Thinking in terms of money & capacity in the industry the brake on innovation and impact force?
- marieke041
- Nov 19, 2024
- 2 min read
How do How do we bring different perspectives together at the boardroom?we bring different perspectives together at the boardroom?
A well-stocked order book with well-stocked machines in the factory, yet hindrance to innovation and growth due to different ingrained return-driven financial perspectives, interests and engineering thinking. Which in fact leaves behind clout and thus profit.
~ Perspectives ~
Within the industry, innovation and impact force is hampered by different return perspectives and goals that people represent within the company.
At the boardroom table, traditionally financially driven interests come together with the aim of making the right decision. For convenience, think of the CEO thinking about revenue, the CFO thinking about working capital and cash flow and the COO thinking about capacity and production effectiveness. Conflicting interests that do not reinforce each other in a rapidly innovating market, but influence each other negatively. This has a stagnating effect on clout, flexibility and depresses profits.
To optimally represent the financial interests at the board table in the changing market, it is necessary to explicitly look at the time factor in the business process. Thinking in time is thus fundamentally different and brings more balance, space and return, including financially.
~ Trends ~
We identify a number of trends within the industry that ironically provide growth, but also demand more precise management, with steering from a time perspective at the core. Some Trends that are visible include:
Increasing scale leads to larger flexible and (semi-)autonomous production floors, but also to more complexity.
The order portfolio has a growing number of more customer-specific products in smaller series. Shift towards High Mix Low Volume.
Supply chain flexibility: ability to respond flexibly to increasing demand (Move Rate) while maintaining quality.
~ Consequences ~
Without more precise control, the different perspectives will lead to order accumulation, additional (intermediate) inventories and overflowing machine fleets. Sales growth stagnates and this directly impacts the Supply Chain through increasing inventories and cluttered production plans.
Without additional measures, this will also affect delivery reliability and, in some cases, even product quality. Which will also impact work in progress, complexity on the shop floor and in the warehouses and lead to extra communication to get a grip on these.
This all feels very dynamic, the customer-centric agility and constant activity, but in reality, meanwhile, working capital is increasing and where the cash cycle (from purchasing to sales) is negatively affected.
~ Optimisation ~
The answer is to look emphatically at the process flow per order, within the entire chain and to plan, execute and then check and act on this in real time. Checking and then acting on time delivers additional benefits in chain cooperation in which communication and openness are essential.
Increasing productivity, quality, flexibility and cost savings are exactly what drives Koen Raukema and Jeroen Diepstraten, through sound business analysis, implementing business innovation and deploying LPC-MES tangible benefits for industry can be achieved.
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