Business Quintiq Ortems
Having a supply chain or operations view of the performance, we are usually well aware that better supporting the planning processes of the company by the systems can bring significant improvements. What could this mean in terms of financial performance from a bird’s eye view?
Financial overall operations costs are usually broken down into four key figures, and the measurement of the financial performance of the company usually starts by relating them to the sales performance of the company, and by benchmarking them against the company’s peers or market segment averages:
- Cost Of Goods Sold in reference to the direct costs of producing the goods sold by the company including the materials and direct labor costs.
- Selling, General and Administrative in reference to direct and indirect selling expenses and all general and administrative cost supporting the production.
- Working Capital in reference to the difference between short-term assets (cash, accounts receivable, inventories) and the current liabilities (accounts payable).
- Plant, Properties & Equipments in reference to long-term tangible physical assets vital to business operations and not easily converted into cash.
Planning Optimizations have a broad contribution to improve all these costs with some higher contributions focus depending of the planning level focus:
- Sales & Operations Planning will enable to take decisions in relation to the configuration of the company’s value network, and optimizing the PP&E.
- Sales & Operations Execution will enable to drive operations just in time by optimizing lead times, streamlining inventories, and optimizing the working capital.
- Detailed scheduling will enable to synchronize the shop floor activities and task sequences, maximizing the operation’s efficiency and optimizing the COGS.
Now you have caught the interest of your CFO :-)
Take care and stay safe!
