Breweries have access to so much information these days it’s easy to get lost in all the data.
So often we are distracted from what’s most important by things that are least important. These small distractions are known as the trivial many, and they are everywhere.
Today’s Brewery Best Practice: Create a Scorecard of Daily Numbers to capture the critical financial information you need to look at each day.
The Daily Numbers keep the focus on the most important parts of your business: The Vital Few.
This post provides tips on how to identify your Daily Numbers, and how to create your daily reporting snapshot. The result will be a tool you can use every day to provide clarity and focus for your business.
Key concepts for your Daily Numbers
- Capture only the Vital Few. Include only need to know information – measure results that matter. Lose the nice to know stuff. Less is more. Focus on two or three key metrics that address your biggest problem, or biggest opportunity.
- Review the numbers every day, as a reminder of what is most important. There is power in seeing the numbers every day – remembering what’s most important. We are easily distracted with trivia, but the Daily Numbers remind us to stay focused on what is most important.
- The numbers must compel you to take action. The Daily Numbers should be action-oriented information…if they aren’t, they don’t belong on your scorecard.
Borrow this Daily Numbers Scorecard
This scorecard measures sales goals, accounts receivable outstanding, inventory on hand, and cash in the bank. The Daily Numbers show whether there’s a collection problem, too much inventory on-hand, or a pending issue with the cash balance.
Other examples of Daily Numbers:
- Margin $ per BBL
- Inventory count variance
- Overtime hours for the month
- Payroll as a % of Revenue
There are countless metrics you could include in your reporting, but the key is to find the Daily Numbers that are most important for your brewery.
Below are tips to find your Vital Few
- Think like Peter Drucker: What gets measured gets managed. First, make sure you are measuring the right thing. Perhaps it’s one of the metrics above, or it’s something else, so start with a few questions:
- What keeps you awake at night? What is the one thing you are most concerned about in your business? Clearly identify it, and figure out how to measure it.
- What does your gut tell you that might be going wrong in the company? What system can you put in place to track the problem, and set a goal to improve?
- What is the info you know is most important (not just most interesting)? Just like the speedometer and fuel gauge on your car – what is the essential information you need to know each day?
- What problem(s) do customers complain about? The customer is always right (except when they’re not). Are they right this time?
The Daily Numbers can be a wonderful tool to keep you focused on the most important issues in your brewery.
We are only human, and our memory isn’t getting any better, the Daily Numbers help us remember the top priority every single day. Keep it simple, identify your Vital Few, and take action to improve financial results in your brewery today.