by John Clark, on 6/10/16 1:32 PM
Things today move so quickly that your “business reflexes” have to increase exponentially to keep your business on a course for success. Business reflexes refers to three specific skill sets:
- Operations — The intelligence to respond to orders with the correct amount of time and effort.
- Finance — Ensuring that your money works as hard as you
- Technology — Using your operational and historical data to drive your business
Operations: Better, Faster, Cheaper Like a well-tuned athlete, your plant is a combination of intelligence, strength, and quickness. While you can be successful with two of these three attributes, excellence requires all three.
Intelligence is now imbedded in your software, but do not forget the importance of human knowledge.
Do not allow yourself to pigeonhole staff members based on their position, age, or gender. The best-run companies are a compendium of the entire knowledge base of the staff, not just those who reside at a certain level on the organization chart. Strength is
a reflection of your ability to convert accurately. Technology allows you to plan, produce, value, distribute, and analyze each of these steps quickly to increase throughput and decrease costs.
Your enterprise resource planning (ERP) system should not only allow you to process an order from estimate to posting of cash, but should also collect multiple data points that you can use as part of a business intelligence tool to detect trends, anomalies, and opportunities.
Finance: A Dollar Saved
Cash flow is very different from sales, orders, and earned revenue. It can come from many parties—customers, banks, vendors, investors—and can take many forms—debt, equity, etc. Cash in any industry is king. Consider the following:
- Use your vendors as a bank by extending payment terms, using credit cards, and tying vendor payments to customer payments upon
- Asset-based loans allow companies to leverage all assets (receivables, inventory, intangibles) to squeeze collateral to create credit
- Factoring uses accounts receivable to provide speedy cash flow for growing
- Many executives and entrepreneurs focus too much on the profit and loss and don’t manage the balance sheet. Find other assets to leverage. Pay attention to ratios such as debt-to- equity and current ratio.
- Whispers can create noise in collections. Stay tuned in to customer service and quality issues—they can be cash killers. High finished goods inventory and delayed customer ship- ments can stretch cash Consider invoicing clients and requiring payments for shipments on hold.
- Create a proactive collections process, paying close attention to the terms and conditions of sales and payments. Timely collection calls and prompt issue resolution can keep the cash flowing. Invoice customers electronically by leveraging technology to speed up the invoicing process with electronic signature for proof of delivery.
Technology: Investing in Tomorrow
A new generation of hardware and software are combining to provide you with an unprecedented understanding of your business. Not only do wireless and cellular technology allow your plant to communicate seamlessly, but now even remote workers, truck drivers, and sales staff have the technology keep your company functioning without regard to geography or time.
Plants from coast to coast are investing in new machinery and new processes. Most of these new machines are being placed into service to address the industry trend of smaller orders being produced more frequently. The advent of business intelligence solutions and other tools take the mounds of your financial and operational data, and detect the trends and reference points in not only your business, but that of your customers and vendors as well. As your business and business systems grow, you are creating reams of data that will need more sophisticated tools to point out areas of opportunity, as well as predict problems with vendors or receivables before issues become critical.
At the end of the day, your business is moving faster than ever. This time com- pression presents not only challenges, but also opportunities for those who wisely invest in the tools and technologies to keep the converting loop tight and timely, while creating metrics to find other areas of opportunity.