key performance indicators (kpis) - school nutrition · pdf filenational survey results - how...

© COPYRIGHT 2016 SCHOOL NUTRITION ASSOCIATION – #ANC16 – SAN ANTONIO, TEXAS

Key Performance Indicators (KPIs):

Practical Applications


Presenters:

Keith Rushing, PhD, RD Research Scientist ICN, ARD Hattiesburg, MS Gay Anderson SNS Child Nutrition Director Brandon Valley Schools Brandon, SD

Julie Boettger, PhD, RD Director, Food & Nutr Services School City of Hammond Hammond, IN


Topics:

National Survey Results - how KPIs are utilized by School Nutrition (SN) Directors

Real Life Examples – Successful Utilization of KPIs for Decision Making & Program Evaluation.

Basic Revenues & Expenses Cost as a Percent of Revenue Meals Per Labor Hour Absenteeism Rate Breakeven point

Per meal costs Calculating MEQs Days Inventory On-Hand Inventory Turnover Rate


Learning Objectives:

Participants will: Understand how most SN professionals

utilize KPIs Be able to apply KPIs for decision

making Be able to utilize KPIs for program

evaluation


Part I

How Most School Nutrition Professionals

Utilize

Key Performance Indicators

Speaker: Keith Rushing


2014 National Survey

Explore SN Professionals’ Usage & Perceptions

of KPIs

105 Multiple Choice Questions

Development Assisted by SN professionals:

Expert Panel (8)

Review Panel (21)


2014 National Survey cont.

Random Sample: 700 SN directors

Stratified by USDA Region Response Rate: 29% (N=205)


Sample: USDA Region (n = 189)

%

Southeast 23

Southwest 18

Mountain Plains 16

Mid-Atlantic 14

Mid-West 13

West 10

Northeast 6


Sample: Student Enrollment (n=203)

%

< 1,999 28

2,000-29,999 65

> 30,000 or greater 7


Sample: Position Title (n=197)

%

SN Director 78

District-Level SN Supervisor 17

School-Level SN Manager 5


Sample: Education level (n=189)

%

High School / GED 25

Associate’s Degree 15

Bachelor’s Degree 32

Master’s Degree 23

Doctorate Degree 5


Sample: Years in Current Position (n=194)

%

1 to 5 years 34 6 to 10 years 24 11 to 15 years 18 16 to 20 years 9 Greater than 20 years 15


11 Survey KPIs:

1. Average Daily Participation

2. Cost Per Meal

3. Cost as a Percent of Revenue

4. Revenue Per Meal

5. Breakeven Point

6. Meals Per Labor Hour


11 Survey KPIs cont.

7. Absenteeism Rate

8. Staff Turnover Rate

9. Inventory Turnover Rate

10. Days Inventory On-Hand

11. Percent Over-Production


Level of Understanding of KPIs (n varies from 201 - 204)

Adequate Partial No

Average Daily Participation 96% 3% 1%

Meals per Labor Hour 88% 10% 2%

Cost Per Meal 85% 13% 2%

Revenue Per Meal 77% 22% 1%

Staff Turnover Rate 73% 21% 6%

Absenteeism Rate 73% 23% 4%


Level of Understanding of KPIs continued (n varies from 201 - 204)

Adequate Partial No

Cost as a Percent of Revenue 71% 24% 5%

Breakeven Point 70% 24% 6%

Days of Inventory On-Hand 65% 28% 7%

Inventory Turnover Rate 61% 31% 8%

Percent Over-Production 45% 36% 19%


Use of KPIs for Decision Making (n varies from198 - 204)

Yes

Average Daily Participation 91%

Cost Per Meal 89%

Meals Per Labor Hour 82%

Revenue Per Meal 64%

Cost as a Percent of Revenue 61%

Breakeven Point 53%


Use of KPIs for Decision Making continued (n varies from198 - 204)

Yes

Days of Inventory On-Hand 44%

Absenteeism Rate 42%

Inventory Turnover Rate 36%

Percent Over-Production 33%

Staff Turnover Rate 30%


Other SN Professionals in District that Use KPIs (n varies from 199 - 203)

Yes No ?

District Level Supervisors 57% 30% 13%

School Level Managers 43% 57% 10%

Cooks 15% 79% 6%


Other SN Professionals in District That Receive KPI Training (n varies from 190 – 198)

Yes No % ?

District Level Supervisors 47% 39% 14

School Level Managers 40% 50% 10

Cooks 9% 84% 7


Agreement with KPI Statements (n varies from 201 – 203)

Agree / Strongly Agree

KPIs are useful for decision making 98%

KPIs are valuable tools for evaluating a school nutrition program

96%

KPIs are time consuming to calculate 76%


Agreement with KPI Statements continued (n varies from 201 – 203)

Agree / Strongly

Agree

KPIs are easy to calculate 72%

KPIs are difficult to interpret 39%

School nutrition professions receive adequate training on KPIs

13%


Conclusions

Understanding of most KPIs is good, but room for improvement

The majority of SN professionals do not use 6 of the KPIs for decision making

Other than directors, most SN professionals receive no KPI training, yet 65% of Supervisors and 43% of Managers use KPIs


Conclusions

KPIs are:

Useful for decision making

Valuable for program evaluation

Time consuming to calculate

Easy to calculate and interpret


Conclusions

•Most SN professionals agree that the KPI training received is inadequate.


