How to Engage your Finance Department in your Operations: Metrics, Continuing Analysis, Looking Forw - PowerPoint PPT Presentation

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How to Engage your Finance Department in your Operations: Metrics, Continuing Analysis, Looking Forw

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What barriers prevent Finance from being a leader? In order to become a leader, Finance needs: ... Vendor reject rates. Shipping costs. Yield rates. Customer returns ... – PowerPoint PPT presentation

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Title: How to Engage your Finance Department in your Operations: Metrics, Continuing Analysis, Looking Forw


1
How to Engage your Finance Department in your
OperationsMetrics, Continuing Analysis, Looking
ForwardNAMP 2009 Meat Industry Management
Conference
Dan Wang Loretta ReedChicago Meat
Authority, Inc. RSM McGladrey Chief Financial
Officer Director 773.254.3811 312.462.6504
2
Engaging Finance
  • Finance involvement
  • Developing measures
  • Frequency of measures

3
Engaging Finance
  • Does Finance lead or follow in your organization?
  • What barriers prevent Finance from being a
    leader?

4
In order to become a leader, Finance needs
  • Credibility
  • Understand key components of the business
  • Demonstrate knowledge of the business
  • Be more than just the area that does the books
  • May require training and time on the floor
  • Persistence
  • Keep presenting ideas
  • Determine who needs to know what and get it for
    them

5
There are metrics for which it is vitally
important that Finance and Operations be involved.
  • Yield
  • Productivity
  • Per pound cost
  • Raw material received weight and consistency
  • Labor paid and reported
  • Standard costing and variances
  • Sales pricing
  • Others?

6
There are key reasons for engaging Finance in
your operations
  • Much of the information resides within Finance or
    flows through Finance
  • Central place to combine data from across
    functions so metrics are calculated in a standard
    manner process and reporting consistency
  • Staff trained to understand, translate and
    analyze data
  • Staff generally have the tools and accessibility
    needed

7
Deciding on where Finance should be involved in
Operations is a collaborative effort.
  • Determine what information is key to the
    organization
  • Look to the business strategy and business
    objectives to decide what is needed to determine
    if the company is on track.
  • Decide on the measures that will provide the key
    information historical, real-time,
    forward-looking
  • Identify data required to consistently produce
    measures
  • Decide if industry benchmarking is required
    NAMP members have access to Business Connections
    portal
  • Produce, review and discuss measures on a regular
    basis leading to actionable items

8
There are several factors that determine if
metrics will be successful
  • Education
  • Staff understand the metrics how they are
    developed, what they mean and why they are
    important to the business
  • Discussion
  • Metrics need to be published and discussed. If
    they are not discussed, they are soon ignored and
    of little value.
  • Controllable
  • Metrics are most meaningful to a company when the
    business is able to control the activities
    underlying the metrics so that change can be made
    as required.

9
The frequency of the measures impacts their value
to the business
  • Tactical, operational metrics need to be reported
    in a timely manner, preferably daily or weekly,
    so that corrective action can be taken.
  • Rejected material receipt, processing,
    customer, external entity such as inspector
  • Yield
  • Productivity

10
The frequency of the measures impacts their value
to the business
  • Analysis of measures focuses on the trends within
    the metrics and requires some historical data in
    order to be valid. Since the trend, and not the
    individual data points within the analysis
    provides the value, analysis is generally
    performed on a monthly basis.
  • Vendor reject rates
  • Shipping costs
  • Yield rates
  • Customer returns

11
The frequency of the measures impacts their value
to the business
  • Looking forward for the business includes the
    expected value of the pipeline, operations
    planning data in conjunction with sales forecast,
    the capital expenditures budget, space
    considerations, and pricing/cost analysis. Given
    the strategic nature of this information, this
    exercise is done at most monthly and often
    quarterly.

12
  • Questions?
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