what are the best KPIs for food manufacturers?

What Are The Best KPIs for food manufacturers?

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The Difference Between Objectives & KPIs

You’re likely to overhear managers discussing aims and KPIs if you walk into any company. They’re also known as ‘goals’ or ‘targets,’ and they’re designed to keep every employee as concentrated on their work as a cat on a laser pointer.

Objectives

These are your long-term objectives, the big things you want to accomplish. As a result, a salesperson’s goal would most likely be to increase sales income by a given amount.

KPIs

These are the KPIs (Key Performance Indicators) for your business. These are the specific tasks that must be done in order to achieve your overall goal. To return to our salesperson, he or she will be unable to raise sales revenue unless they make a particular number of prospecting calls or upsell a certain number of new products to existing clients.

Of course, setting objectives and KPIs for each individual is beneficial so that they know exactly what they should be working toward. But don’t forget about departments or the company as a whole!

What are the best KPIs for Food Industry?

Top 7 Key Performance Indicators (KPIs) For Food industry

The measurements provided below provide insight into a positive performance while also pointing out areas where it might improve.

  • Sales

Sales are one of the most important markers of a company’s success. Many crucial variables in the restaurant industry, such as break-even points and gross profit, are influenced by sales.

  • Sales in the Past

The performance of a food business over time can be tracked using historical sales data. This KPI should be tracked on a daily, weekly, monthly, and annual basis. Historical sales data can be used to spot trends, compare performance to previous years, and pinpoint your busiest seasons. Long-term sales data can also help with forecasting, planning, and cost reduction.

  • Cost of Labor

Most food industries spend a significant amount of money on labor. Wages, taxes, discounts, and any employee perks are all included in the labor cost. Labor costs typically account for 30-35 percent of an organisation’s entire revenue, according to Chron. Measure your labor expenditures carefully and keep track of how they compare to prime costs.

  • The Cost of Goods

Look for ways to reduce the cost of goods sold without losing quality to boost your businesss bottom line. Strategies include keeping a smaller inventory, conducting daily inventory on critical things, and having a plan in place to guarantee that all acquired products are used to their full potential.

Food is a significant expense. Tracking your food cost percentage is a useful strategy to keep food spending under control.

The difference between the cost of creating your things and the price your clients pay is determined by the food cost %. The majority of successful industries have a food cost percentage of 28-35 percent, and controlling food expenses is critical to your business’s profitability.

To figure out the percentage of food costs, we must first figure out how much food costs.

The cost of liquor is included in your cost of goods sold. If you sell alcohol, you’ll need to figure out how much beer, wine, and liquor cost.

  • Cost-effectiveness

Because prime cost accounts for the majority of a business’s variable costs, it is one of the most important KPIs to track. The entire labor costs are added to the cost of items sold to arrive at the prime cost. According to David Peters, publisher of TheRestaurantExpert.com, the ideal prime cost in the food industry is around 60-65 percent.

Proprietors can increase profitability by figuring out how to reduce prime prices without sacrificing quality.

  • Vacancy Rate

Another issue that the food industry sector faces is high personnel turnover. The average employee stays for two months and the average food management stays for four months. The Center for Hospitality Research at Cornell discovered that the average cost of turnover for front-line staff is $5,864 per person.

During labor evaluations, examine total labor costs as well as employee turnover. Also, keep an eye out for methods to reduce labor costs while enhancing employee retention.

Also Read: ERP Software for Meat and Poultry Companies

  • Benchmarks for servers

Servers are an important part of any food business’s staff. They serve as brand ambassadors for your company and have a direct impact on important business metrics like sales and customer satisfaction.

There are numerous techniques to measure server performance in order to assess productivity, discover server strengths and weaknesses, and enhance your bottom line.

Server productivity can be measured in a variety of ways, according to Chefs-Resources.com.

  • Average Per Person (PPA)

The per-person average, often known as the per-guest average, is a measure to track a server’s sales volume. It’s critical to keep track of this information in order to determine which servers provide the most revenue for your company.

