Profit & Cashflow - A perspective of Supply Chains critical contribution to the enterprise
When I inquire with professionals in the industry of what do they think is the objective of an enterprise. I always hear - It's Profits . Can't agree more than that as it is pretty much commonsense that Profits is an important goal to achieve. I always believe that a company can have Profits but still go bankrupt. The thin line of difference is a Supply Chain effect on company. The heart of running an enterprise is - Cash flow . An enterprise needs money to pay for its Current Liabilities which naturally it desires to pay from its Current Assets. Supply Chain activities are a great contributor to both the side of the balance sheet hence on the cash flow of an enterprise. e.g. Inventory as a Current Asset looks fine as long as its liquidated in time to generate funds before the cash outflow of the Vendor payment is due. No Asset ever got created without an corresponding Liability, isn't it? So Inventory being an asset is to be funded with Vendor offering credit. This balan...