104. Lean at Origin for Producer Groups in East Africa

Can formal education improve the management practices of firms?  Literature on the impact of business training offers mixed evidence of its effectiveness, depending on the educational settings and targeted population (McKenzie and Woodruff 2012). At Artisan, we believe there is growing evidence of effective executive education courses on the African continent. Our Lean At Origin courses are a good example of the power of executive training for the coffee sector. 

According to VoxDev, a development economics platform:

"Low-cost interventions such as executive education courses can improve firms’ financial practices and decision making, and trigger economic development."

In a recent paper (Custodio et al. 2020), a randomized controlled trial (RCT) was used to estimate the impact of a financial education program for top executives at medium-sized and large firms in Mozambique. The authors find that this intervention leads to significant changes in short-term financial policies and investment. They show that upon receiving financial education, managers reduce accounts receivable and inventories, which generates an increase in free cash flows used to finance long-term investments. These changes improve the performance of the treated firms. 

Artisan Coffee Imports has been bringing executive education style courses in Lean management principles to producer organizations since 2016. The "Lean at Origin" curriculum was piloted with cooperatives in Rwanda and Burundi in 2016-2017 as part of an Export Promotion grant from Trademark East Africa. From there, founder Ruth Ann Church continued to roll out the program to private producing companies in Rwanda and Burundi. In 2019, to two cooperatives on the island of Idjwi in D.R. Congo received the training thanks to a grant from the Polus Foundation.

Adoption of the principles was high, as most participants readily saw the application of tools for the elimination of waste to their work in coffee and also to their every day lives. During the leadership training at Kopakama, Terese UWIMANA, president of the Ejo Heza women's group stated, "the way of making things clean and organized is going to help us at home and in the community, too!"

Lean at Origin curriculum typically starts with a two-day training for the organizations' leadership. In groups not larger than 18 at a time, participants engage primarily in learning through in hands-on activities and group discussion. Lectures with powerpoint slides (given through simultaneous English-Kinyarwanda translation) are kept brief and limited. Principles of delegation, the importance of metrics and customer focus are emphasized with leadership.

Supervisors are included in the second two days of instruction, where the emphasis is on quality improvement projects called "Kaizen" projects. The goal is to give the participants a basic understanding of how to visualize and improve a process utilizing teamwork and brainstorming.

A key finale event is the "Lean Celebration Day" where community leaders and family members are invited to the cooperative to hear brief presentations by each of the Kaizen groups about the improvements they have made. After the presentations, food, music including drums, drinks and traditional dancing are part of the "Lean Party"!

Impact - the story of Gervias KAYITARE:

With each training a "Lean Champion" is identified. The criteria to be selected is the individual's grasp of and ability to communicate the lean principles. In 2016, by the end of four days of training at Kopakama, it was clear that Gervais KAYITARE comprehended the opportunities Lean was offering his cooperative - especially KAIZEN. In 2017 Gervais embraced advanced sessions on Value Stream Mapping and allowed deeper sessions for the team at the dry mill on Lean tools for production scheduling. In 2018, Gervais helped the farmer cooperative implement the largest change in quality control in its history with the introduction of a floating requirement at all 35 collection sites. In 2019, Gervais had moved into the Executive Director role at the coop. In that role he encouraged new processes to improve soil rejuvenation and the floatation process at collection sites.

In 2020, Gervais was again at the cutting edge, implementing a third cherry price in addition to the government-mandated two prices. This was in keeping with the Lean principle to eliminate waste and defects at the point of purchasing raw material. They would pay a "special" price for "special" coffee that met strict and well-communicated quality criteria: delivery before 12 noon to the collection site and no-compromises hand-sorting. With the "special" criteria to get only the reddest coffee cherry, Kopakama was on its way to lower costs and improve quality at the same time -- the hallmark of Lean. 

This step into new territory of paying a quality premium at the time of the farmgate transaction brought unwanted attention and stress for Gervais and his cooperative. Neighboring cooperatives called the "special price" unfair and unlawful. Gervais courageously held his ground, convincing the cooperative president and the board, that their position was indisputably beneficial to the farmers and the cooperative, and could benefit the entire country if allowed to continue.

In 2021, Rwanda began to see coffee processing organizations across the country paying "special" prices. Thousands of farmers have benefited from the new appreciation for the value they bring now that "elimination of waste" is beginning to take hold in Rwanda's coffee value stream.

Research on the value of executive education:

Differences in productivity and profitability across firms can be large and persistent (Syverson 2004, Syverson 2011, Foster et al. 2008). Management practices as well as development levels across countries contribute to explaining these differences (e.g. Bloom and Van Reenen 2007, Bloom and Van Reenen 2011, Bloom et al. 2013). Analyses of the role of management practices in explaining firm-level productivity and profitability focus on a variety of topics including operational management practices and financial management practices. Corporate policies in these areas might be particularly important in contexts where financial and operational frictions are severe, such as in developing economies. 

