), Process number 2014/04329-0, Support Foundation of São Paulo (FAPESP) and PROPe - Pro Rectory of Research - UNESP.

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1. São Paulo State University, Tupã Campus / Researcher of CEPEAGRO, Professor of the Post-Graduate in Agribusiness and Development. Assistant Professor Doctor of Business Course. Tupã City, São Paulo State, Brazil. E-mail: eduardo@tupa.unesp.br
2. São Paulo State University, Tupã Campus / Researcher of CEPEAGRO, Business student. Tupã City, São Paulo State, Brazil laizhiraga@hotmail.com
3. São Paulo State University, Tupã Campus / Researcher of CEPEAGRO, Business student. Tupã City, São Paulo State, Brazil E-mail: lucaszoccal@tupa.unesp.br

4. São Paulo State University, Tupã Campus / Researcher of CEPEAGRO, Master student in Agribusiness and Development. Tupã City, São Paulo State, Brazil E-mail: gustavogoes@tupa.unesp.br

5. São Paulo State University, Tupã Campus / Researcher of CEPEAGRO, Professor of the Post-Graduate in Agribusiness and Development. Assistant Professor Doctor of Business Course. Tupã City, São Paulo State, Brazil. E-mail: wagner@tupa.unesp.br

6.