S I X

S I G M A

Mooooving Toward Six Sigma

A quality management program helps one farm
manage its feed costs
by
Thomas P. Tylutki and Danny G. Fox

MODERN DAIRY

farm is a complex
and highly integrated collection of systems (see Figure 1).
The systems tend to
share system analysis challenges
regarding capital, labor, management and sometimes equipment
making. Dairy farms can be
described as five manufacturing
systems [cropping, feeding,
replacements, milking and
manure/nutrient management
(see Dairy Terms and Definitions, p. 40)] that
transfer products and costs internally. Products sold
externally include milk (88.2% of receipts), cattle
(6.1%), crops (2.5%) and miscellaneous (3.2%).1
According to a 1999 dairy farm business summary for large herds in New York, the average large
herd had 594 cows and assets totaling $3,487,968.2
As Figure 2 (p. 36) illustrates, these dairy farms (an
average of 70 farms with more than 300 cows) are
capital and labor intensive with low returns. One of
the largest expenses on dairy farms is purchased
feed, which costs an average of 25% of gross
income. Lactating cow diets typically contain 45 to
60% purchased ingredients, with the remaining proportion home raised by the cropping system.
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Current quality management on farms

Dairy farm owners, managers
and advisors are generally
unfamiliar with system, root
cause or statistical analysis.
Some farms use charts, but they
tend to record historical trends,
and actions are seldom taken
based on the charts. Larger
farms (more than 300 cows) use
consultants for technical assistance. Typically, these professionals become part of the
farms management team when a problem occurs
requiring intervention. The professionals are
trained in their specific disciplines, so they dont
perform much root cause analysis.
The margins in dairy farming have been eroding
for several years. Farms are exiting the industry at
a relatively constant rate, which results in a polarization of size (farms with less than 100 cows and
those with more than 500 cows). The larger farms
continue to grow in size based on resource (land
and capital) availability, whereas the small farms
remain stable.
Emerging issues, such as environmental regulation, will further polarize farms in terms of size and
financial performance. Nationwide, animal feeding

On-farm

Wasted/spoiled feed

feed intake fluctuations, weather, cow production

operations with more than 300 animal units (one
variance, milker consistency, milking parlor perforanimal unit equals 1,000 pounds of animal) and the
mance and milk weighing accuracy. An article in
potential to impact water quality are now required
the Journal of Dairy Science said the mean variance
to have nonpoint-source pollution permits. Animal
for Holsteins was 1.23 kilograms per day throughfeeding enterprises of this size are classified as conout lactation, with the variance for months one
centrated animal feeding operations. The permits
through four averaging 1.75 kilograms per day.7
are similar in scope to those required by many
industries for point-source pollution prevention.
Several of these variance sources reside in the feedThe permits require additional management, record
ing system and are potentially controllable.
keeping, and short- and long-term planning for
This supports the hypothesis that variation in
capital expenditures to ensure compliance.
ingredients, feeder accuracy and the resulting mix
Research conducted at Cornell University shows
must be controlled to lower costs, decrease excretion
most of the excess nutrients on
dairy farms are the result of purchased feeds. 3, 4, 5 These excess FIGURE 1 Dairy Farm Systems
nutrients are prone to environmental loss, potentially harming
Purchased
Crop
Cropping
feed
inputs
system
the environment as they either
leach into groundwater or run off
Feed
Feed
storage
into surface water. Decreasing
storage
Demand
vs.
supply
feed purchases can have a profound impact on nutrient excretion.6 To decrease feed purchases,
Purchase what feed
Feeding
a farm must improve the quality
system
Feed sold
and increase the quantity of
Feed sold
off farm
homegrown feeds.
The challenge is that most diets
Sell
Feed
have been formulated with safety
on or off
need
Farm
Manure/nutrient
farm
factors to limit short- and longindirect
management
material
term animal production variasystem
Off-farm
On-farm
tion. Short-term variation (one to
10 days) is easily identifiable and
Allocation
Milk
Milking
tracked as milk output per cow.
storage
system
Longer-term variation (six to 12
months) ranges from decreased
Manure
storage
reproductive efficiency to postMilk
sales
calving metabolic disorders and
Cull which
is not addressed until problems
Replacement
animals
system
arise.
Variation in milk output per
Noncow arises from several sources
Replacement
Sell
productive
on or off
sales
including feed dry matter variafarm
animals
tion, feed chemical composition
Productive
variation, feeder accuracy, weighOff-farm
animal
ing and blending, cow genetics,
sales
stage of lactation, individual cow
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M O O O OV I N G T O WA R D S I X S I G M A

