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Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
Financial Risk Management For Manufacturing
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Financial Risk Management For Manufacturing

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Financial Risk is mainly Operation Risk

Financial Risk is mainly Operation Risk

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  • 2008/12/20 VA Financial Risk management for Manufacturing
  • Transcript

    • 1. Financial Risk Management for Manufacturing By Cheung Hon Wan & Dick Lam 20 th December 2008, Hong Kong
    • 2. Financial Crisis
    • 3.  
    • 4.  
    • 5. Gordon Brown, 23 November 2008 I'll give help when you need it CUT VAT by 2.5 per cent to encourage consumer spending. INCREASE the state pension by between £4 and £5 a week. INTRODUCE temporary tax cuts for low-income families, who are more likely to spend and give the economy a boost. CANCEL planned tax rises on cars and small businesses and cuts in tax allowances. INCREASE spending on schools, hospitals and transport projects. The rescue will increase national debt to record levels, with Britain set to borrow up to £120 billion a year by 2011. Taxpayers already spend over £300 a year EACH just on the interest on national debt.
    • 6. Barack Obama , 25 November 2008 &quot;will be about $500 billion&quot; <ul><li>pump money into the battered economy </li></ul><ul><li>create 2.5 million new jobs </li></ul><ul><li>a tax cut to the poor and middle class </li></ul><ul><li>make massive government investments in energy-saving and other technologies designed to pay for themselves in the long run </li></ul>
    • 7. George Bush , 25 November 2008 <ul><li>US$800 billion to be spent </li></ul><ul><li>unfreeze credit on student loans, credit cards and car loans be returned to normal levels </li></ul><ul><li>stabilize the system and support the lending that is vital to our economy </li></ul>
    • 8. <ul><li>金 融 海 嘯 下 的 日 子 … … 美 國 人 賣 血 賣 精 子 過 活 </li></ul><ul><li>經 濟 不 景 , 失 業 人 數 飆 升 , 越 來 越 多 美 國 人 被 迫 出 賣 身 體 求 活 , 包 括 賣 血 ( 每 包 390 港 元 ) 、 賣 精 子 ( 每 次 780 港 元 ) 、 賣 卵 子 ( 每 個 54,600 港 元 ) 和 頭 髮 ( 一 條 馬 尾 值 1,560 港 元 )。 以 賣 卵 子 為 例 , 申 請 賣 卵 者 由 每 天 兩 人 增 至 20 人 。 </li></ul><ul><li>美 國 Msnbc 網 站 </li></ul>蘋果日報 2008-12-07
    • 9. Business takes risks, Need to master the risks
    • 10. Agenda <ul><li>Financial body check-up </li></ul><ul><li>Re-identification of core competence </li></ul><ul><li>Risk management: A/R </li></ul><ul><li>Risk management: Production & Inventory </li></ul><ul><li>Risk management: Cash </li></ul><ul><li>Risk management: People </li></ul><ul><li>In-depth meaning on Risk Management </li></ul>
    • 11. 張漢雲 Cheung Hon Wan <ul><li>管理教練 </li></ul><ul><li>中國註冊採購經理授權培訓師 </li></ul><ul><li>在讀英國工商管理博士 (DBA) 學位 </li></ul><ul><li>英國特許管理會計師公會 (CIMA) 會員 </li></ul><ul><li>香港會計師公會 (HKICPA) 會員 </li></ul><ul><li>香港註冊財務策劃師協會 (HKRFP) 資深會員 </li></ul><ul><li>任職多家跨國企業,豐富管理及財務經驗 </li></ul><ul><li>曾在四大會計師事務所之一出任管理顧問 </li></ul><ul><li>在中國開辦生產及營銷業務,從財務總監到廠長 </li></ul><ul><li>在新加坡出任業務發展總監負責亞洲太平洋區業務 </li></ul><ul><li>曾在香港及上海各大學教授財務及管理學課程 </li></ul><ul><li>在香港報章撰寫經營及管理會計專欄 </li></ul>
    • 12. 林楚祺 Dick Lam <ul><li>香港浸會大學工商管理學士 </li></ul><ul><li>香港城市大學電子商貿碩士 </li></ul><ul><li>在讀香港工商管理博士 (DBA) 學位 </li></ul><ul><li>香港會計師公會 (HKICPA) 會員 </li></ul><ul><li>英國特許會計師公會 (ACCA) 資深會員 </li></ul><ul><li>曾任職不同類型企業, 包 括港資、中資及 美 資公司,長期於國 內 工作 ,善於管理會計、供應 鏈 、財務 策略 、國 內 稅務計劃,有超過 18 年實戰經驗 </li></ul><ul><li>http://360.yahoo.com/lamchorki128 </li></ul><ul><li>[email_address] </li></ul>
    • 13. Agenda <ul><li>Financial body check-up </li></ul><ul><li>Re-identification of core competence </li></ul><ul><li>Risk management: A/R </li></ul><ul><li>Risk management: Production & Inventory </li></ul><ul><li>Risk management: Cash </li></ul><ul><li>Risk management: People </li></ul><ul><li>In-depth meaning on Risk Management </li></ul>
    • 14.  
