If You Want To Improve Your Cash-Flow By 15% Or More
Meaning – A Safer More Secure Future
flow Beyond Lean
Here’s Some Good News…..
Reduced WIP By 65% Finished Goods By 45% Obsolescence By 25%
Background: A Finnish manufacturer of plastic moulded mobile phone components in China was supplying high volume, limited life-cycle, high variability products principally to Nokia. The management was under intense pressure to deliver just-in time (JIT.) They were forced to meet this commitment from Just-in-Case (JIC) inventory. Batch quantities were big enough to minimise unit costs, but they were so big that they took a long time to produce. They tied up plastic moulding machine capacity needed to produce their wide variety of products. Management was looking to invest in more machines and to extend the factory to avoid late delivery penalties and losing other customers.
Action: We showed them how to optimise batch quantities with speed of response, unit costs, inventory carrying costs, capacity and cash-flow. Minimum run to recovery quantities were calculated for each product that were just sufficient to recover the time lost to set-ups. Machine set-up times were also optimised with batch quantities and inventory. Productivity and overhead recovery were also improved in this way, so there was no need to invest in more machines. We remained alongside to support their design and deployment of finite capacity planning tools to redefine the mix vs. capacity criteria of the machines.
Benefits: WIP was reduced by 65%, finished goods by 45%, obsolescence by 25% adding 27.5% to Cash Flow. Consistent on-time delivery without having excessive Just in Case Inventory liberated the JIC space to bring tool refurbishment in house from sub-contractors for greater reliability and faster set-ups..The local management was relieved most of all because they didn’t ask for money from head-office in Finland to invest in more machines and factory space.
flow beyond Lean
A nominated Nobel Prize Laureate in Economics for Working Capital Management founded our business
Corporate-level expertise is here for SME manufacturers at SME rates
To know more about flow and its origins in Demand Flow Technology (DFT) click on this link to Wikipedia:
Profitable Companies can still go broke with negative Cash-Flow
So, how to make Cash Flow stay positive?
Is it just about having enough cash to pay the bills? Yes!
But if we get short of cash why not just ask Customers to pay sooner and pay Suppliers later?
Might that mean worse performance from Suppliers, worse Customer Service and a deteriorating payments cycle? Yes!
But what about all that cash laying on the floor embedded in “redundant” inventory waiting to be worked on?
Sounds like Lean might be the answer – eliminating waste
Lean has been around for decades, yet there are still those who say, “Lean didn’t really work for us.”
So, “Is there life beyond Lean as we know it?”
Yes, it’s called flow – joining up the Lean dots, linking and synchronising the output from “islands of Lean excellence”
right through to the bottom line.
So, how to flow beyond Lean for
better Cash Flow
more Profitable Growth
Manufacturing processes can become Kaizen’d “islands of excellence” in a sea of redundant inventory. In a 2-minute audio animation see how they can be synchronised in a flow to achieve more Positive Cash-Flow driven by Productivity for Profitable Growth – click on the following, flow beyond Lean:
How To Upgrade Profitable Growth By 15% to 20%
Which Means A Safer More Secure Future
A couple of quick questions.
How much time does it take to actually make a fairly typical product in the factory? Minutes or hours?
How long does it take to actually get an order for that product through the factory? Days or weeks?
Why the disconnect? Why should it take say 3 weeks in a Working Capital Pipeline to make a product with 5 hours of work content?
Mind the gap. This pipeline is filled with Cash embedded in Working Capital that isn’t working! Does it really have to be that way?
What would it mean for your business if product was delivered in hours or days
instead of weeks or months
– liberating cash from Working Capital that isn’t working?
How much more Free Cash Flow would that be?
How important is it to you to achieve that?
Click here to find out how flow relates to other manufacturing concepts and solutions.
Or Click here to find out about how we implemented flow manufacturing for our customers.
Get the pdf sheet explaining Lean vs Flow