and improve safety factors while maintaining consistent production. This idea, along with the fact that all
animal and crop information flows through the
feeding system (see Figure 1, p. 35), has led to
the feeding systems being identified as a critical
control point in quality management on dairy farms.
The feeding system has become the quality management development area for farms.

FIGURE 3

EZ-Acres Feeding System

Adjust
amounts
offered

Which
mix

Forage
Commodity

EZ-Acres case study

We set out to design a quality management program on a commercial dairy farm to decrease variation in the diets offered to groups (potentially
minimizing milk production variation), reduce feed
costs and improve the safety factor levels used in
ration formulation. Achieving these goals will cause
the cattle to excrete less nutrients and, we believe,
increase long-term milk production.
We decided to study McMahons EZ-Acres near
Homer, NY. We planned to document the feeding
system in a quality framework, identify sources of
variation and determine those that are potentially
controllable, determine the amount of variation present in feeds and begin developing a quality management program.
EZ-Acres is a 500-cow dairy farm currently
owned by two brothers. One brother is general manager and crop manager; the other is herd manager.

FIGURE 2

Characteristics of Large New York

Commercial Dairy Farms*
Average
value

Number of cows

594

Farm capital per cow

$5,872

Equity percentage

Lower and
upper deciles
320 to 1,432
$3,549 to $8,088

53%

25 to 81%

Rate of return on all capital

(without appreciation)

10.4%

2.4 to 21%

Debt per cow

$2,834

$986 to $4,529

Purchased grain percentage

of milk sales

25%

Worker equivalent (53 hours

of labor per week)

13.18

Cows per worker

45

Hired labor cost

$31,081

Years of education
(primary operator)

20 to 32%

33 to 61
$18,503 to $39,853

14

* Jason Karszes, W.A. Knoblauch and L.D. Putnam, New York Large Herd Farms,
300 Cows or Larger, 1999 (Ithaca, NY: Cornell University, Department of
Agricultural, Resource and Managerial Economics, 2000).

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Which
forage
How
much
Which
commodity
Bags

Inspection

Add and
weigh

Which
bags

Hand add

Deliver to
group

Mix

Unload

Return to
feed area

The farm is located over the Homer-Cortland aquifer

that provides drinking water for approximately 50,000
people. The farm is currently developing its concentrated animal feeding operation plan. In 1995, a facility with
room for 500 lactating cows and a milking center was
constructed. Facilities were also constructed to house
replacement heifers, dry cows and feed storage. Figures
1 (p. 35), 3, 4 and 5 (p. 38) represent this particular farm.
The farms cropping system grows feedstuffs (corn
and alfalfa) that are sold to and stored by the feeding
system. The cropping system is seasonal with approximately 550 hectares and 4.5 full-time equivalent (FTE)
employees. It has an investment (land and machinery)
of approximately $2.2 million.
The feeding system consists of all stored feed, storage
facilities, equipment and one FTE. The system is responsible for mixing and delivering diets to all cattle and has
an investment (buildings and equipment) of approximately $450,000.
The milking system consists of 500 lactating and 100
dry cows, cow housing, a milking parlor and five FTEs.
This system would be analogous to an assembly line
with 500 machines creating one product. It has an

