‘You Can’t Manage What You Can’t Measure’

18-10-2011 | |
Bob Luedtke Information Technology

Yes, it is an old cliché, but it is still true. The animal feed industry is facing many challenges today, and the ability to adapt and change to changing market conditions is crucial to profitability, sustainability, and competitive differentiation. So what tools do you need to achieve this agility?

You may already have put procedures in place for your unique business operation. Creation and execution of best practices is the best place to start. These go beyond the Current Good Manufacturing Practices that many of you have to comply with. From a management perspective, which of these best practices are quantifiable so you could measure your actual performance against the best practices?
The key is to start with the measurable best practices in the areas that have the greatest impact on your operations. These will vary somewhat from company to company and from market to market. Possibilities include:
·         Ingredient purchase price compared to spot market prices
·         Margins by customer type by product type
·         Inventory runouts per month
·         Production tons per man hour
These practices should also evolve as your business evolves. In other words, continue to question the validity of the practices to ensure they truly have a large impact on your operations.
Once you have these key areas identified, you need to establish a way to measure them. Current information systems that you have in place may already allow you to measure and track the performance of many variables in your operations, but can they handle these new measures?
Get started today. Implement the information systems, business processes and reporting structure required to track and report on your performance against the best practices. Schedule specific times each week or month to look at actual performance and determine actions to improve or maintain your operations.
Many of the feed companies I have dealt with do not have a set of best practices documented and in use. Many have information systems that allow the appropriate data collection and monitoring – they just haven’t taken the time to implement the practice and discipline. If you do not have best practices in place and are not measuring performance, your company is at risk.
Have you implemented best practices? What are the measures you use to control your operations?

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