6% of Lely’s revenue goes to product development and innovation

By: Adriaan van der Giessen 21 Feb, 2019

Lely invests a large percentage, around 6%, of its revenue in product development and innovation of automatic solutions for dairy farms. As one of the largest patent holders in the Netherlands, Lely is continuously looking for innovative solutions to make the lives of livestock breeders easier. We discussed this topic with Timo Joosten, Head of Product Management at Lely, who five years ago was the owner of a dairy farm in France. Joosten talks about innovations in local production and big data, how to handle energy transport and waste flows, the Rotterdam region as an important production location for worldwide export and the challenge of attracting employees with an affinity for the sector.

My Milk: local and specific milk products are possible using the Lely Orbiter

Lely stays a step ahead of the problems of the future thanks to continuous innovation. ‘We’re always looking for solutions to the problems of tomorrow. Nobody really wanted the milking robot when it was invented. Now dairy farmers can’t do without it. We respond to trends such as local production and transparency. ‘My Milk’ is a good example of this. This biological milk comes straight from the Dobbelhoeve farm and can even be directly traced to the Aukje, Kitty, Cootje or Moevchen cow families. The concept has been launched at some 700 Albert Heijn supermarkets in the Netherlands by now. My Milk is linked to the Lely Orbiter, an automatic system whereby the milk can be processed at the farm directly from the milking robot. The Orbiter recognises each cow, allowing us to produce very specific milk products, for example A2A2 milk, a natural milk that consists of only A2 protein’, Joosten explains.

Lely Orbiter

Using the full potential of the cow through intelligent use of data

Recognising the cow and anticipating this is Lely’s strength. Dairy farmers can use the ‘Time for Cows’ management programme to analyse data. ‘But we have greater ambitions in this respect’, says Joosten. ‘The next step will be to combine various reports into one indicator that provides information about the cow’s health or the inventory status, for example. Based on this information, we can even generate a proposal for a decision. As soon as the cow is recognised by our milking robot, the specific settings can be determined per cow. But to what extent are dairy farmers willing to outsource the decision-making process?’ Joosten wonders.

Joosten believes that data sharing offers lots of opportunities for both suppliers and dairy farmers. ‘Our suppliers can apply user data to anticipate in order to engineer components just a bit differently or to schedule preventive maintenance. In cooperation with CRV, we are examining how we can positively influence a cow’s living environment based on genotype (the cow’s genetic potential) and phenotype (the cow’s ultimate behaviour) so as to utilise the cow’s natural potential. We create added value for dairy farmers by effectively combining existing algorithms and data.’

Lely Orbiter proces

‘Rotterdam is the most beneficial location from the logistics perspective. From Rotterdam, our products are exported all over the world in the most cost-efficient manner - except for the USA and Canada.'

Timo Joosten Head of Product Management, Lely

Challenges in energy transport and use of waste flows

Joosten does envisage some interesting future challenges for the sector, such as energy transport and use of waste flows. ‘How can we use energy consumption intelligently by synchronising the various machines? How can we make more use of waste flows, such as animal manure instead of chemical fertiliser? How can we render our customers’ businesses more circular through efficient use of waste flows?’ Joosten sees room for future developments in these areas. ‘In addition, by focusing on data sharing and sustainability, we contribute to a healthy and well-supported future for dairy farmers.’

Rotterdam offers favourable logistics for worldwide export

The company stopped its forage harvesting activities in 2017 and has since been focusing its attention on the cowshed: from milking, feeding and cleaning to advice for the smart configuration of dairy farms using management systems.
‘It is this 100% focus on automatic solutions for dairy farms that allows us to grow. We once again have as many employees (around 1,400) as we did last year, despite stopping our forage harvesting activities,’ says Joosten, explaining Lely’s success. ‘We expect to grow by around 25% in 2019. We are coming into play in all areas where labour is becoming too expensive. The Netherlands is a stable market for our existing products, while US demand for automation is increasingly enormously. We are also aiming at countries such as Germany and France.’ Lely would like to keep production in the Rotterdam region, however. Joosten explains why: ‘Rotterdam is the most beneficial location from the logistics perspective. From Rotterdam, our products are exported all over the world in the most cost-efficient manner – except for the USA and Canada, where we have a local production facility. We also offer high-quality innovative products with a high throughput when it comes to changes. Because there are lots of iterations within the production process, remote production is not realistic; we need flexibility.’

Lely assemblage

Pool of flex-time employees for assembly in the Rotterdam region

In addition to offering the most significant logistical advantage, the Rotterdam region also has sufficient assembly personnel. This is in part due to the digitisation of the port, according to Joosten. ‘This has created an enormous pool of flex-time workers. Around 30% of our assembly personnel consists of flex-time workers because we produce to order and are dependent on the season. The flex-time workers obtain various certificates at Lely so that they can return to work for us next season. Of course, we would like to have a situation where we can offer them work year-round.’

Work hubs for specialists outside the Rotterdam region

Joosten believes that employees with specific knowledge of dairy farming and an affinity for the sector should also be recruited outside the Rotterdam region. ‘We have employees from Friesland and Groningen. Moving to Rotterdam would form a barrier for them, which is why we facilitate work hubs outside the region. This enables us to attract employees who have insight into the potential problems of tomorrow within our sector. It is also becoming increasingly difficult to find qualified personnel. Around 15% of the workforce comprises engineers from technical universities such as the TU Delft, TU Eindhoven and TU Enschede. We have to compete with other large technical companies when recruiting engineers. But most employees do work in the Rotterdam region. We centralise this as much as possible in order to promote cross-pollination.’

About Lely

Lely is an international family-run business in the agricultural sector whose goal is to make the lives of dairy farmers easier through innovative solutions and targeted services. Innovation is the backbone of the company. From a young age, founders Cornelis and Arij van der Lely started developing concepts for reducing the work effort of dairy farmers. Since its founding in 1948, Lely has launched numerous products on the market that have drastically changed the agricultural sector.