investment (buildings, equipment and cattle) of

approximately $2 million.
The replacement system consists of all replacement
heifers and housing. When a calf is born, she enters
the replacement system and remains there until she
calves (22 months later). This system has approximately 1.5 FTEs and an investment of $725,000 (buildings and cattle).
The manure/nutrient management system collects
all the waste (manure, water and spoiled feed), stores it
and disposes of it according to its nutrient content and
the nutrient requirements of crops grown by the cropping system. It consists of approximately two FTEs and
a $225,000 investment (equipment). Current environmental regulations directly impact this system because
a waste disposal plan must be followed. The plan
includes record keeping and equipment calibration,
which are new requirements of and costs to the system.
A large dairy farms feeding system is a complex
weighing, blending and delivery operation (see
Figures 3, 4 and 5). The feeder at the case study farm
daily manufactures 10 loads ranging in weight from
700 to 7,000 kilograms per load. Each batch contains
from two to 10 ingredients with all but two loaded
with an industrial loader tractor. The truck used for
feeding has a four-auger horizontal mixer with four
load cells (each with 0.1% accuracy), a scale head and
interface with a desktop computer via wireless
modems. The software instructs the feeder what kinds
and amount of feed to add to each batch. It also
records how much was actually loaded. The data
show feeder accuracy varies from 0.05 to 10%.

Six Sigma dairy farm quality management program

The current paradigm for many dairy farms and
supporting professionals is problem solving, step four
of the Six Sigma roadmap.8 Six Sigma is the desired
quality management model because it represents a
highly integrated system with aggressive goals.
A sweeping cultural change is needed in production agriculture to improve its long-term competitiveness in global markets, while maintaining
environmental quality.9 Upper managements support
is critical on dairy farms as they are small businesses
where owners are typically upper management, but
still perform many of the day-to-day tasks alongside
employees. True Six Sigma quality (3.4 defects per
million opportunities) is an aggressive long-term goal
requiring long-term commitment in an industry currently operating between one and two sigma.
The define, measure, analyze, improve and control
model is being used to develop a Six Sigma quality management program for the feeding system on EZ-Acres.
The feeding system was chosen to initiate this process

FIGURE 4

Forage Component of EZ-Acres

Feeding System
Cropping
system

New corn
silage

Old corn
silage

Grass bag

Grass bunk
front

Alfalfa
bunk
back

Alfalfa
bunk
front

Forage

Grass
bunk
back

Which
forage

because it contributes the highest proportion to variable

costs in producing milk, is quantifiable, has an easily
demonstrated impact and is the most separable enterprise (in terms of manufacturing costs) on the farm.
We developed flowcharts (see Figures 3, 4 and 5)
with the assistance of one of the feeders to determine
potential sources of variation. The starting point is
completed at the beginning of the feeders shift for all
groups, and then the loop is repeated until feeding is
completed.
The feeding system primarily deals with internal
customers (as purchaser from the cropping system
and seller to the replacement and milking systems).
External transactions include purchasing commodities
and special mixes and occasionally selling forages.
Communication between the feeding and cropping
system is limited, and a several month lag time exists
before changes recommended by the feeding system
can be implemented in the cropping system. The forage component of the feeding system represents storage and inventory. The time in inventory makes it
difficult to implement a change as proposed changes
are not documented, and current weather conditions
dictate the cropping system schedule.
The flowcharts, discussions with employees and
data collection showed us several areas where we
could control variation and improve overall quality.
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The ranges encompass the variation

