All managers face the challenge of coordinating multiple business activities. Decisions regarding business methods, arrangements, markets, contracts and partners become critical to success, according to Allen Prosch, Pork Central coordinator for the University of Nebraska.
During times of relative stability, when there are few major changes in production, distribution or marketing, the effect of one person performing the coordinating task is reduced. If all agreements are in place and nothing goes wrong, the operation performs more on a supervisory level.
But the most dramatic changes occurring in agriculture are best described as changes in the fundamental business proposition and the ways that producers do business, according to Prosch. Here he provides six critical dimensions to doing business:
1. Processes and activities that create the products or services.
2. Product flow (transportation, logistics, scheduling, inventory management, and so forth.)
3. Financial (cash) flow among participants.
4. Information flow among all participants.
5. Incentive systems to reward and share risk among all participants.
6. Governance and coordination systems, such as joint ventures, open-access markets, strategic alliances, and the like.
Traditionally, producers have been able to participate well in the first two of these six dimensions. It is becoming increasingly critical to understand and participate in all six dimensions, says Prosch. The management ability to do so is critical, and it’s worth the time and attention to work on building those skills.