How to focus on farm efficiency
Key performance indicators (KPIs) are defined as measurable values that demonstrate how effectively a business meets its objectives. They help managers evaluate how their dairies are doing at a given point in time.
We get nearly infinite information on financial, safety, feed, youngstock, reproduction and overall cow health. This data load can be overwhelming. Identifying and tracking a few simple, yet critical, KPIs can prevent farm managers from becoming bogged down in analysis and losing sight of what’s important to their operations.
1. Data must be accurate.
Inaccurate data is useless. Holding people accountable for meeting KPIs can only be done properly if measurements are accurate and timely. If you can’t measure it, you can’t monitor it.
2. Keep it simple.
Three to five KPIs are sufficient for employee reviews. This is also a sufficient amount for monthly meetings with the nutritionist, veterinarian and management team.
For example, a farm’s calf team may choose to track:
- DOA calves
- Percent of calves with total serum protein below 5.5 grams per deciliter
- Percent of calves treated prior to weaning
- Average rate of gain
If accurate, this data should provide a solid snapshot of how well calves are managed. If expectations for these four KPIs are not met, more research can be done to identify why and how to improve.
Now imagine if the same dairy also established three to five KPIs for the parlor, transition cow, feed and reproduction teams. Accurate data reviewed monthly or quarterly should provide a good snapshot of the dairy’s current performance.
3. Know what’s important and communicate it.
Owners can “drive the bus” by building a culture that empowers managers to make decisions based on the farm’s state goals. For example, if a goal is to achieve a 30 percent pregnancy rate, the reproduction team will need to establish KPIs to assess progress and attain that goal. They may select percentage of eligible cows inseminated and the breeders’ conception rate as two KPIs that help predict pregnancy rate.
Just as importantly, the reproduction and transition cow teams need to be on the same page. If the fresh cow team’s KPIs are not met in July, then the reproduction team may fall behind in September and October.
Think of it like building a house. The farm is the house, and it is made up of several walls or teams. Each KPI is a brick that reinforces the strength of that wall. When managers make the best decisions for their respective areas, it strengthens the entire structure without people wasting their time and resources by focusing on areas outside of their expertise.
Furthermore, when teams communicate effectively with each other, everyone works cohesively toward the same goal and recognizes how their actions impact others.
4. Does everyone understand the ‘why?’
Change becomes much easier when people understand why it is necessary. This is the responsibility of a manager. IF you set KPIs, you should be able to explain them in detail to the people who affect the outcome. If you can’t explain its value, it’s probably not a good KPI.
5. Is the KPI measured by lagging or leading indicators?
Lagging indicators record a change, are easy to measure, and are hard to improve or influence. Conversely, leading indicators influence change, but are often harder to measure. Leading indicators often make sense in retrospect, but only become clear after a lagging indicator proves the point.
For example, a KPI on any dairy would be to finish milking on time because it has a profound effect on milk production and dry matter intake as well as employee morale and performance. The time finished milking is a lagging indicator; it’s easy to measure, but doesn’t show the team how to improve.
Instead, a leading indicator would be whether the number of cows in pens is divisible by the number of cows on one side of the parlor. Are you partially filling a side several times throughout a milking? If so, you are wasting space and time, and won’t meet the expectation of this KPI.
Efficiency has a dollar sign
In this dairy climate, efficiency in every aspect of the dairy becomes critical. Make time to communicate with all teams to select KPIs that have the biggest effect on profitability and monitor them closely.
This article was written for the October 1, 2018 issue of Progressive Dairyman. Click here for the full article.
About the author: Peter Coyne is a dairy field service specialist and sales manager in northwest Wisconsin and eastern Minnesota. With a passion for dairy, he has extensive personal experience in dairy farm management and shares his expert knowledge with dairy producers in his area. Coyne works closely with farm employees to boost feeding efficiency, animal husbandry and management techniques. He provides consulting and training in nutrition and production management to dairy producers as well as Vita Plus staff and dealer partners. Coyne is also well respected as an expert in the dairy cattle showring.
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