Daily Archives: June 21, 2009

Industry Week’s Mega Checklist for Improving Cash Flow in Your Supply Chain

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Industry Week recently an article on how to optimize your supply chain to improve cash flow that was pretty much a 21-point mega cash-flow optimization checklist for manufacturers that need to improve their cash-flow, which starts with EBITDA (earnings before interest, taxes, depreciation, and amortization) optimization. The suggestions offered were:

  • Business Process Optimization

    Reduce direct variable process costs with better information flows that are designed to decrease order management costs.

  • Direct Effort Optimization

    Decrease direct variable costs by increasing the value-added-to-nonvalue-added ratio through network and production optimization.

  • Efficient Utilization of Tools

    Lessen direct variable costs by ensuring the right number of tools are available, adequately utilized, cared for, and properly stored.

  • ERP & PLM

    Diminish divisional ERP/PDM/PLM software fixed costs by rationalized all of the various ERP, PDM, and PLM instances in use.

  • Indirect SG&A Optimization

    Constrict variable headcount costs through processes and procedures as well as organizational and software solutions.

  • Logistics Optimization

    Shrink direct variable costs with better packing and storing that reduces waste and overhead.

  • Machine Optimization

    Compress direct and indirect variable costs by optimizing machine utilization and maintenance schedules.

  • Network Optimization

    Ebb fixed costs by reducing the number of redundant facilities.

  • Obsolescence Cost Mitigation

    Wane direct variable costs through better forecasts and inventory management.

  • Lean your Plant Layout

    Subside fixed costs by reducing the space needed for the same output.

  • Product Management Optimization

    Abate indirect variable costs by improving product-use instructions.

  • Production Optimization

    Contract direct variable costs through cycle time reduction.

  • Quality Control Assessment of Production

    Curb indirect variable costs by minimizing failure rates.

  • Research and Development Optimization

    Curtail indirect variable costs by reducing the need for engineering support staff.

  • Risk Management

    Lighten indirect variable legal costs by assessing potential business risks.

  • Safety Audits, Training, & Insurance Spend Management

    Lower indirect variable costs by auditing the production area and minimizing safety issues.

  • Spend Management

    Restrain direct variable costs by evaluating existing assets to realize consumption cost savings.

  • Supplier Audit

    Check indirect variable costs by ensuring material and information flows with the supplier are optimized to minimize failure and rejection rates.

  • Supply Chain Management

    Slash direct variable costs by developing optimal just in time structures with demand planning.

  • Supply Chain Management Optimization

    Minimize direct and indirect variable costs by focussing on financial, material, and information flows in planning/scheduling, logistics, and procurement.

  • Transportation Management

    Narrow direct variable costs by optimizing shipment lot sizes, consolidating shipments, and improving freight terms.