KPI Glossary
What are Key Performance Indicators (KPIs)?
“Key Performance Indicators” are quantifiable metrics used to assess performance.
Some KPIs are leading indicators, predicting trends. For instance: customer satisfaction is often a leading indicator of future sales revenues (which in turn makes Sales Revenues a lagging indicator). Leading indicators are often predictive drivers of other more complex KPIs. Overall loss rate is a critical KPI for Craft Breweries to monitor, but when loss rate increases (increasing material costs), what’s driving the trend? Tracking leading KPIs like Brewhouse Efficiency and Canning Line Loss Rate can provide insight on what losses are happening when in the process, which increases the effectiveness of troubleshooting right out of the gates.
This article on KPIs in the Harvard Business Review perfectly illustrates one method for deconstructing your business into a handful of critically important data points that measure the activities that drive towards your ultimate goal.
What drives success in your organization?
How do you measure it? How do you know you had a good day/week/month/quarter/year?
How do you set and track progress against your goals?
What data drives what decisions, and which decisions are you making without data?
How do you remove cognitive biases from your goal setting & performance tracking activities?
Deconstructing Data
Where to start? Craft Breweries produce an infinite amount of data, and it can get overwhelming. That’s when I think about Thanksgiving Dinner.
Unless you’re my Father-in-Law (he’s a “rip the leg off & chow down” type of guy), the first thing you do is carve the turkey.
You can’t put a turkey on a plate! First it needs to be carved into manageable slices that fit on a plate and leave the rest for seconds & sandwiches.
KPIs are the data that pack the most punch, the juiciest and best bytes.
As we develop this glossary, we’ll be breaking down the critical success drivers for Craft Breweries into their component KPIs by Department and asking for your help in developing the list, and ranking each KPI’s relevance.
What KPIs do you want to see here?
Craft Brewing Operations Data, Metrics & KPIs
Two of the most critical profit drivers for any Craft Brewery are Cost of Goods Sold (COGS) and Payroll. Brewing Operations is the heart of every Craft Brewery team, and where product costs reside.
- Product Costs: Raw Material Costs per Bbl (ideal & real)
- Efficiency metrics: Brewhouse efficiency; Canning and Kegging loss rates
- Payroll metrics: Direct Labor $ per Bbl; Positional Benchmarks; cans per packaging team labor hour
Craft Beer Sales Data, Metrics & KPIs
Sales is a lagging indicator. One mistake so many folks make is paying commission on Topline Revenues without understanding the fundamentals of how their business generates sales in a sustainable, scalable way. Instead, identify trends earlier by monitoring leading indicators, the predictors and drivers of revenues.
- Account base metrics: repeat buyer rates; C/Es per outlet
- Sales Strategy / Execution: accounts per rep; calls per week; Revenues per Direct Labor $
love data?
How Can We Help? What KPIs do you want to see?
Is a Cheetah faster than a Jaguar? What do you call a jar without a lid?