From the shop floor to the CEO there is information vital to the smooth and efficient business flow. Everything may carry on ok without it, however, if the Right First Time %age is known on a daily basis rather than weekly significant time and money could be saved. It can cost in excess of three times more to do something a second time in labour and materials; while the rework is happening new actions aren’t taking place.
Identifying Critical Success Factors
CSFs will be different for every company and will comprise hard and soft issues. Knowledge of some items will be critical to all businesses e.g. sales, cash, aged receivables (debtors), payables (creditors), staff morale. There are likely to be 7 or 8 key factors that every company should be measuring on a daily / weekly basis, such as - orders, Right First Time, staff turnover, repeat customers, levels and quality of stock and work in progress.
Performance measurement should be based on continual improvement, not simply imposing targets. Continual improvement requires good knowledge of what is happening here and now. Once it has been decided what should be measured, simple systems can be created so that data "falls out / appears on the dashboard" with minimum effort. It may simply require the tweaking an existing piece of software to produce the required report or the addition of an extra column to a record sheet.
Improvement of financial control
Financial control is fundamental to the profitable growth of any successful company. For small to medium sized companies cash is king. Turnover is vanity, profit sanity and cash reality. Profit projections need to be made incorporating turnover and costs on a monthly basis then converted to cash projections to ensure working capital requirements are covered; how long it takes customers to pay, how quickly work in progress is converted to finished stock, how quickly inventory is turned over. These projections must be referred to on a regular basis and measured against actual performance so that action can be taken at an early stage to get back on track and introduce improvements.
Reporting and control systems
The last thing businesses need are shocks. Risk analysis is fundamental to determining what might disrupt any area of the business and the chances of that happening; strategic, product, operational, financial, political, technology, economic and environmental risks. Measurements can be set up to make management aware of any changes in these sensitivities to enable swift performance improving actions and the removal of stumbling blocks to business performance.
Businesses of all sizes can benefit from excellent reporting and control systems.
Intellectual property verification
As the owner of the IP are you receiving the royalties you are entitled to and are the expenses being deducted those that have been authorised. A good contract is fundamental to maximising revenues and minimising potential lengthy and costly disputes with clear definitions and arrangements for audits at regular intervals. Reliable data must be accessible with minimal disruption.