    • 15. What “finance 財務” means ?
    • 16. Relationship between Financial System and Financial Reports
    • 17. NOW Know the Present, Know what you “really” have
    • 18. Balance Sheet 負債 資產 固定 流動 流動 長期 資本 股本 At a particular time 盈餘 營業額 銷售成本 毛利 銷售費用 管理費用 營業利潤 財務費用 稅前利潤 所得稅 稅後利潤 股息 本年保留利潤
    • 19. Balance Sheet 負債 資產 固定 流動 流動 長期 資本 股本 盈餘 平衡點
    • 20. Balance Sheet 固定 流動 設備 廠房 商譽 銀行結餘 應收帳款 存貨 投資 Assets
    • 21. Balance Sheet 固定 流動 設備 廠房 商譽 銀行結餘 應收帳款 存貨 投資 Assets 自我控制 資產隨時可以 增值或縮水
    • 22. Value of Assets <ul><li>遊戲規則 Rules of Game ? </li></ul><ul><li>市場價格 market price </li></ul><ul><li>公允價值 fair value </li></ul>
    • 23. Balance Sheet 固定 流動 設備 廠房 商譽 銀行結餘 應收帳款 存貨 投資 資產 自我控制
    • 24. Operation, Investment & Arbitration <ul><li>營運,投資與投機 </li></ul><ul><li>我的控制能力有多少? </li></ul><ul><li>How much do I control? </li></ul><ul><li>佔我的資金比例有多少? </li></ul><ul><li>What portion of my funding has been put in? </li></ul>
    • 25. Controllable Cash Value <ul><li>應收賬款 A/R </li></ul><ul><li>庫存 Inventory </li></ul><ul><ul><li>成品 F/G </li></ul></ul><ul><ul><li>半成品 WIP </li></ul></ul><ul><ul><li>原材料 R/M </li></ul></ul><ul><li>投資物 Investment </li></ul>可操控的現金值 以審慎﹝悲觀﹞ prudence 的態度 去衡量現有的資產值 歷史價值 historical value 變現價值 net realizable value 使用價值 usable value
    • 26. PAST
    • 27. Profit & Loss A/C For a period of times 營業額 銷售成本 毛利 銷售費用 管理費用 營業利潤 財務費用 稅前利潤 所得稅 稅後利潤 股息 本年保留利潤
    • 28. Profit & Loss A/C 公司整體表現 Overall company performance 營業額 銷售成本 毛利 銷售費用
    • 29. 產品分析 Product analysis <ul><li>By each product type, changes in </li></ul><ul><ul><li>Quantity </li></ul></ul><ul><ul><li>unit price </li></ul></ul><ul><ul><li>cost elements </li></ul></ul>審核核心競爭力 core competence 發現浪費 wastage
    • 30. What big enterprises do <ul><li>控制非增值性的費用﹝差旅費﹞ cut expenses </li></ul><ul><li>凍薪 freeze salary </li></ul><ul><li>裁員 redundancy </li></ul><ul><li>拆賣 disposal </li></ul>
    • 31. Understand costing structure <ul><li>生產成本 vs. 費用 </li></ul><ul><li>Production cost vs. expenses </li></ul><ul><li>變動成本 vs. 固定成本 </li></ul><ul><li>Variable cost vs. fixed costs </li></ul><ul><li>產品盈虧平衡點 </li></ul><ul><li>Break-even point </li></ul>
    • 32. The third report 現金流量表 Cash Flow Statement 现金 CASH 利润 PROFIT =====
    • 33. The Future Cash Flow Statement 現金流量表 晚點再討論 賒銷 信貸 credit 估算 Forecast
    • 34. 靠自己 Self-caring <ul><li>A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain. </li></ul><ul><li>Robert Frost (1874 -1963), US poet </li></ul>
    • 35. People we face 供應商 supplier 員工 staff 客戶 Customer
    • 36. 弗洛依德 (Sigmund Freud 1856-1939) 〔奧地利精神病學家〕 本我 超我 自我 意識 潛意識 前意識
    • 37. Decision & Behavior Model 他人經歷 Others experience 本身經歷 Self experience 自身體驗 Self feeling 預估結果 Expected result 實際結果 Actual result 行為 behavior What made me earn money in the past?
    • 38. Risk Nature How much risk are you willing to take?
