Introduction of the Mode of Circular Management System: PDCA
China Productivity Center Agricultural Innovation Department
The assistance provided to Xinshe Agricultural Zone is in a circular management mode of PDCA: namely Plan, Do, Check and Act. They can be ilustrated in three parts:
Plan: Comprehensive analysis of the mushroom industry through the industry chain and market
In 2009, Xinshe Farmers’ Association decided to form a special agricultural zone and picked mushroom as the core product of the zone. The work was not smoothly promoted at first as the key concept was not clear and, due to the lack of communication and trust between the mushroom framers and the farmers’ association, the sale of mushroom products was dominated by a few wholesalers, making industrial integration impossible. Starting from 2012, with the intervention of the management consultant team, the aims and implementation methods were re-evaluated.
Discerning the industrial situation then, the information on mushroom products from all over Taiwan was collected to compare with those produced in Xinshe, in terms of their packaging, weight and specifications, and price level, to serve as the basis for the pricing strategy for Xinshe mushrooms. The distribution of the mushroom sales amount was also analyzed to demonstrate the relative advantages of developing this industry. Irrelevant factors were ignored. Xinshe Agriculture Zone then clearly demonstrated its market potential and local farmers became more certain of having mushroom as their major product.
In addition, a cross-sectional unit was formed in Xinshe Farmers' Association to maintain close contact with mushroom farmers over two years’ time to develop mutual trust and understanding. The voice of the mushroom farmers was really heard and timely solutions were suggested so the farmers began to appreciate the function and value of the farmers' association.
Do: Set Bold Objectives and Collaborate based on Consensus
Since 2012, the Council of Agriculture (COA) introduced the consensus camp to Xinshe Farmers' Association. Important local figures were invited to sit together to learn and share their ideas in the two-day camp. They learned to seek data-based solutions to problems, to jointly set management goals, and to form consensus of the future development of the farmers' association.
With the help of COA, the first consensus camp of Xinshe Farmers' Association was held in 2012, in which the concept of the mushroom industry value chain was formed and the major objectives of the next three years were decided. A grand business objective was set for Xinshe Farmers' Association: the Xinshe mushroom shall enter the large distributor PX-Mart and achieve the annual sales amount of NT$100 million.
NT$100 million was an unprecedented amount at Xinshe Farmers' Association, but it was proposed by the consultants after their careful evaluation of the overall productivity of the agricultural zone. The local team originally thought it was an objective absolutely impossible to achieve. However, it so happened that the issue of food safety suddenly broke out and Xinshe mushroom, the only one of its kind that had the traceable agricultural products (TAP) label, became a leading brand in Taiwan. In 2014, Xinshe mushroom successfully entered distributors like PX-Mart, Housewives Alliance, Hsin Tung Yang, CPC, and some 7-11s. There were more and more channels established and with the gradual increase in sales, the annual sales amount eventually reached NT$100 million.
Check: With Constant Reviews, Problems are Instantly Spotted
The key to the success of Xinshe Farmers' Association was its setting of bold objectives, adopting versatile strategies based on the industrial status, and other strategies like sales channel expansion, establishment of packaging plants and obtaining the ISO22000 certification. This achievement was so encouraging so that the second consensus camp was called and the idea of "expanding the area" was proposed. At this point, the staff of the association was well aware of the importance of objective setting. They reviewed the degrees of accomplishment of previous objectives and also examined the achievement by back-tracking the process of development. They closely collaborated with each other on the short-, medium- and long-term goals set in the management consultation. By examining the degree of monthly achievement of each project review, problems were identified and solved, and continuous improvement was seeking. They proved that, with correct business concept established, breakthrough of status quo and objective achievement are always possible.
Act: Re-orientation, Success Duplicated
Xinshe Farmers' Association, based on the concept of sustainable management, has worked toward building the core competence of the industry, solving the problem of mushroom spawn weakening, controlling the source of the medium and reducing the cost of the mushroom farmers (e.g. the problem of waste mushroom cultivation bags). In 2014, they started to enter the business of mushroom spawn cultivation. Since 2015, the mushrooms started to be sold at four different levels: large, medium large, medium small, and button size. Large ones are sold in gift boxes through high-end channels. Medium large ones are sold at PX-Mart and private brand markets. The medium small ones are sold at Housewives Alliance. The main channels for button-sized mushrooms are Carrefour and Costco. In addition, in addition to dried shiitake mushrooms, fresh mushrooms (Pleurotus eryngii) are also sold at Carrefour. The annual sales amount has reached 150 million.
The mushroom farmers in Xinshe Agricultural Zone have gradually integrated the industrial chain towards the scale of agribusiness. The tri-annual consensus camp has become an important forum to reshape the directions of future development. In the cycle of Plan, Do, Check and Act, Xinshe Farmers' Association not only expanded the mushroom industry, but also operated on other seasonal crops, such as grapes and loquats, forming a positive cycle. This has proved the value of the farmers' association in promoting the prosperous development of the local industries and becoming the best model for those who join the agricultural zones later.