Take Home Message:

•More KPI training and resources are needed for SN professionals, especially those that have the potential to become program directors.


Part II

Application of KPIs for Decision Making and Program Evaluation

Speaker: Gay Anderson

Per meal costs Calculating MEQs Days Inventory On-Hand Inventory Turnover Rate


Per Meal Costs

• Objective:

• Share the importance in knowing and understanding daily meal costs.

• Understanding how to calculate meal costs

• What to do with this information once you have it available


What is an acceptable standard for a daily meal cost?

• There are not any solid figures to use as we all have unique variables in each district and schools that are factored in. • Are you a full service kitchen?

• Do you satellite food to other locations?

• What quality levels of food do you purchase or expected to purchase?

• What is your past average?

• Where do you want your %’s or costs to be?

• Setting Goals for your program


Per Meal Costs

• You are the one to determine the standard that is right for your operation • How to get started?

Calculate your Meal Equivalents (MEQ’s) • What is your revenue for your operation?

• MEQ’s will vary from school to school


Calculating MEQ’S

Standard conversions 1 Lunch = 1 MEQ 3 Breakfasts *.67 = 2 MEQ’s 1 Dinner = 1 MEQ 3 Snacks = 1 MEQ Ala Carte Sales / Total Federal Reimbursement


MEQ’s Example

• 100 Breakfasts X .67 = 67 MEQ’s

• 455 Lunches = 455 MEQ’s

• 70 Snacks X .33 = 23 MEQ’s

• Nonprogram Foods $432.00 / 3.07 + .06 + .29 (3.42) = 126 MEQ’s

• Total MEQ’s for day = 671


MEAL COSTS & MEQ’s

• Total Expenses for the day are?

Total Food Costs

Total Labor

Total Other

• Can Demonstrate individually or as a total

• Expenses were $1971.65 / MEQ’s 671 = 2.94

Where do you need to see yourself


MEAL COSTS & MEQ’s

• I prefer to take food out and look at this separately

Total Food Costs / Total MEQ’s provides a clean

picture of the day to day meal costs and you are

better able to compare menus and days you have

Peaks in Cost and days you have your Lower Costs

Total Food Cost = $1060.18 / 671 MEQ’s

PER MEAL COST = $1.58


Understanding Meal Costs

• Note: One other significant factor in completing this process is in planning the menu and setting a target for you daily meal costs.

• Strongly suggest calculating out what an average

per meal cost is when writing the menu based on

planning. This will assist as you monitor multiple

locations and compare variances along with what

took place on the specific day.


Day Inventory On-Hand

• Begin by finding out what you need based on deliveries • Money on the shelf is costly

• How many times should inventory be turned each month and why? • 3-4 times per month

• System controls

• Money on the shelf

• Quality factors

• Prevents or lessens the opportunity of theft


Days Inventory On-Hand

• How to calculate # of inventory turns.

Need to know total cost of food for previous month

Beginning Inventory + Purchases – Ending inventory

= Cost of Food Used

Cost of Food Used / by two = Average Inventory

Cost of Food Used /by Average Inventory = Inventory turns


Understanding Inventory Turnover Rate

• Objectives

• How to calculate an inventory turn

• Understand why one needs to know and monitor inventory turns

• Suggestions for improving turns


INVENTORY Turnover Rate EXAMPLE

• January ending inventory $10,000. PLUS

• February purchases $50,000 =

• $60,000

• February ending inventory $ 8,000 -

• Total cost of food $52,000 / 2

Average Inventory $26,000

Total cost of food/average inventory = 2 turns


How To Change Inventory Turnover Rate

Reduce number of SKUS – Find ways to use items

in multiple ways.

Cycle menus

Set pars for what managers can keep on hand

When possible share between sites.


CONCLUSION

Understand you are running a business

Sound business practices in inventory controls

and monitoring food costs are imperative in

making your program successful

.


