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Recordkeeping, Benchmarking and
the Bigger ‘Sustainability Picture’Ontario Sheep Farmers Convention | 26 October 2017 | Alliston, Ontario
Good record-keeping is knowing what you have, where you have
it, and how long you should keep it.
Outline
Background and Context
Risks & Opportunities: Why Record and Benchmark
Materiality & Value: What to Record and Benchmark
Informing Strategy
Consider…
Materiality: What is relevant to the enterprise?
Benchmark: What can realistically be measured?
Waste: Anything that consumes time or resources
but does not add value to the product/service
About
Focus
Sustainability Planning & Implementation
Succession Planning
Change Management
Through Collaborations and Projects
Harnessing the collaborative power of our members to accelerate widespread adoption
of sustainable agricultural practices.
Sustainable Agriculture Initiative Platform
Learning and sharing
in a safe & pre-competitive space
Created in 2002
by the food
industry
90+ members
Tools and Guidance
> Arable &
Vegetable
> Fruit & Nut
> Dairy
> Beef
Global with
multi-stakeholder group
Working Groups:
FULL MEMBERS*
AFFILIATE MEMBERS
*In SAI Platform statutes: ‘Active members’
Farmer Co-ops Traders Processors Manufacturers Retailers
Engagement along the supply chainenables translation and transfer of value… usually as information
* not actual situation; example supply chain only
Nearly 60% of businesses in North America and Europe know that information is important to gaining a competitive advantage.
Waterhouse Cooper (PwC)
Information volume for most businesses doubles every 18-24 months.
McKinsey & Company
Beyond Traceability…
Recordkeeping is understanding your assets
A tool to better business:
1. Meet traceability/food safety requirements
2. Limit liability
3. Increase profitability
reduce cost
save time &
resources
identify waste
increase market access
What Areas Should I Understand?
Enviromental
Soil Condition
Water Use
Nutrient Management
Waste Management
Biodiversity Impacts
Air Quality
Social
Health and Safety
Labour Conditions
Economic
Financial Stability
Market Access
Legal Compliance
“What gets measured, gets managed.”
Peter DruckerFather of Management Theory
What can our records tell us?
✓ Internal comparison and industry comparison
✓ Identify trends
✓ Highlight problem(s)
✓ Recognize limitations
✓ Discover potential strategies to explore
Why keep financial records?
Performance Improvement (waste eliminating)
Lenders & Investors
Including succession/transition planning
Accountant
Government
Canadian Revenue Agency (CRA)
Assistance programs (OMAFRA, RMP, etc.)
Why keep detailed financial records?
To know which enterprise(s) are making (and maybe more importantly) losing money.
To track income and costs for a cash flow projection or lender.
To plan long-term to meet vision
Pass farm to daughter/son
Sell farm to neighbour
Increase business and acquire/expand enterprises
It’s difficult to start, but not difficult to do.
Using Your Records: Benchmarking
Why Benchmark?
19
Identify and assess gaps
Determine
range of needs
Determine priority needs
and implement change
Plan for re-assessment
and improvement
measurements
Setting Benchmarks
Develop SMART Goals
•Define goal
•Who is involved? What is being accomplished? Where is being done? Why am I doing this? Which resources do I need?
Specific
•Can I track progress and measure outcome?
•How will I know I reach my goal?
Measurable
• Is it reasonably likely to be accomplished?
Attainable/Achievable
•Does it contribute to my long-term vision?
Relevant
•Does it have a time limit?
Timely
‘SMART Goal’ examples…
By 2025, my farm will be 20% more profitable than now (2017)
By 2020, I will net 5% more per pound than now (2017)
I will diversify my markets by one new one each year for the next five years
My daughter will take over 60% of the decisions and 80% of the farm labour in
three years
Step #1:
Consider information an asset
Putting a dollar value on information can be difficult - it’s easier to
view it as a cost.
Give thought to how information can:
Drive your business,
Differentiate your company from its competitors, and,
When property used, actually help you make money.
If you're going to get value from your information, view it as an asset.
Step #2:
Look for ROI (return on information)
As you start to view information as an asset, it's easier to
determine its potential return.
Evaluate your information access and workflow plans.
As part of this exercise, you can also determine how to
optimize both plans for greater efficiencies.
Maximize ROI by keeping in mind the potential business value
of each type of information asset.
“There is nothing so useless as
doing efficiently that which should
not be done at all.”
Peter Drucker
Step #3:
Take a “smart risk approach”
Reduce information collected to what is material
Some aggregate measures and benchmarks
Some very granular measures and benchmarks
Step #3:
Take a “smart risk approach”
Ask yourself:
1. Is this information for internal or external
comparison/benchmark? (efficiency)
2. Is it to meet market requirements or give
preferential access? (margin/market security)
3. Is it to prove financial worth/business case
(lender/investor)
Step #4:
Apply analytics to answer questions, like:
What can information mean for the future of your
business?
Where is opportunity for growth?
Which efficiencies can you identify?
Which data will help you access key markets?
… what are your questions?
Step #4:
Apply analytics to answer questions, like:
Apply some easy data analytics:
Annual comparisons
Enterprise comparisons
Determine why some activities cost less or return more
and capitalize on these
Comparisons compensating for external variables (inflation,
commodity pricing, market fluctuations, etc.)
This is the easiest way to make
improvement ‘business as usual’
It’s fine to celebrate success, but it is more important to heed lessons of failure.
Bill Gates
… but first you need to know what constitutes failure!
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