observed from the sampling project and provide different levels of precision to achieve a
95% confidence interval. For example, corn
What feed is needed?
silage sampled at feed out has a dry matter
standard deviation of 3.3 units. Ideally, a farm
Commercial
feed
Bay 1
would control dry matter to within 0.5 units.
manufacturer
bulk
mineral
This would require 178 samples (many farms
mix
sample weekly giving a precision of one to 2.5
units). Rapid moisture determination methodology is a limitation to improving precision
Bay 2
because current methods require 30 minutes
chopped
Cropping
hay
to 36 hours for each sample. Improvements in
system
feed quality require ongoing discussions with
the cropping system and could take up to four
years to fully implement because the cropping
Bay 3
system has a multiyear plan.
cottonseed
Control charts have been implemented in the
Commodity
feeding
system. Several parameters considered
broker
critical in the feeding system include forage dry
matter content, dry matter intake by lactating
Bay 4
cow group and feed cost per 45.4 kilograms of
Commodity
homer
meal
milk produced. The first two parameters track
inputs; the third tracks output and consistency
of ration costs over time. The feeder maintains
the control charts (see Figure 7 for an example
Bay 5
of a corn silage percentage dry matter chart).
soybean
The dry matter standard operating procemeal
dure (SOP) contains guidelines related to
interpretation. For example, if the dry matter
of the sample collected today (sample 1) difBay 6
fers by more than five units from the previous
corn
Which
sample (sample 0), a second dry matter sammeal
commodity?
ple (sample 2) is collected. If sample 2 agrees
with sample 1, the mean of the two samples is
used (the assumption is that a large shift in
dry matter occurred). If sample 2 agrees with
sample 0, the dry matter value from sample 2
is used (the assumption is that the original difference
Purchased feeds were identified as one controllable
was sampling error). A feed such as corn silage typisource of variation. The nutritionist interviewed repcally varies between 25 and 40% dry matter so a fiveresentatives from current and potential suppliers
unit change represents a 12.5 to 20% change. While a
regarding their quality programs and discussed the
five-unit shift appears high, most farms determine dry
quality management project, the farms expectations
matter either weekly or monthly. Thus, decreasing the
and the spot sampling protocols the farm would
sampling interval to two to three days increases accuimplement. This process resulted in the creation of a
racy.
preferred supplier list.
Improving the feeders technical skills was an area
Another potential source of variation was feed dry
we needed to look at to improve the quality managematter and chemical composition. Chemical composiment of the feeding system. Feeders are now being
tion between supplier farms was quite high, according
trained in simple statistics, equipment maintenance
to the results from a commercial feed testing laboratoand basic dairy nutrition. Initial results suggest feedry.10 Two years of intensive sampling have shown variers have thus developed a higher degree of commitation within a farm is slightly less than variation
ment to batch consistency, sampling protocols and the
between farms (see Figure 6). The feed variation data
business as a whole. These employees have been
were used to generate a sample size table.

Commodity Component of EZ-Acres

Feeding System

Which commodity to buy?

FIGURE 5

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working with management

on the development of
SOPs for each area they are
involved in, and they are
learning about normal distribution, mean, variance,
confidence intervals, linear
regression, t-tests and root
cause analysis.

Future work

FIGURE 6

Comparing Composition of Several Feeds*

Within one farm
1998 corn 1999 corn
silage
silage

Mean DM
DM CV percentage
Mean NDF
(DM percentage)