Watch a video 'Introduction to Lean' on Youtube with Ruth Ann Church presenting basic Lean principles to groups of coffee producers across several continents. Click here.

Read about a 2015 Lean training for a Kenyan peanutbutter firm sponsored by the United Nations International Trade Centre (ITC): Click here.

Read about a team of European students who taught Lean courses in the East African Community, 2019-2020, via an ITC program called MARKUP.

Read more about executive education in Lean offered throughout the African continent: https://www.lean.org.za/

Read more about research on interventions focused on financial management practices:  https://voxdev.org/topic/firms-trade/how-financial-education-managers-can-help-improve-firm-practices-evidence-mozambique

79. Long term impacts of Lean - Resilience of the Toyota Way

Feb. 20, 2018
Great blog today, "The Toyota Way or Entropy?" by David McKenzie, an economist at the World Bank, on the World Bank Development Impact blog. McKenzie takes the most typical criticism of any training, which is that it won't stick, and tests it. Specifically, McKenzie and co-authors Nicholas Bloom, Benn Eifert, Aprajit Mahajan, and John Roberts test whether an intensive management intervention in Indian textile weaving plants can be shown to have staying power. The simplified, contrasting possible outcomes are the“Toyota way” , with systems in place for measuring and monitoring operations and a continuous cycle of improvement vs. the alternative of entropy, or a gradual decline back into disorder. "One estimate by prominent consulting firm Boston Consulting Group, is that two-thirds of transformation initiatives ultimately fail." Fortunately, McKenzie et. al. find different results.

The study results shared in their new paper are somewhere in between the two outcomes described above. There is some entropy, but some improvements are "sticky", and even 8 years later are still in practice. In short, there was more persistence in management practices than the researchers anticipated. We (at Artisan) were most interested to see which practices were the ones that had staying power. They relate very closely to improvements in quality and inventory levels:

1. recording quality defects in a systematic manner (defect-wise); 
2. having a system for monitoring and disposing old stock; and 
3. carrying out preventative maintenance.

We're excited to see this list, as #1 and #3 have been key success areas in the Lean at Origin two-year pilot project carried out at washing stations in Rwanda and Burundi.
#1 - recording quality defects in a systematic manner: In a washing station in Rwanda, the first "big KAIZEN" a work team addressed was to devise a way to measure the defects coming out of the depulping machine. At the very least, monitoring the level of defects alerts the machinist as to when he needs to adjust the discs. In an advanced scenario, the level of defects after the depulper can be an indicator of the overall quality of the cherry the washing station is receiving. This has important implications for farmer education and washing station profits to the extent that revenue is dependent on quality.

#3 preventative maintenance: At a dry mill in Burundi, the operations manager recognized right away how impactful a program of regular maintenance could be for the depulping machines at the 30-some washing station delivering parchment to their mill. No doubt, he also recognized how the quality of the parchment from these 30 washing stations would be improved if machine down-time became less of an issue.

#1 - photos of recording quality defects in a systematic manner at KOPAKAMA:

Devising the "3 cup metric" for depulper defects.

Basin of A3 beans - machinist wants to know when the % of cut beans spikes.

Devising the "3 cup" metric for depulper defects.

Three samples taken each night - beginning, middle and end of shift.

#3: HOROMAMA dry mill plans to implement preventative maintenance at washing stations like Dusangirijambo and 29 others.

Giving Dusangirijambo a new digital scale.

75. JDE Assessing the Power of Lean

Oct. 5, 2017

In the September 2017 Issue of Global Coffee Report, an exciting article appeared about a six year initiative Jacobs Douwe Egberts (JDE) created in Honduras. Click here for the article.  SIX years is a long commitment. Many USAID projects only last three to five years. Six years is enough to see the impact of Lean efforts across a large geographical region. Looking for clues as to whether the JDE - Cohonducafé Foundation project is a Lean project, a few can be found. The key one was this:

“We conducted value-chain analysis to identify what our priorities should be,” Project Manager Edgar Joel Castro explained, detailing how the team at Cohonducafé Foundation worked with staff at JDE to evaluate key indicators in the market and narrow down the project’s objectives.  A "value-chain analysis" that is well-done at a high level of the supply chain is an excellent tool to help link many "value stream analyses" once you start drilling down.

The rationale for the strategic analysis couldn't be clearer. "The industry that their grandfathers once knew and operated in has changed drastically in line with increasing global demand for the commodity, climate change, greater instance of pests and diseases and other economic factors," (GCR).

The key impact metric may sound small, "overall productivity has increased 25 percent" but if we assume this is across all 15,000 farms in the project, that is actually a very impressive bump to Honduras' 2016 production of 5.93 million 60 kg bags, (USDA’s FAS annual GAIN Report), which comes from 97,000 producers (Instituto Hondureño del Café report 2015/2016).

