By closing the loop between sales and operations, they can generate more cash and profits.
October 06, 2023
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Managers tend to think about liquidity as a finance issue, but in face the behaviors of the sales and operations team — and how they communicate and work together — can have a direct affect on a company’s cash position. To improve this working relationship, focus on aligning the teams, improving the quality of forecasts, map forecasts to the supply chain, and optimize for profitability rather than predictability. Following these steps can reduce a company’s working capital needs and increase earnings and cash flow.
This is no time to be caught short of cash, or long on inventory, or both: not when interest rates are double what they were a year ago and revolving credit is hard to find. Not when the International Monetary Fund projects that the world’s advanced economies will grow just 1.4% next year. Not when it’s harder than ever to predict and balance supply and demand, which were whipsawed by the pandemic and have not yet regained equilibrium. Not when the number of business bankruptcies, while lower than at the peak of Covid, is up 23% over last year.
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JB
Judy Baranowksi is a partner at AlixPartners. A turnaround and restructuring specialist, she is based in Detroit and received her MBA from the University of Michigan.
BS
Barb Schultze is a director in the consumer products practice of Alix Partners. London-based, she has master’s degrees in both engineering and business administration from Northwestern University.
JS
Jim Snyder, a strategy specialist, is a partner in AlixPartners, who also holds master’s degrees in engineering (Rensselaer Polytech) and business (Duke).
TR
Tony Reynolds is a director in AlixPartners’ revenue and growth practice. He holds an MBA from London Business School.
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