The best indicators don’t simply measure performance, they improve it,” says Rudy Giuliani, former mayor of New York City in his book “Leadership.”

When Giuliani ran for office in 1993, he promised to curb spiraling crime rates. To do that, Giuliani and his team tried something that had never been done before. They developed a system that collected and analyzed crime statistics every day and then used that information to spot patterns and identify potential trouble before it spread. The results were astounding. Crime rates declined dramatically — and stayed down. Every time a new indicator was added, a resulting positive change was seen. The key, says Giuliani, was to stop relying on historical data and develop reliable bits of information — indicators — that gave officers timely information that they could act on to fight crime.  

While this is just one example of key performance indicators in action, if you look around you’ll find they are used widely in business, explains Tom Fuhrmann, consulting veterinarian in Tempe, Ariz., and creator of the DairyWorks Key Performance Indicator system. Key performance indicators are the critical bits of information that help you judge performance, make management decisions, and affect change in each department every day.

Here’s how to select key performance indicators for your dairy.

KPIs defined

Every key performance indicator has two parts: 1. What you want to measure, and 2. What level of performance you anticipate or goals. Key indicators are selected from all of the information collected in each department. They are the bits of information that managers need to know daily which allows them to judge if and where problems may be occurring. Once a key indicator highlights a problem, the management team can examine departmental records to find a possible cause and develop a solution.

Key performance indicators should evaluate animal productivity (for example, calf death loss) and people performance (are day and night teams feeding colostrum properly?). They also should help you determine the cause of a problem; that is, whether it is a people problem — milkers not following a specified routine — or a system problem — the milking routine isn’t correct to prevent mastitis, says Fuhrmann. You will need to pick two to four KPIs for each department or each team of workers. (For more on organizing your dairy into departments, please see page 38.)

Each key performance indicator must start with a definition. For example, if you use milk fever as an indicator of fresh-cow management, then you can define the indicator as “the number of multiparous animals that develop clinical or subclinical signs of hypocalcemia.” That tells everyone what the indicator is.

Next, you’ll need to define a numerator and a denominator. The numerator (top number) is what is being measured. The denominator tells you over what period of time and for what group of animals the measurement is being taken. So, using the milk fever example again, the numerator would be the number of cows that develop milk fever and the denominator would be the number of animals second lactation or higher than freshened in the past 24 hours.

KPI =   The definition, numerator and denominator all ensure that the indicator is always measured and reported the same way.

How to select a KPI

KPIs should be selected from the results you expect from each department — often called quantitative or performance goals. (See chart at right.) Your performance goals must be measurable and easily trackable.

For example, if speed of milking is important, you’ll measure cows per hour for each shift of milkers. Or, if udder health is important, you’ll measure somatic cell count and incidence of clinical mastitis. Some example goals for the milking crew could include:

  • SCC < 250,000.
  • Incidence of clinical mastitis
  • > 300 cows per hour.

Or, for the calving and maternity team, you might track total serum protein levels in calves and the number of calves born dead on arrival. Your performance goals could be:

  • At least 90 percent of calves with greater than 5.0 total blood serum protein on day two.
  • Calves born dead on arrival < 8 percent.

Select indicators that can be measured daily and are easy to report.   They also should be actionable items. For example, each of the indicators listed above gives you a specific numeric goal. You can use that goal to set thresholds for when to take action, to monitor progress and spot trends that signal the onset of a problem when actual results exceed your goals.

Key performance indicators are selected from the performance goals set for each department. They should help you measure progress toward your stated goals.

Key indicators should not be historical in nature. They should be based on real-time data and give you immediate insight. For example, key indicators that are historical in nature include calving interval and average days open. Better indicators for the breeding team include percent of cows pregnant by 125 days in milk, heat detection rate, or pregnancy rate.

If you have not already set quantitative goals for each department and for each employee, work with your veterinarian or other consultants to develop them. Use the chart below to help get you started.

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