Key Performance Indicators (KPIs):

(1)

Key Performance

Indicators (KPIs):

(2)

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

(3)

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

(4)

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

(5)

Part I

How Most School Nutrition Professionals

Utilize

Key Performance Indicators

(6)

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)

(7)

2014 National Survey

cont.



Random Sample:

 700 SN directors

 Stratified by USDA Region

(8)

Sample: USDA Region

(n = 189)

%

Southeast

23 Southwest

18 Mountain Plains

16 Mid-Atlantic

14 Mid-West

13 West

10 Northeast

6

(9)

Sample: Student Enrollment

(n=203)

%

< 1,999

28 2,000-29,999

65 > 30,000 or greater

7

(10)

Sample: Position Title

(n=197)

%

SN Director

78 District-Level SN Supervisor

17 School-Level SN Manager

5

(11)

Sample: Education level

(n=189)

%

High School / GED

25 Associate’s Degree

15 Bachelor’s Degree

32 Master’s Degree

23 Doctorate Degree

5

(12)

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

(13)

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

(14)

11 Survey KPIs

cont.

7. Absenteeism Rate

8. Staff Turnover Rate

9. Inventory Turnover Rate

10. Days Inventory On-Hand

11. Percent Over-Production

(15)

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%}

(16)

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%}

(17)

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%

(18)

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%

(19)

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%

(20)

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

(21)

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%

(22)

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

(23)

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

(24)

Conclusions

KPIs are:



Useful for decision making



Valuable for program evaluation



Time consuming to calculate

(25)

Conclusions

• _{Most SN professionals}

agree that the KPI training

received is inadequate.

(26)

Take Home Message:

• More KPI training and resources

are needed for SN

professionals, especially those

that have the potential to

(27)

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

(28)

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

(29)

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?

(30)

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?

(31)

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

(32)

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

(33)

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

(34)

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

(35)

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.

(36)

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

(37)

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

(38)

Understanding Inventory

Turnover Rate

• Objectives

• How to calculate an inventory turn

• Understand why one needs to know and monitor

inventory turns

(39)

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

(40)

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.}

(41)

CONCLUSION



Understand you are running a business



Sound business practices in inventory controls

and monitoring food costs are imperative in

making your program successful

(42)

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

(43)

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

(44)

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

(45)

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

(46)

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%

(47)

Projected Effect of Raise on

Labor Cost

• $2,988,906 x 1.15 = $3,437,241

(48)

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

(49)

Determine Meals Per Labor Hour –

Edison Elementary

Meals

MEQ

_411Breakfast ÷ 3

137 _565Lunch

565 _10Supper

10 58After School Snacks ÷ 4

14 _ $15__A la carte ÷ 3

5 Total MEQ

731

(50)

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

Number MEQ

Convenience

Conventional

MPLH

(51)

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

(52)

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%)

(53)

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

(54)

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

(55)

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)

(56)

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

(57)

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

(58)