Other factors to consider when evaluating a server’s per-person average include customer service, table turn-time, and the number of guests served each hour.

  • Per-Server, Per-Hour, Number of Guests Served

The number of customers (not tables) served each hour can be used to determine the efficiency of each employee. It’s also a good idea to compare the number of guests served with customer feedback.

The best servers will excel in both categories. Consider reducing client volume and providing extra training to a server who has a high number of guests but low guest feedback.

  • Per-Guest Server Errors

It’s a good idea to keep track of a server’s mistakes to see how frequently they happen because wrongly rung goods in a POS system result in higher costs, dissatisfied customers, and low team morale. Management can take efforts to resolve the problem and reduce the number of errors by identifying the number of server problems.

Examples of Using KPIs to Drive Outcomes

You can’t improve what you don’t measure, as the saying goes. This is demonstrated by the widespread usage of key performance indicators (KPIs) in several aspects of the business. Managers have grown to rely on carefully crafted measures to assess their teams’ effectiveness and, ultimately, their impact on profitability.

However, how can managers get the most out of their KPIs? To put it another way, how can KPIs be utilized to improve the performance of individuals and teams? Let’s take a look at some real-world instances of how senior and mid-level executives may use KPI data to assist their employees to succeed.

Search for Holes

First and foremost, if your KPIs are inconsistent or inaccurate, you won’t be able to enhance your processes based on a study of them. The data stream that feeds the KPIs you’ve selected to track is critical to the analysis, feedback, and improvement cycle. The data points you’re tracking for all team members must be complete and correct for this cycle to perform at maximum potential.

To address this, management must first convey the KPI’s criteria to their team, ensuring that everyone is working toward the same goals. Second, it’s critical that teams working toward a common set of KPIs track their progress using the same system. Managers may rest comfortably that the data they’re looking at is accurate and, as a result, actionable.
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If your KPI data is devoid of flaws, it can be used to have productive discussions about employee performance. KPIs can be used in a variety of ways to provide tactical feedback to team members, including:

  • Identifying which measures (or “leading indicators”) are most directly linked to improved revenue and encouraging team members to focus on those activities.

 

  • Identifying the challenges that team members are facing and how they are affecting their performance. Managers can query why particular team members are not meeting goals based on their performance in comparison to other employees.

 

  • Data-driven efficiency challenges are being highlighted. For example, you might discover that certain salespeople close more transactions while making fewer calls, and you might push those with high call volumes to prioritize quality over quantity.

Trends to Look Out For

Identifying trends that may have an impact on your team’s capacity to achieve goals is a part of driving performance. KPI analysis can disclose a variety of useful information, including:

  • Consider the case when your KPIs show a decrease in activity across the board over the summer months. During the winter holiday season, though, sales per representative may skyrocket.

 

  • Competitive influence: In some circumstances, a competitor’s encroachment can be seen in KPIs, especially those that deal with retention rates or satisfaction surveys.

 

  • Geographically, it’s possible that team members who operate remotely produce more than those who work in an office. Perhaps one portion of the country is proving to be more profitable than another.


These are only a few examples of what KPIs might reveal. Using this data, managers may make the necessary modifications to guarantee that each team member is performing to his or her full capacity.

Improve KPIs to Enhance OEE

Overall Equipment Effectiveness (OEE) is a metric for measuring machine potential and identifying areas for development. OEE is used by manufacturers to identify, track, and reduce production losses. As a result, it has become a global KPI for manufacturers and a best practice in lean manufacturing. As a result, you should work to improve it.

  1. Assign a digital champion to improve OEE.

When a corporation appoints a digital champion to oversee OEE deployment, ownership and accountability for its success are established.

  1. Make data collection and reporting more automated.

Automating the gathering and reporting of production data is the next best practice for increasing OEE. We have a deep grasp of the difficulty and limitations of manually gathering data from years of working with clients in the field. Our experience has taught us that a lack of data collection is a major roadblock to increasing productivity and improving OEE.

  1. On the shop floor, visualize and present real-time OEE.

Our ability to comprehend difficult data is greatly enhanced by visualization. We digest information faster when it’s presented in a visual format, and relationships are easier to spot. Both operators and team leaders are more engaged as a result of this.