Part III

Application of KPIs for Decision Making and Program Evaluation

Speaker: Julie Boettger

Basic Revenues & Expenses Cost as a Percent of Revenue Meals Per Labor Hour Absenteeism Rate Breakeven point


School City of Hammond

• 22 schools in greater Chicago area, 14,000 students

• 140 employees with 15-18 benefit days/year

• Wages in 2013-14 $7.81 – 17.69

• Wages in 2015-16 $9.02 – 20.16 (14-15% increase)

• CEP in elementary schools

• 80% free/reduced in secondary schools

• All on-site preparation

• 7 At-Risk Supper sites

• After School Snacks

• 6 Fresh Fruit and Vegetable Program sites

• Summer Food Program


Revenues and Expenses Revenue (Income)

Federal Reimbursements $ 7,432,520

Cash from meals, adults 951,053

FFVP 218,912

State Matching 16,040

Other Revenue 31,224

Total Revenue $8,649,749

Expenses

Food Used (-rebates) $3,340,044

Labor (including benefits) 2,988,906

Other direct 1,525,739

Other indirect 0

Total Expenses $7,854,689

Profit (Loss) $795,060


Cost as a % of Revenue

• Divide each cost by total revenue

• Example labor and benefits ÷ total revenue

• $ 2,988,906 ÷ $ 8,649,749 = labor cost is 35% of revenue


Cost as a % of Revenue Revenue (Income) % of Revenue

Federal Reimbursements $ 7,432,520 86%

Cash from meals, adults 951,053 11%

FFVP 218,912 3%

State Matching 16,040 0%

Other Revenue 31,224 0%

Total Revenue $8,649,749 100%

Expenses

Food Used (-rebates) $3,340,044 38%

Labor (including benefits) 2,988,906 35%

Other direct 1,525,739 18%

Other indirect 0 0%

Total Expenses $7,854,689 91%

Profit (Loss) $795,060 9%


Projected Effect of Raise on Labor Cost • $2,988,906 x 1.15 = $3,437,241

• $3,437,241 ÷ $ 8,649,749 = 39.7% Labor Cost


Meals Per Labor Hour (MPLH)

• Measure of productivity • Meal equivalents (MEQ) ÷ labor hours • Labor hours includes site based labor:

• Manager • Kitchen staff • Substitutes

• Labor does not include • Personal illness, vacation, holiday pay • Supervision of students

• Compare site productivity against industry standard for similar type of production, service, and size of operation


Determine Meals Per Labor Hour – Edison Elementary

Meals MEQ

___411__Breakfast ÷ 3 137

___565__Lunch 565

___10__Supper 10

__58__After School Snacks ÷ 4 14

_ $15__A la carte ÷ 3 5

Total MEQ 731

Labor Hours 36


On-Site Staffing Guidelines

Example:

731 MEQ ÷ 20 MPLH = 36.5 Labor Hours

20 22 17 19 701-800

16 18 14 16 301-400

Low High Low High Number MEQ

Convenience Conventional

MPLH MPLH


Hammond MPLH

• Target 10 – 21 MPLH

• Actual Range is 9.7 – 25.6 MPLH

• High schools tend to be below target

• Middle tend to be above target


Total Labor Costs in Hammond

• Total labor costs affected by • Productivity

• Labor rates

• Cost of benefits

• Absenteeism (paying twice for same labor hour)

• Turnover rate (17.7%)

• Vacancy rate (9.9 % of positions are not filled)


Absenteeism Rate • The rate at which employee miss work due to illness,

personal business or other reasons.

• ((# hours lost for the period) ÷ ((number of days in the period x average # of hours worked for the period)x (average # employees during the period))) x 100 = absenteeism rate

• Step 1 - (number of days in the period x average # of hours worked for the period)x (average # employees during the period) THEN

• Step 2 - (# hours lost for the period) ÷ the calculation above

• Step 3 - The calculation above x 100 = absenteeism rate


Hammond Absenteeism

• 6.21 average hours/day; 156 days in year, 120.5 average number of employees, 5,675.25 total days absent YTD

• (5,675.25 ÷ (120.5 x (156 x 6.21))) x 100 = 4.86

• Range for personal absenteeism 25% - 0%

• Policy is more than 5% (9 days for the year) absenteeism is considered excessive

• If employee uses all benefits days they can be terminated

• If their attendance is poor they are eliminated from summer food program assignments


Breakeven Point (BEP)

• Point at which revenues = expenditures

• Used for determining whether a program/project can be profitable or self-sustaining

• Fixed costs (FC) in dollars ÷ 1- (variable costs [VC]÷ revenue) OR

• Fixed costs (FC) in dollars ÷ 1- (variable costs as % of revenue)


BEP Case Study – Saturday Success Camp Proposed Revenue

Item Revenue FC VC VC%

Breakfast 100 @ $1.99

$ 199.00

Snacks 100 @ $ .84

$ 84.00

Food Cost $ 113.20 40 %

Labor Cost $17.63 x 4 hrs

$ 70.52

Supplies $ 14.15 5 %

Totals $283.00 $127.35

BEP $70.52 ÷ .55 = $128.22


Actual Revenue for Saturday Success Camp Item Revenue Fixed Cost Variable Cost VC %

Breakfast 50 @ $1.99

$ 99.50

Snacks 50 @ $ .84

$ 42.00

Food $56.50 40%

Labor $17.63 x 4 hrs

$ 70.52

Supplies $ 7.08 5%

Totals $ 141.50 $63.58

BEP $70.52 ÷ .55 = $128.22


Questions?

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