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Learn from the aggregate to expand your margins

Melissa Hart for Progressive Dairy Published on 28 June 2019

Dairy farms are similar to the aggregate industry in that they spend a significant amount of time handling materials, from feed and manure to sand and livestock.

Ross Veltema and Allen Bonthuis took their farming backgrounds and dovetailed them into their aggregate businesses. They shared their knowledge of lean farming and expanding margins with dairy producers at the 2019 Great Lakes Regional Dairy Conference held in Frankenmuth, Michigan.

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Veltema grew up on a turkey farm and formed Top Grade Site Management, a company with a strong focus on excavating and grading for agricultural customers.

Bonthuis was raised on a dairy farm and, after spending 12 years in manufacturing management, he is now working for AIS Construction Equipment as an agriculture material handling specialist, working primarily with dairy farms. In 2016, he founded Farming Lean as a way to share lean principles.

Bonthuis explained that while aggregate and dairy farming don’t look the same, they do have much of the same processes in a daily work schedule. Loading, hauling and moving loads of material happen in both businesses, and Bonthuis and Veltema relayed how dairy farmers can make those processes work much more efficiently on the farm.

Making aggregate is like farming; they harvest, process, mix and store material until it is ready to use. Then it is loaded and hauled to its final destination for addition to a value-added product. They deal with waste that needs to be hauled, seasonal fluctuation and weather, just like farms.

Match equipment to need

Equipment is a large part of working in aggregate and farming. Choosing the correct piece of equipment is key to a successful harvest. And maintenance of that machinery is not optional; it is essential for a successful operation.

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Bonthuis emphasized that just as the Michigan Department of Transportation has requirements for aggregate companies, dairy cattle have requirements for the producer as well.

Keeping track of the details of the dairy rations, manure management and equipment maintenance is a large part of being successful on any farm.

Veltema also addressed something as practical as fuel burn when loading trucks or feed mixers. The distance equipment travels from the feed pile to the mixer is crucial, because motion is waste. Taking into account the fuel used, the employee time in mixing the feed and how many trips you make back and forth, these costs add up.

“We believe that 300 feet is the max you should be loading from a bank or a pile and still be productive. When you are in closer proximity, the fuel burn goes way down, and there is less wear on your tires and equipment,” Veltema said.

Another waste is idle time. “There is nothing that frustrates me more than a piece of equipment idling,” Bonthuis said. “Even though your grandpa’s tractor was more efficient when you left it idle back in the day, that is not true with today’s diesel engines.”

Putting a pencil to paper, Bonthuis gave an example of understanding owning and operating costs and how valuable it is to have an understanding of both.

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He said, “Calculating the cost of feeding cows is an important aspect because when you start making decisions on how you’re going to change your feeding program, you need to know if it makes sense.”

Addressing the size of equipment is also an important aspect of profitability. Bonthuis said, “If you are using equipment that is too big, then you will overpay on equipment. If your equipment is too small, then you will overpay on the labour and time side. It comes down to efficiency.”

Having the appropriate-sized equipment means taking into consideration the rations and mix size. And then choosing the right size bucket that fits on the correct size loader that works with the mixer.

All three of these will make a difference in time, resources and increase efficiency.

Make maintenance a priority

When it comes to equipment maintenance, Bonthuis said, “It’s cheaper to maintain than it is to repair, and it’s important to have that built into the budget.”

He continued, “A ripped seat cover can turn into an oil leak. If employees see that you don’t care about ripped seats, then they may think you don’t care about the oil leak, and that can snowball into bigger repair costs.”

The rules of maintenance are to make sure it gets done. Bonthuis said to keep the equipment clean so you can see if there is something leaking. Address the small repairs so they don’t get worse, and managers are encouraged to teach their employees how to do repairs.

“Not everyone knows how to run a grease gun; you can’t assume your employees know how to grease equipment. And the quicker you realize the people you hire don’t have the knowledge base you do, the better your training program will get,” Bonthuis said. He added that most of the time you have a process problem, not a people problem.

Labour and leadership

“The second-hardest aspect in the aggregate business is finding good help,” Veltema said as he switched gears to emphasize the importance of good leadership in any business.

He explained, “A lot of the leaders we have today were not leaders when we hired them; we had to train them.”

Age makes a difference. “If you are going to build on someone, we have found that between the ages of 18 and 40 is best because you can still teach them,” Veltema said. “One of the first things we do is teach them to look beyond themselves, paying attention to the needs of those they work with.”

Bonthuis added, “Good employees have respect for the people around them, and you can build that culture in your business and teach people to have respect for others.”

Veltema’s company uses a unique strategy to provide leadership training – a Bible study. “We hired a man to come into our company, who also goes to my church, and teach leadership skills in our company. He is saving me a ton of mistakes right now as we continue to grow in our small business.”

Veltema stressed that leadership comes from the top and flows through the rest of the company. Bonthuis added that a culture of safety, where it’s safe to ask questions, is also important in leadership.

Whether you are in the aggregate business or the farming business, making sure your employees are trained is crucial.

Bonthuis concluded, “Improving your business never ends; there are always places to keep improving to meet the business goals.”  end mark

Melissa Hart is a freelance writer based in North Adams, Michigan.

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