How To Help Enterprises Improve Their Cash Flow

< p > improving operational efficiency and improving cash flow is not difficult. The following three tips can help you.

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< p > < strong > the first step shortened cycle < /strong > /p >

< p > for enterprises whose orders are less than a href= "http://www.91se91.com/news/index_c.asp" > production /a >, such as equipment manufacturing, shipbuilding, OEM OEM enterprises, etc., the cycle refers to the time needed to receive orders from customers to products.

And for the production oriented enterprises, such as consumer goods, clothing, steel and other enterprises, the cycle refers to the time required for the production plan to be shipped according to the market forecast.

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< p > the longer the cycle is, the more funds the company will occupy and the higher the cost of capital. From the point of competition, it is more concerned about the differences within the industry than the differences among industries. The stronger the competition in the same industry, the stronger the competitiveness of the enterprises. This is reflected in your speed of delivery and capital cost.

For example, the automotive industry supply chain cycle (from the two tier suppliers to the final assembly line), the British automobile companies are 40 days, the Japanese automobile companies in the UK are 5 days, the supply chain management level can make the cycle performance difference 8 times. No wonder Japanese car service is better and the price is cheaper.

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There are many reasons for the poor performance of P cycles, such as chaotic planning system, unbalanced production mode, unstable quality, equipment failure and imperfect supplier matching.

According to my experience, 80% of the reasons lie in the planning system and mode of production.

Here we explain the plan system first, and the way of production is explained in the next move to reduce inventory.

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< p > we have helped a company shorten its cycle by 35% in 2 months by improving the planning system. The original planning process of the enterprise is fragmented, and there is a lack of a complete system from the plan, the plan, the plan control to the plan adjustment. Only the plan is issued, the process is not controlled in the middle, the on-site Kanban system is not visualized, the information pmission is not smooth, the supporting links between the front and back terminals are not up, each process is always in a state of waiting for lack of material, and finally, when it is not delivered, it is known that it is too late to report.

In addition, the production plan and the material procurement plan are different from each other. Materials are often unable to arrive on time. The two departments accuse each other of complaining and delay delivery.

Through the integration of information flow, we build a complete plan process form, and solidify in the ERP information system and field Kanban implementation, emphasize the monitoring of the plan results and process, integrate the organizational structure, make it serve the order delivery process, the result greatly improves the delivery performance of the enterprise.

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< p > we have also helped another large equipment manufacturing enterprise successfully change the serial planning process to parallel processes by successfully compressing the cycle by more than 50%. The planning process of the enterprise has 18 links from sales bidding, contract signing, design drawing, procurement, production to acceptance and delivery. After optimizing through parallel technology, the link reduced to 10, and the delivery cycle reduced from 6 months to 3 months, and the cash flow has been greatly improved.

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< p > < strong > second measures to reduce inventory < /strong > < /p >

< p > from the perspective of < a href= "http://www.91se91.com/news/index_f.asp" > operation < /a >, inventory is not a property of an enterprise, but a waste.

TOYOTA calls the inventory "the source of all evil", which not only backlogs capital, increases interest expense, but also causes unnecessary pportation, maintenance, and space, and easily causes material overdue, unused, resulting in huge waste. More importantly, inventory will become a "buffer" for problems. When a large number of stocks exist, many problems such as delay in delivery, equipment failure, quality defects, and management errors will be hidden and not perceived by management. It is thought that everything is in good order, and that it is a stock that conceals some private "fire fighting" behavior. Therefore, inventory is not only a killer of cash flow, but also a killer of management problems.

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The reason why the P system has been elaborated in the last move is mainly related to the influence of the mode of production.

Lean management thinking emphasizes the establishment of continuous and continuous processes, so as to make inventory materials flow faster and improve turnover speed.

But in many enterprises' actual production process, the process is intermittent, from material storage, parts processing, assembly, testing, packaging and warehousing to product shipment, every link has pause, every process has a large number of WIP, this batch queuing production mode elongated the production cycle and also increased the inventory. The reasons for not continuous production are: the traditional layout of production facilities according to the function, the production switching time of different types of products, the unstable quality and equipment, and the multiple set of buffer stock, the lack of planning connection and so on.

Most enterprises can bring more than half of inventory reduction after implementing lean production.

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< p > in addition, because inventory accounts for the vast majority of enterprise assets, < a href= "http://fz.sjfzxm.com/" > inventory turnover rate < /a > greatly affects asset turnover rate, and directly affects shareholders' interest rate of return on investment, because the rate of return on investment = sales profit rate * asset turnover.

Therefore, enterprises with high profit margins do not necessarily have a high rate of return on investment of shareholders. A company that makes large equipment and a high tech new material has a profit margin of up to 30%, but the rate of return on investment is not as good as that of ordinary enterprises. The reason is that asset turnover is too low, even 1 times.

Although the typical retail industry has a low profit margin, but the asset turnover rate is higher than that of the general industry, so it can also achieve a good return on investment. Although real estate developers claim to be profiteering industries, they like to hoarding, and asset turnover is very low, usually less than 0.3, so the rate of return on investment is not high. Vanke is more intelligent, and often returns quickly through the price reduction strategy. The return on investment caused by the increase in asset turnover is enough to offset the decrease in profits caused by price decline.

Unfortunately, most developers do not understand this truth, and still cover up.

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< p > < strong > the third recruit management performance and effective incentive < /strong > < /p >

By adopting these measures, P can not get the improvement of operational efficiency and cash flow once and for all, because the effective implementation of these measures depends on the support of management structure.

Is the organizational structure set up according to the needs of business processes? Do employees assume corresponding responsibilities, get effective incentives, and enthusiastically devote themselves to efficiency and cash flow improvement? < /p >

< p > when we helped a company to set up a planned PMC control department, the cycle and inventory performance of the enterprise were greatly improved.

In the past, the production plan was made by the production department, and the material requirement plan was done by the purchasing department. Several departments such as production, sales and procurement often wrangled, and each of them began to make decisions based on the interests of their own departments. They shirk their responsibilities when they had problems, and the general manager had to spend a lot of time coordinating them.

Since we have dispatched relevant departments to set up a new PMC department, the general manager has been completely liberated. The PMC Department has become the first person responsible for the delivery performance of the company. It is responsible for managing the whole process of receiving orders from customers, organizing procurement, production and delivery, coordinating production and supply and marketing balance, controlling delivery cycle and inventory, and checking the execution of departments such as sales, production and procurement.

The company's cycle and inventory indexes are abstracted and decomposed into departments such as sales, production and procurement from the PMC department. For example, the cycle is divided into several stages, such as contract review, design cycle, procurement cycle and production cycle.

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