While navigating a new industry can have its quirks, at the end of the day, the same basic principles apply to any business. Lean management practices have been adapted from the manufacturing industry to suit all industries, allowing managers to constantly hone processes to eliminate waste and maximize efficiency. But improving a business doesn’t have to be to the detriment of employees—in fact, the best practices can even boost employee morale.
Leif Abel, the co-founder of Greatland Ganja, Alaska’s second licensed marijuana establishment, will be discussing how lean management tactics can be applied to cannabis and hemp operations at the Cannabis Conference 2020. Here, he delves deep into what lean management is, how he uses it in his business and how he’s made it all about people.
Hemp Grower: What is lean management and what are some of its basic principles?
Leif Abel: Lean business is to be efficient with everything. You want to make sure that every time you touch your product, you’re getting the job done and you’re not touching it too many times so that you’re not wasting labor, you’re not degrading your product, you’re not wasting material or space--these are the things that matter and add up over time.
I would say the lean environment should, if it’s done properly, have a triple-P bottom line approach to it: people, place, product. From a sustainable and ecological standpoint, it’s a better way to run a business. If you’re thinking about the people, meaning your employees and your consumers and the folks in your local area, and then the place, meaning the environment that you’re working in, then that’s profit, with the idea being that your profit will actually do better if you concentrate on those three things in that order. At the very least, if not a triple-P approach, it should have a sort of sustainable approach to it, because I don’t think you can actually achieve long-term success if you’re not looking at sustainability from an environmental standpoint as well as from a long-term business survival standpoint.
HG: How can growers implement lean practices into their businesses?
LA: Really the biggest component when it comes to agriculture and farming is the labor. Because our types of companies are spending upwards of 40-55% of their expenses on labor, you can see how any sort of labor efficiency is important. A lot of it has to do with labor efficiency and figuring out the quickest, most successful way to do every task. If you’re getting the job quick but it’s not done right, then you’re actually not saving time or money.
You could make a small, positive change in labor and have a pretty big effect on your books over time. A good example is that I think we’re paying less than half than we used to for fertilizer now, and we were really excited about that. My brother has spent quite a bit of time building relationships to get that deal. And then we turned around and looked at the books and we could barely tell. That’s because on the scale of things, we spend so little on fertilizer compared to what we spend on labor, so I would say be very careful of how much of your manager’s time you allocate toward bargain shopping for deals. His time might very well have been better spent on improving labor efficiency if he has that skill.
It also has a lot to do with automation and how we use technology, like the automated watering, the automated misters, all the way up to more automated sales platforms and things like that.
If it weren't for technology, we wouldn't be able to do all that plant watering with that few cultivators. And we certainly didn't start out that way in the beginning. The cultivators were watering the plants by hand, so the technology that can help us do our job is faster.
All of that is key to being competitive among customers and, therefore, long-term survival.
HG: Do layoffs tend to result from creating labor efficiencies?
LA: Oh, no. What I like to tell my folks is, “We’re not getting rid of anybody around here.” In fact, we’re hiring more people. I just want to grow way more cannabis with the same number of people, so this is not at all about providing less jobs. Most of us are still trying to grow our businesses, which underlies to a greater degree why being more efficient is so important. We’re trying to be efficient on this scale, so we’d better do it as fast as we can, because we’re also trying to grow, so any inefficiency we carry with us is only magnified as we get larger.
HG: Aside from implementing time-saving technology, what are some other ways you use lean tactics in your business?
LA: We are still in the first five years of operating here. To think that we would have our system all figured out at this point I think would be a little bit foolish. We do keep running into ways to make it more efficient, but a lot of it’s smaller stuff now.
There was a time over a year and a half ago when our trimming crew got over twice as fast, and it wasn’t all just because of technology. Part of it was training and how we position the crew and culture and procedure and process, but we’re not going to make those kinds of leaps now. But to think that we’ve got it dialed in 100%, there’s no way. So, we examine quite a bit. For those of us that are the upper level management of the company, it’s always at the back of our minds. As you’re going through the work day, whether you’re training or doing a specific job that day, it’s always thinking in the back of your head: ‘“How can I make this a little more efficient? How can this be a little bit better? How can we move this less? How can we spend less time with it and still get the same product out the door?”
Sometimes you'll think you know the more efficient way, and you'll switch something or change something and find out you're real wrong. So, unfortunately, just like any other scientific endeavor, if you don't have the controls or don’t give yourself enough time or if you choose more than one thing at once, you're going to have a hard time seeing what change is giving you that efficiency. You don't want to end up chasing your tail and changing too much at once and then feeling at a loss because you don't know what was good to change.
HG: Can you walk me through how you adjusted your trimming process to make it more efficient?
LA: It’s a huge expense of the crop, to properly manicure flower for final presentation to the customer, and it mattered a lot. Because of that, we just concentrated heavily on it, so that meant jumping into the process. I can’t make the processes efficient unless I jump into them myself, I’ve noticed. So, if I’m asking for a process to be made efficient around my place, I either have to be doing that process myself or I’m asking the people who are doing it what would make it more efficient. Walking by from the outside as a manager and watching what a group of people are doing and then thinking that you know what’s going to make them more efficient is usually not a good way to approach it, and usually not true.
It was a lot of hands-on. I would jump into any step of it and work there for half a day, a day, whatever it took until I understood what was slowing that section down. I looked for pinch points in the line, I would start operating that pinch point—and by pinch point, I mean the thing that’s slowing the line down—to see the correction that was needed at each little step.
HG: What do you hope attendees will bring back to their business from your session at Cannabis Conference 2020?
LA: There’s two things: One, that it’s all about people, and two, this is really just like running any other business, which is why this is all about the people.
I feel like for me, what matters in life are my family, my team and all the rest of the people that we serve in the world and have relationships with, and I think that probably should be the same for any successful company. So, that's what I would want them to take away, is to concentrate on the people.
Editor’s Note: This interview has been edited for style, length and clarity