    • 39. Alert!! <ul><li>Key Performance Indicators </li></ul><ul><ul><li>The higher the index, the better the performance </li></ul></ul><ul><li>Key Risk Indicators </li></ul><ul><ul><li>The lower the index, the more secured the business </li></ul></ul>
    • 40. Pause for Discussion
    • 41. Agenda <ul><li>Financial body check-up </li></ul><ul><li>Re-identification of core competence </li></ul><ul><li>Risk management: A/R </li></ul><ul><li>Risk management: Production & Inventory </li></ul><ul><li>Risk management: Cash </li></ul><ul><li>Risk management: People </li></ul><ul><li>In-depth meaning on Risk Management </li></ul>
    • 42. Accounts Receivable <ul><li>Examine the current situation </li></ul><ul><li>Spot out the customers </li></ul><ul><li>Review the collection strategy and credit hold policy </li></ul><ul><li>Re-connect with your customers (how much you know them?) </li></ul><ul><li>Create forward-looking credit control policy </li></ul><ul><li>Any way to generate more cash from A/R? </li></ul>
    • 43. Examine the health of A/R <ul><li>A/R Aging Report and its history </li></ul>
    • 44. <ul><li>What is the total overdue debt? </li></ul><ul><li>What is the longest credit terms accepted by the company? </li></ul><ul><li>Any credit terms > the standard term? </li></ul><ul><li>For customers with overdue debts, do we still release delivery? If yes, why? </li></ul><ul><li>How frequent do you read the aging report? </li></ul><ul><ul><li>Monthly? Weekly? Daily? Or Never? </li></ul></ul>
    • 45. <ul><li>Cash Projection </li></ul>
    • 46. <ul><li>Performance review of Collection </li></ul><ul><li>Any follow-up actions? </li></ul>
    • 47. <ul><li>Forward-looking </li></ul><ul><ul><li>Credit Limit Alert Report (Weekly) </li></ul></ul><ul><ul><ul><li>Current Balance + Average Invoice Amount vs. Credit Limit </li></ul></ul></ul><ul><ul><ul><li>Report generated if it exceeds the credit limit, alert the customer & salesmen of this would-be credit hold situation </li></ul></ul></ul><ul><ul><li>Know more about your customers </li></ul></ul><ul><ul><ul><li>From your salesman & staff </li></ul></ul></ul><ul><ul><ul><li>From your suppliers </li></ul></ul></ul><ul><ul><ul><li>From your competitors </li></ul></ul></ul><ul><ul><ul><li>From your environment </li></ul></ul></ul>
    • 48. <ul><li>Local purchased materials for local sales </li></ul><ul><li>Imported materials for export sales </li></ul><ul><li>Consignment </li></ul><ul><ul><li>Title of ownership </li></ul></ul><ul><li>Bank Draft </li></ul><ul><li>Fixed cost vs. variable cost with spare capacity </li></ul>
    • 49. Key Risk Indicators (KRI) <ul><li>% of overdue debt / Total A/R </li></ul><ul><li>Top 10 delinquent A/R and amount </li></ul><ul><li>Late Payment customers and amount </li></ul><ul><li>… . </li></ul>
    • 50. When is AR created? <ul><li>Sales on credit </li></ul><ul><ul><li>Pass on ownership ( 擁有權 ) of the products </li></ul></ul><ul><ul><li>Pass the ownership risk </li></ul></ul><ul><li>Consignment goods </li></ul><ul><ul><li>Pass on custody ( 保管權 ) of the products </li></ul></ul><ul><ul><li>Do not pass the ownership risk </li></ul></ul>
    • 51. Agenda <ul><li>Financial body check-up </li></ul><ul><li>Re-identification of core competence </li></ul><ul><li>Risk management: A/R </li></ul><ul><li>Risk management: Production & Inventory </li></ul><ul><li>Risk management: Cash </li></ul><ul><li>Risk management: People </li></ul><ul><li>In-depth meaning on Risk Management </li></ul>
    • 52. Inventory Holding <ul><li>Inventory Aging Report </li></ul>
    • 53.  
    • 54. <ul><li>Clearly identify what inventory can and cannot be used </li></ul><ul><li>Why are there so many unusable inventory? </li></ul><ul><ul><li>Re-visit the planning process… </li></ul></ul><ul><ul><li>Any reward for minimize inventory level without affecting order fulfillment </li></ul></ul><ul><li>Keep it or dispose it? Or sell back to the suppliers </li></ul><ul><li>Deferred customization </li></ul>
    • 55. Target Inventory <ul><li>What is your target inventory level? </li></ul><ul><li>How do you measure it? </li></ul>
    • 56.  
