Co-Op Productivity

The list of possible projects for this cooperative enterprise is extensive and impossible to complete.  This plan touches on some of the more prominent endeavors, but there is much more we can do.  Selecting those projects which are more feasible has us looking at inputs and results.  
 
The prices we charge for the products we sell has to account for everything that goes into it.  

  • Ingredients: flour, sugar, yeast. 
  • Non-Ingredients: bag, boxes, twist ties
  • Energy: oven use, lights, fuel
  • Supplies: cleaners, trash bags, soap
  • Maintenance: filters, oil changes
  • Labor: ?

We don't have a payroll because we don't have employees, we have sharecroppers who are compensated with a payout according to how much the company makes and how many hours they put in.  A critical advantage to this plan is found early on, when we don't have to shell out payroll.  We can use that instead to develop projects which puts the company on solid ground.  Once we get through the bumps and hurdles, train our staff, and have positive income streams in place, the money will start to fall in line the way it should.  

We are putting in our time, we want to earn enough for it to be worthwhile.  Putting in 100 hours over the course of a year, only to receive a payout of $100 would be dissapointing to say the least.  The projects need to produce enough revenue to at least earn ourselves the equivalent of minimum wage, and even that would be less than stellar.  This is not a job.  A job has no risk.  With the sharecroppers fee, the sharecroppers are, in effect, leasing the business.  We are taking a risk.  If the company has a bad year, we have a low payout.  If the company has a good year with robust sales, everyone carrying their load, we stand to earn considerably more than an employee would in a similar role.  

The prices we charge for the products we sell needs to account for a production rate of at least $10/hour.  If we are making bread, putting out 10 loaves/hour (with cleanup, ordering supplies, baking, and bookkeeping) all included, then as a company we need to clear a minimum of $1/loaf above the costs listed above.  Looking at the way income is distributed, if the sharecropper is to be left with $10/hour for that labor, the company needs to earn closer to $12/hour for all the time going into a project.  If we can do this, that 100 hours put in over the course of a year should bring a payout of $1000.  If we achieved this, I would think of the performance as 'barely acceptable'.  

We can do better.  My back of the envelope figures suggest we should be able to earn at least $10/hour, with $12-15/hour being more likely.  I know many, many, many people who would see $12/hour being a a better haul than they are currently earning.  If our demographic makeup has a high percentage of youths participating, then this is good money.  If we can achieve these figures...make that...WHEN we achieve these figures,  I would expect to be beseiged by people looking for more work, because it is better than they earn at the job, and probably a whole lot more fun.

At the start, we'll have some shortcomings.  Our staff will be jumping into stations with limited experience.  It takes time to learn, during which our production will be far from our goal.  We may not have the labor saving equipment in place which gives us the ability to reach and maintain production rates.  A $1500 mixer can make the difference between 50 loaves made by 4 people in 6 hours and 200 loaves made by 2 people in 4 hours.  We can prepare growing beds with lots of people and lots of shovels.  If we get that rototiller and cut garden bed development time to a fraction of what it was, not only do we boost our production rate on that project, we free up a great deal of time which we can put into other projects.  We've got an army of people, but we need to work effectively or we're just kicking our own ass.

Some projects can earn more than other projects.  Meat cutting is a fine example.  The value added to a case of ribeyes cut into steaks, wrapped, and labelled is closer to $20/hour for a novice (trainer + student), and upwards of $40/hour for a skilled meat cutter.  Baking bread can perhaps earn $15/hour.  We'll have positions that earn nothing per hour: time spent cleaning the front windows.  This tells us we want to sell more steaks, look for ways to improve our bread making, and not touch the front windows.  

Some would see the need for eventually eliminating the projects with lower productivity.  There are some projects that can not be mechanized or improved with equipment.  Other projects may serve a support role and have no product or service.  Some projects produce a non-monetary benefit.  Say we have a project that earns the company $8 for each hour of time going into it.  The logic here is that by eliminating the project, the average productivity would be higher.  While this is undoubtedly true, it also knocks those hours out of contention.  We'd end up with only the most productive people doing the most productive work.  Everyone else is cast to the side?  This enterprise is not only about the money.  It's about creating opportunity.  That low productivity job may be an important stepping stone for a new recruit to learn the next step in the operation.  It may be the right job for someone with limited ability who is redirecting far more spending to the group than is gained by that one job.  The product may be the reason a customer comes in.  If we are at a point where we need to look at removing projects because we don't have enough staff, I would submit that more recruiting is the solution.  If we are to develop our people, we need all those projects, from the simple to the complex.

In many ways, we are just like any other business out there.  If you are on site, you are here to work.  Talking on the phone, yucking it up, and horseplay does not get the job done.  A task calls for 4 people in 4 stations to get the job done, and the stations are reserved for that task for that time period.  In order to work as an effective and productive team, we need people in place and on time so we can can have those stations ready and available for the next task.  

Volume and diversity works in our favor.  The kitchen gets a good mop job at the end of the day.  It takes 30 minutes.  If all we did was bake cookies for 2 hours with 2 people, that half hour of mopping takes a big bite out of our productivity.  If the kitchen is active and busy with numerous people doing several jobs all day, that extra 30 minutes becomes statistically insignificant.  Being busy works in our favor.  Perhaps we need to strip, wax, and buff the store floor.  We'll be able to schedule a project that needs to be done and slip it in with a busy month so as not to noticably drag down our productivity.

Productivity brings to the forefront the equitability of everyone earning the same rate of payout.  Jack comes in to cut steaks, generating $40/hour for the company.  Joe bakes bread, generating $15/hour for the company.  John comes in to mop the floor, wash the windows and take out the trash.  Should Jack receive a reward?  Using Jack's line of reasoning, John should not be paid at all.  Let's say Jack started in the kitchen with no experience mopping the floors.  Over time he helped out the breadmakers, helped out the meat cutters, took an interest in meat cutting and developed his skills to a proficient level.  I would say that Jack's reward has already been received.  He has a marketable skill he can take into the real world.  There are ways in which Jack can receive a reward for his expertise.  If he shares it with John the mop guy, we can double our meat production.  Jack can talk to people, invite them in to buy his well cut steaks, and increase our sales.  Jack could polish his sales skills and take his meats on the road to earn commission sales.  As for a greater monetary reward, it would require everyone else to earn less for him to earn more.  This is a worker owned business.  Its not a job.  The sharecroppers agreement is the same for everyone involved.  Jack can thank the other 199 people for making the opportunity possible.  

 

 

 

Cooperative Enterprise, Plan Outline

How productive can vegetable farming be?