Another helpful illustration in the Honduras story is how the project united many players along the value-chain. One alone could not have achieved the same result -- even the "largest one with the most money." Here's how they describe the collaborative group:

Through the foundation’s connection with Cohonducafé, the largest exporter of coffee in Honduras, and partnership with JDE, the project gained access to the coffee companies’ extensive networks and superior logistics. “We had direct business relationships with more than 40,000 producers,” says Castro. “We believe that if they weren’t part of this, it would have been much more complicated.”
The foundation also has strategic alliances with 30 different organisations, from universities and municipalities to local and international NGOs.

This example of a large project, combined with examples from the small projects Artisan has lead in Rwanda and Burundi, should encourage other industry players to take Lean training seriously for their strategic supply chain efforts. Invest in the sustainability of quality coffee supply, start your value chain analysis now with help from Artisan Coffee Imports.

73. Lean Tour in Burundi - Impactful for Dusangirijambo

Sep. 14, 2017

Guests admire the fine float tanks at Heza washing station.

Kayanza, BURUNDI

54 participants, including 10 women, toured three washing stations to learn and observe processes that strengthen quality.  The participants were primarily from Dusangirijambo, but included also leaders from SOGESTAL Kayanza, Kirimi station and Long Miles Coffee washing station called “Heza”.

The tour was a unique opportunity compare and contrast processes and infrastructure at 3 different washing stations in the same zone, Kayanza, but with different ownership structure:

• ·         SOGESTAL is private and state owned
• ·         Heza (Long Miles Coffee) is privately owned
• ·         Dusangirijambo is a cooperative under the COCOCA umbrella of Burundian cooperatives

At the end the group received a tour of the HOROMAMA dry mill (formerly Webcor) and there was a formal presentation and small celebration at the dry mill also.

Some participants noticed some areas of the SOGESTAL that would not pass a Lean 6S inspection (see photos below).

Coffee warehouse doubles as mushroom farm... hmm.

No evidence of Lean "6S" tool in use here.

Best practice is for parchment to be stored 30cm from the wall.

Jeremy (Heza manager) thinks Dusan and SOGESTAL staff especially appreciated learning about the following innovations at Heza (Long Miles Coffee):

•  Paying money for building high-quality floating tanks
•  On-site manufacturing of organic manure to save money

•   The double and triple-layer-tables drying system for saving space for coffee drying
•    Recycling system for water
• Pipe from the top of the hill, where coffee is delivered, down to the machine, as a help to farmers

These are innovations Heza had implemented before Artisan arrived in January 2017 and began lean training in Burundi.  They are excellent examples of ‘lean thinking’, however, and therefore they were important initiatives for Dusangirijambo to see. THANK YOU - MURAKOZE - to Long Miles Coffee - Heza, for their generous sharing.

Dusangirijambo had the opportunity to share the new signage they’ve installed and their new machine, new grading channels and water recycling pits that are still under construction. The signage is directly related to Lean concepts – the other items relate to other projects the cooperative is engaged in, such as receiving Rainforest Alliance certification.

It is unclear if Dusangirijambo leadership shared efforts to improve quality metrics at reception and at the machine area. These were the topics addressed in the critical “peak season” KAIZEN projects. We hope they have embraced those KAIZEN learnings, since only motivated employees can maintain machines and other expensive infrastructure. Only well-implemented quality control of incoming raw material (cherry) can improve the quality of the coffee the cooperative has to sell. New machines and cement help, but they cannot replace strict quality control that is “owned” by the frontline workers

From the photos of Heza above, compared to the photos below, one can imagine the process and infrastructure improvements the Dusangirijambo leaders may now be considering for the upcoming, 2018, season.

September is “the start” of the coffee season in this region – a good time to make plans and start new things. For example, the float tanks at Dusangirijambo require sorting in small batches, because the baskets are small. It requires a lot of bending over and makeshift “catchments” for the floaters (the waste).

Lean practices emphasize eliminating wasted motion and wasted time. Not only could the processes for the farmers after they arrive at the washing station be improved (for example with large, solid float tanks and a reception area paved with concrete), but the time required to sort and process cherry at the reception area of the station could be reduced if the farmers arrived with bags of cherry that had fewer defects. What if the average bag of cherry arriving at the washing station was 90% perfectly red-ripe cherry instead of only 75%? What kind of lowered costs and increased profits might accrue to the cooperative? These are the kinds of questions employee groups are asked to consider as they design their KAIZEN projects. Dusangirijambo’s employees got very excited when Artisan worked with them in April 2017 to design a new cherry quality metric to be implemented before weighing

The “Lean Tour Day” ended at the HOROMAMA dry mill in Kayanza. Many participants had never seen a dry mill operation before. The HOROMAMA dry mill has implemented a “Lean Specialists” committee since their leaders attended Artisan’s lean training. Several clues indicate lean practices, such as painted guidelines on the floor and an emphasis on cleanliness (cloth under visitors’ shoes in lower right photo) and safety (safety gear on worker).