  1. Double-check that all production halts are noted.

Once you’ve installed automated OEE software, another recommended practice to improve OEE is to make sure that all production steps are documented. Simply asking supervisors to check at the conclusion of each shift is a simple way to ensure that all stops receive remarks. 

  1. Establish cross-functional review and discussion sessions on a daily basis.

This best practice aims to increase communication and involvement among all departments involved in the manufacturing process.

So, if your company has a quality assurance department and a maintenance team, invite a representative from each to attend the daily meetings. The more minds you involve in problem-solving, the faster you’ll improve and the greater the quality of solutions you’ll be able to come up with.

  1. To enhance OEE, start reducing the Losses

The premise for determining OEE is the Six Big Losses. You can figure out where to focus your development efforts by looking into the causes and relative amounts of your plant’s six major losses.

Unplanned downtime should be the first large loss to focus on, according to us. Unplanned downtime can be caused by a variety of factors, including machine failure, which can be tracked using technical availability; and poor internal logistics, such as missing material or an operator. Because broken equipment can halt the entire manufacturing process, it makes sense that this would be the first priority.

  1. Conduct a root-cause analysis

It’s time to start problem-solving once OEE has revealed your six major losses. We offer Root Cause Analysis as a tool for this endeavor (RCA).

RCA is a method of problem-solving that assists us in determining the root cause of an issue. The notion is that by addressing the main cause rather than the symptoms, the problems will not repeat.

RCA is made up of six steps:

  • Define the occasion.
  • Determine the root of the problem.
  • Determine the source of the problem.
  • Look for solutions.
  • Make a move.
  • Check the solution’s efficacy.

How Can Folio3 AgTech Help You Achieve Food Safety KPIs?

With our food safety software, you can automate your food safety and compliance processes.

By implementing a food safety management system to automate your operations and eliminate paper-based forms, you can ensure the highest food safety standards and protocols while also following industry best practices.

The digital software allows you to develop digital checklists and dashboards and aids in the maintenance of a food safety culture throughout the organization, allowing everyone to work toward common food safety, quality, and compliance goals using consistent and synced data.

Free Consultation with AgTech experts

Food safety software also ensures that you have complete visibility and are always aware of what is going on. It assists you in making timely decisions by allowing you to track your processes in real-time and allowing you to take preventative steps.It is critical to have a food safety management system in place in your company if you want to run a profitable business. Food safety software assists you at every step of the process, from animal selection to packing and shipping. Here are some of the ways it can help you:

  • Costs of compliance are reduced.
  • Recalls are reduced.
  • Increases profits
  • Improves one’s reputation
  • Assists you in prioritizing clients and avoiding food poisoning.
  • Enhances the nutritional value of food
  • Ensures that you are adhering to federal food safety laws.
  • Employees’ efficiency and motivation are improved.
  • It aids in the organization of your processes.

FAQs:

What is KPI in food safety?

Safety KPIs are key performance indicators that act as benchmarks for a company’s health and safety operations. By tracking health and safety KPIs, a company may establish how safe the workplace is for its employees.

What are the benefits of using KPIs?

Some of the KPI benefits are as follows:

  • KPIs make it easier to comprehend complicated situations rapidly.
  • KPIs can help you set goals and track how well you’re accomplishing them.
  • KPIs help you communicate more effectively.
  • KPIs give decision-makers a solid foundation.
  • KPIs are simple to design and formulate.

 

About Folio3 AgTech Practice

Folio3 is a Silicon Valley based Digital Transformation partner for entrepreneurs and Fortune 500 companies with a special focus on digitization of Agriculture, Production and Companion Animal industry. Having worked with some of the world’s leading animal health companies, cattle associations, cow-calf operators, cattle feeders, beef processors and beef marketing companies, we have the design and development expertise required to help you digitize your manual procedures and practices, whether you’re a farm or a ranch owner, veterinarian, feedlot manager, nutritionist, or processing plant owner, we have got you covered.

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