Operation Excellence Impact to Cash Flow

• Cash flow is more important then operation margin for long-term survival of organization
• The major cash flow funding for a business is working capital
• Shareholders investment or long-term bank borrowing is used to pay expenses and payables for inventory
• Then sales and collection on receivables is an important cycle to a working capital self-funding
• As a CFO’s, we need to make sure receivables are in our control. Dashboard and turns are important measurements that CFO’s needs to look at and delivery monthly
• Through operational excellence in six sigma, lean, TAT, productivity saving organization can free up working capital
• This chart is example in a supply chain business, reduce waste and focus on value process enhanced customer value and reduce cash flow requirement