Between two farms

Grass
silage

Alfalfa
silage

Corn
silage

Grass
silage

Alfalfa
silage

27.72

31.02

30.75

35.10

34.1

37.3

41.4

6.4

9.1

28.4

23.2

19.9

30

26.1

50.46

44.76

59.75

46.67

46

59.4

46

Dry matter percentage

NDF CV percentage
8.7
9.8
11.9
12.5
13.5
13.3
13.5
As the project progresses,
the Six Sigma staff delinDM dry matter content, a percentage
eations (Champions, Black
CV coefficient of variation
NDF neutral detergent fiber, a laboratory analysis that measures cellulose, hemicellulose and lignin
Belts and Green Belts)
are slowly taking form.
* A.F. Kertz, Variability in Delivery of Nutrients to Lactating Dairy Cows, Journal of Dairy Science, 1998, Vol. 81.
Currently, members of
upper management are
Champions. Additional
FIGURE 7
Feeding System Control Chart for Percentage of Corn Silage Dry Matter
training in statistics will
slowly result in middle
35%
management (head feeder)
rising to a Green Belt level
and off-farm consultants
30%
rising to Black Belts. This
loose adoption of Six Sigma
25%
vocabulary will take approximately 18 to 24 months to
20%
fully implement on the case
study farm. Were currently
developing a quality manu15%
al containing SOPs and
good quality practices for
10%
all staff, continuing to train
management and staff in
5%
statistics and human
resource management, and
0%
incorporating new technol10/2
10/12
10/22
11/11
11/21
12/1
12/11
12/21
12/31
1/10
11/1
ogy into daily workflows.
Sample date
Daily dry matter deterPercentage of corn silage dry matter
Moving range
mination of stored feeds is
a controllable source of
variation; however, we need a rapid and accurate onbecoming more complex, most producers are unaware
farm method. The coefficients of variation for dry
of the technologys level of accuracy and stability.
Information regarding accuracy and testing is being
matter determination of four methods ranged from 2.4
collected from the manufacturers, and their input is
to 3.4% for corn silage, and the method commonly
being used to develop gage reliability and reproused on-farm averaged three to four units higher than
ducibility (R&R) studies. Accomplishing this requires
the one used in the laboratory.11 One new method,
portable near infrared spectrophotometry, would
better record keeping for equipment service, activity
allow a farm to determine dry matter once a day or
based costing analysis and R&R results.
more frequently and require only two to five minutes
Reinforcing the farms commitment to continuous
per sample vs. the 45 to 60 minutes the current
improvement is the foundation of all future work. As
method requires.
in manufacturing and service sectors, the issue of the
Although farms are using more technology and it is
day often overrides long-term goals and strategy set
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M O O O OV I N G T O WA R D S I X S I G M A

Dairy Terms and Definitions

Bag: Feed storage method for silages.
Bunk: Flat feed storage method for silages.
Chopped hay: Dry hay chopped so it can be
blended with silages in the feeding system.
Commodity: Feeds purchased as individual
ingredients. They are high protein or high energy (soybean meal, cottonseed and corn grain).
Concentrated animal feeding operations:
Facilities defined by the Environmental
Protection Agency as consisting of a specific
number of animals and other conditions requiring them to obtain wastewater discharge permits pursuant to the Clean Water Act.

Corn silage: Whole plant corn (includes ear,

grain, stalks and leaves) harvested annually and
stored as silage.
Cow feed intake (dry matter intake): Mass of
feed consumed (typically on a moisture-free
basis) per cow per day.

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Cow genetics: The majority of dairy cattle

reproduction is accomplished via artificial
insemination.
Cropping system: A series of activities ranging from land preparation to harvest.
Dry cows: Following a lactation period, cattle
must be given a 40- to 60-day rest period during
late pregnancy to allow the mammary glands to
rejuvenate. These cattle are dry.
Feed dry matter: 100 minus the water content
of feeds.
Feeder: Employee responsible for the feeding
system.
Feeding system: A weighing/blending/
delivery series of activities combining inputs
from the cropping system with purchased
inputs to feed the herd.
Forage: Feeds higher in fiber (alfalfa, grasses
and whole-plant grain crops).
Group: Cattle on large farms housed according to production class/level (dry cow group or
cows less than 30 days post-parturition) for
feeding/management purposes.
Homer meal: A specialty soy product
processed via screw extrusion. It contains higher fat than soybean meal, and the heating in the
extrusion process alters the protein structure so
less is fermented in the cows rumen (forestomach).
Lactating cows: Cattle currently producing
milk. Typically, cows will be milked for 330 to
360 days before being given a dry period.
Manure/nutrient management system: Waste
handling and treatment focusing on manure
disposal in an environmentally responsible
manner.
Milk weighing: A general term used to
describe methodology to determine the mass of
milk harvest. All milk is sold on a hundredweight basis and weight is determined on-farm
via volumetric methods.
Milker consistency: Employees (milkers) in
the milking system are expected to harvest
within throughput guidelines (cows per hour or
pounds of milk harvested per hour) to maintain

forth by the strategic leadership team. Regular meetings are being held with the strategic leadership team
and various staff members to discuss problems and to
reinforce long-term continuous improvement goals.
REFERENCES

