Management and control systems provide specific information for management purposes that enhances activities performed by a company. Performance indicators provide metrics that can guide the decision-making process, the evaluation of decision-making results, and the correction and adjustment of the management process, when necessary.
It is essential that each indicator be related to other indicators, or systems of indicators, in cause-effect relationship. In addition, indicators should be timely and show reward in the medium term; any longer, and managers will not be motivated to achieve it. Indicators must be accurate, objective, comprehensible, and practicable. In this sense, the cost of performing the measurements and of refining the indicator must be much lower than the benefits provided by it.
In agribusiness, the need for performance management is more evident considering the considerable increase in competition, including international competition.
Generating management information from consistent and reliable data is a constant challenge for rural producers, and for this reason performance indicators have become a foundation of strategic management in agribusiness. This practice, focused on the control of operations, provides temporal analysis on the evolution of the business and allows for informed evaluations and potential changes in management directions. Establishing performance indicators and standardizing assessment processes improve agribusiness management.
Management of a livestock enterprise faces challenges related to animals’ biological cycle and to factors related to the nature of the enterprise itself, including seasonal behavior. These sector-particular factors need to be considered during measurement. To manage the achievement of results, some performance indicators are essential, such as:
– Fertility index: measures the number of females that become pregnant among those physically and environmentally capable of becoming so;
– Birth rate index: measures the number of females that manage to give birth to live calves among those physically and environmentally capable of doing so;
– Mortality Index: measures the number of animals killed by accidents and / or diseases;
– Herd growth index: measures the rate of growth of the herd;
– Dairy cow productivity: measures acquisition rates of cows with high milk production;
– Absenteeism index: indicates the percentage of work hours in which employees were absent. The unit of measure to calculate the indicator is hours, as absenteeism in the agribusiness, even for a few hours, causes a significant impact in execution. (It is recommended to disregard reasons for absence from the indicator’s measurements, for even a justified absence impacts business performance.)
Several other indicators can be used to ensure that livestock performance is managed well. The periodicity of calculation of an indicator will vary according to the business, the market, competition, and management’s desire for information. Common periods are per crop, annual, semiannual and monthly.
Agriculture also has its own specificities, and these must also be managed using performance indicators. We will soon address performance management in agriculture in Management Tips. Make sure not to miss it!
Till next week!
Yanne Cunha Alves Souza – firstname.lastname@example.org