Tuesday, March 19, 2013

Some reflections on Mud Lake Farm

I visited Mud Lake Farms in Grand Rapids, MI over break.  Steve and Kris Van Haitsma were hospitable and generous with their time and knowledge.  I'm convinced that their model--which they freely shared with me--is replicable enough to form the foundation of an urban farm social enterprise in Pittsburgh.  I'm going to use this space to flesh out some ideas I'm working through in response to my time with them.  The two themes are:
  1. Nike
  2. Man Sci 
Nike: Just do it.  To some extent, Steve and Kris are successful because they are willing to work harder, work longer and put up with more complexity in their customer relationships than their competitors.  Their competitors are other local farms who sell to local customers (restaurants and individuals,) under the "local" branding strategy.  The only other farm in Western Michigan that grows hydroponic lettuce operates at a far larger scale, with much larger fixed assets and capital costs and sells wholesale to a national distributor who picks up the produce on a truck with a check in hand.  They know this farmer well: he has no interest in getting down on his hands and knees to personally do the work.  He has no interest dealing with whimsical chefs who change their orders last minute.  Steve and Kris do: their business is more of lifestyle choice embedded in their ethic and world view than it is merely a money-making enterprise.  Their love of the farmer's life--and there is both a lot to love and a lot to hate just in two and a half day's work experienced by yours truly--is one of their strongest competitive advantages.  They are happy to just do the labor and emotional-intensive work of growing and delivering quality lettuce and maintaining a large number of small accounts with restaurants and families.
Man Sci I: Product Mix and Inventory Planning Problem
If I were tasked with innovating within the framework of their current operations, I would build an inventory management optimization model and decision support system.  The objective would be to maximize profit per square foot per year.  Growth rate is primarily a function of sunlight and temperature--higher in the summer, lower in the winter.   Cost is also a function of the season - higher costs in the winter, lower in the summer.

The constraints are customer demand (it would be best to shut down in the winter, but that wouldn't make for happy customers,) square footage, heating capacity, lighting capacity. Labor and energy are the largest costs. 

The decision variables would be how much of each product to seed and harvest- and when to seed and harvest them. 





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