approximately equal time intervals between

milking sessions (8 to 12 hour intervals)
while ensuring maximum milk harvest per
cow.
Milking parlor: General term used to
describe the structure and equipment used to
harvest milk.
Milking system: Large farms have a structure and staff specifically for harvesting milk.
Parturition: The act or process of giving
birth.
Replacement heifers: Cattle that have yet
to produce milk (birth through first parturition). They replenish current cattle (turnover)
or expand herd size.
Replacement system: Cattle, like equipment, must be replaced. Many dairy operations raise all females from birth to provide
replacement production units or expansion.
Reproductive efficiency: To continue milk
production, cattle must be bred on an annual
basis, so dairy producers strive for one calf
per cow annually and track breedings per
conception with a goal of less than 2.0.
Silage: An anaerobically fermented feed.
This method of feed preservation allows for
timely harvest of feeds by stabilizing wetter
feeds (20 to 45% water content) so they can
be stored for up to 18 months.
Soybean meal: By-product of the soy oil
industry. Guaranteed to contain at least
47.5% total protein on a wet basis (12%
water).
Stage of lactation: Cows daily milk production over time is comparable to the three
stages of production in production economics with a rapidly increasing phase (up to 90
days post-calvingearly lactation), an apex
with a slight decline (90 to 150 days postcalvingpeak or midlactation) and a gradual decline until milk production ceases
(about 360 days post-calvinglate lactation).

1. Jason Karszes, W.A. Knoblauch and L.D. Putnam, New

York Large Herd Farms, 300 Cows or Larger, 1999 (Ithaca, NY:
Cornell University, Department of Agricultural, Resource and
Managerial Economics, 2000).
2. Ibid.
3. J.L. Hutson, R.E. Pitt, R.K. Koelsch, J.B. Houser and R.J.
Wagenet, Improving Dairy Farm Sustainability II:
Environmental Losses and Nutrient Flows, Journal of
Production Agriculture, 1998, Vol. 11, No. 2.
4. S.D. Klausner, D.G. Fox, C.N. Rasmussen, R.E. Pitt, T.P.
Tylutki, P.E. Wright, L.E. Chase and W.C. Stone, Improving
Dairy Farm Sustainability I: An Approach to Animal and Crop
Nutrient Management Planning, Journal of Production
Agriculture, 1998, Vol. 11, No. 2.
5. S.J. Wang, D.G. Fox, D.J.R. Cherney, S.D. Klausner and
D.R. Bouldin, Impact of Dairy Farming on Well Water Nitrate
Level and Soil Content of Phosphorus and Potassium, Journal
of Dairy Science, 1999, Vol. 82, No. 10.
6. T.P. Tylutki and D.G. Fox, Managing Nutrients and
Pathogens From Animal Agriculture (Camp Hill, PA: Natural
Resource, Agriculture and Engineering Service, 2000).
7. R.W. Everett, H.W. Carter and J.D. Burke, Evaluation of
the Dairy Herd Improvement Association Record System,
Journal of Dairy Science, 1968, Vol. 51, No. 1.
8. P.S. Pande, R.P. Neuman and R.R. Cavanagh, The Six
Sigma Way: How GE, Motorola and Other Top Companies Are
Honing Their Performance (New York: McGraw-Hill, 2000).
9. Ibid.
10. A.F. Kertz, Variability in Delivery of Nutrients to
Lactating Dairy Cows, Journal of Dairy Science, 1998, Vol. 81.
11. G.R. Oetzel, F.P. Villalba, W.J. Goodger and K.V.
Nordlund, A Comparison of On-farm Methods for Estimating
the Dry Matter Content of Feed Ingredients, Journal of Dairy
Science, 1993, Vol. 76.

THOMAS P. TYLUTKI is a research and support specialist in the

Department of Animal Science at Cornell University. He earned
a masters degree in animal nutrition from Cornell and is a member of ASQ.
DANNY G. FOX is a professor at Cornell University and earned a

doctorate in animal nutrition from Ohio State University.

If you would like to comment on this article, please post your
remarks on the Quality Progress Discussion Board on
www.asqnet.org, or e-mail them to editor@asq.org. QP

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