Is your business operating at its peak volume? Can you tell? Building an efficient and profitable operation is just as much a matter of resource planning and management as it is doing good work, and any tutorial on cash flow management will show you why. While mastering your money is a vital step toward sustainability, it’s far from the only one your company needs to take. If you’re trying to be as competitive as possible, you need to make sure you’re putting all your resources into play with the right timing, so you’re not sitting on extra inventory or investing in full-time labor for a part-time boom. That’s where your supply chain analytics become vital to the growth of your business.
Understand Your Consumption
Whether it’s raw materials for manufacturing, packaging supplies, or even labor, understanding the patterns of consumption your company goes through in its business cycle is the biggest positive step you can take toward good resource planning and management. When you use analytics in the form of tracking software that offers up insights, you get a little extra help figuring out when it’s time to start stocking up for a turn in your seasonal demand. You can also see how orders coming into your work queue will require supplies you have on hand and ones you don’t, so you can plan well in advance to have them on hand when you need them.
The reason software tracking these patterns can be so much more powerful than manual tracking and analysis is simple. It’s not just that it’s faster, although that plays a role. It’s that the right resource planning and tracking program can help you optimize your pattern of stocking supplies to keep yourself from running low on cash when you need it. They do this by helping you better understand the optimum order, timing, and quantity of your restocking orders. When coordinated properly with your other outgoing cash patterns, it helps make your flow of money seamless, minimizing the need for credit resources that extend your cash flow.
Of course, just because the right analytics help with timing doesn’t mean you can’t invest in your own growth. Understanding your business patterns and supply needs also means understanding when it’s time to fully leverage your position in the industry, and that’s when you need to tap your credit resources and load up on inventory for a busy season. The better your information, the more accurately you will be able to judge the right timing and investment level when those opportunities arise.