.3 ways not to do it..
1. Keep buying stuff until you can’t shut the doors..
2. Buy a massive warehouse.. ..and lose track of everything.
– “i’m sure it’s here somewhere?”
3. A gentle discussion each month between sales and operations..
– ops blame the forecast accuracy – “tell us what to make!”
– sales blame ops – “you made the wrong stuff!”
– a complete lack of ownership
I’ve seen all of the above in the last 20 years…
SO WHAT DOES WORK?
A proper business wide process:
– starting with clear guidance from the top on commercial needs vs cash reality.
– then a forecast by product, built by sales.
– a focussed Sales and Operational Planning meeting to decide on what is actually possible – with agreement/compromise by the end.
– forecast accuracy and achievement measured month on month, to improve the process next time.
– process often owned by operations, but finance can play an important part, as they see both the margin and cash implications.
Alternatively a real expert can help you build the process – Richard Simpson knows his stuff by the way!
Have you seen any other stock horror stories over the years?
#fractionalcfo #stockmanagement #frustratedcartoonist