Page 169 - Finance for Non-Financial Managers

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Finance for Non-Financial Managers
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Knowing that Wonder Widget’s stated purpose was to become
the dominant provider of garden equipment in the western
United States helps to put in perspective the specific goals that
the company wants to achieve during the upcoming year and
enables every manager to buy in anew to that strategy as they
begin work on the current year’s goals. Whether a company
decides to recite the entire vision, mission, and strategy at the
beginning of the document or simply give a summary, as sug-
gested here, is less important than the effort to reinforce the
grand purpose in whatever way will succeed in gaining renewed
enthusiasm for the long-term plan.
The overview should also contain the key goals the company
has set for the year and the key challenges and opportunities
that it will face, to keep everyone focused on the direction of the
company and to keep them from getting too wrapped up in their
own department agenda at the expense of the team objectives.
The Production Plan—Getting the Product Ready to Sell
Whether the company makes or buys its products or provides a
service, there are activities that must be initiated and satisfacto-
rily completed in order to have something to sell. Goals might
include reaching monthly production levels that will support
sale forecasts, improving machine output or maintenance
downtime or setup times, or moving to just-in-time ordering to
lower average inventory levels. The plan should lay these goals
out, along with the timetables, staffing, and financial resources
needed to achieve them.
The plan should also cover the production challenges that
must be overcome in order to reach the goals and the path the
organization plans to take to overcome those challenges. These
might include heavy recent turnover of several skilled supervi-
sors, the age or condition of the machines in the plan, pricing
pressures from suppliers who aren’t willing to provide just-in-
time shipping without some price adjustments, and so on. If the
plan doesn’t bring these out and deal with them effectively, it
will quickly become a paper tiger as employees find their paths
blocked by obstacles they can’t control.