    • 57. Tools for reduction <ul><li>7 Waste </li></ul><ul><ul><li>Rework </li></ul></ul><ul><ul><li>Excessive Production </li></ul></ul><ul><ul><li>Conveyance </li></ul></ul><ul><ul><li>Excessive Motion </li></ul></ul><ul><ul><li>Waiting </li></ul></ul><ul><ul><li>Inventory in production area (pull system) </li></ul></ul><ul><ul><li>Inappropriate processing </li></ul></ul><ul><li>Reward people for cost saving idea & action </li></ul>
    • 58. <ul><li>Suppliers </li></ul><ul><ul><li>VMI </li></ul></ul><ul><ul><li>Consignment Inventory </li></ul></ul><ul><ul><li>Equalize MOQ to SPQ </li></ul></ul><ul><ul><li>Order cancellation agreement </li></ul></ul><ul><ul><li>Design-in to exploit opportunities </li></ul></ul><ul><ul><li>Be transparent to the suppliers </li></ul></ul><ul><ul><ul><li>Come to visit my factories </li></ul></ul></ul><ul><ul><li>Go to visit your suppliers </li></ul></ul><ul><ul><li>Exploit new suppliers </li></ul></ul>
    • 59. New Project Evaluation …..
    • 60. <ul><li>Capacity </li></ul><ul><ul><li>Indirect labor vs. Direct labor </li></ul></ul><ul><ul><li>Salaried labor vs. Direct & Indirect Labor </li></ul></ul><ul><li>What to save? </li></ul><ul><ul><li>Let the employees to tell you </li></ul></ul><ul><ul><li>But don’t forget to motivate them </li></ul></ul>
    • 61. KRI <ul><li>Inventory Days </li></ul><ul><li>Obsolete Inventory vs. Inventory Values </li></ul><ul><li>Inventory with days > target </li></ul><ul><li>… .. </li></ul>
    • 62. When to produce for customers? <ul><li>Raw Material is converted to Finished Goods </li></ul><ul><li>Conversion cost is labor plus production capacity </li></ul><ul><li>Buying capacity reserve ( 预订供应商的生产能力 ) </li></ul>
    • 63. Working with Customers <ul><li>The competition </li></ul><ul><li>Better design </li></ul><ul><li>Higher quality </li></ul><ul><li>Faster to market </li></ul><ul><li>Value engineering in the supply chain </li></ul><ul><li>Share the supplier expertise and obtain long-term relationship </li></ul>
    • 64. Pause for Discussion
    • 65. Agenda <ul><li>Financial body check-up </li></ul><ul><li>Re-identification of core competence </li></ul><ul><li>Risk management: A/R </li></ul><ul><li>Risk management: Production & Inventory </li></ul><ul><li>Risk management: Cash </li></ul><ul><li>Risk management: People </li></ul><ul><li>In-depth meaning on Risk Management </li></ul>
    • 66. Cash Cycle
    • 67. Cashflow template Sweet lemon; Sour grape!?
    • 68. Weekly cashflow forecast
    • 69. Weekly Projection <ul><li>Cash collection projection </li></ul><ul><li>Cash payment projection </li></ul><ul><ul><li>A/P </li></ul></ul><ul><ul><ul><li>How much to pay and how much be delayed? </li></ul></ul></ul><ul><ul><ul><li>Not a good strategy of always paying your supplier late </li></ul></ul></ul><ul><ul><li>Expenses </li></ul></ul><ul><ul><ul><li>On time payroll release is a must!! </li></ul></ul></ul><ul><ul><li>Capex </li></ul></ul>
    • 70. Pause for Discussion
    • 71. Agenda <ul><li>Financial body check-up </li></ul><ul><li>Re-identification of core competence </li></ul><ul><li>Risk management: A/R </li></ul><ul><li>Risk management: Production & Inventory </li></ul><ul><li>Risk management: Cash </li></ul><ul><li>Risk management: People </li></ul><ul><li>In-depth meaning on Risk Management </li></ul>
    • 72. People <ul><li>This is you and me that usually expose the company to risky situation </li></ul><ul><li>Why & How? </li></ul>
    • 73. Control Make your people happy so that they can make your customer happier
    • 74. <ul><li>Am I the only one that knows the company and its business? </li></ul><ul><li>Do I welcome opposite comment? </li></ul><ul><li>Do I continuously ask for negative opinion? </li></ul><ul><li>Do I reward people for preventing me from doing bad deal which I originally thought it was good? </li></ul><ul><li>How do I describe “Luck”? </li></ul>
    • 75. <ul><li>There is no repeated fluke </li></ul><ul><li>Goodness & badness co-exist (yin & yang) </li></ul><ul><li>The value of devil advocate (loyal opposition) </li></ul><ul><li>The underlying principles of running the existing business </li></ul><ul><li>The line between acceptable & unacceptable behavior </li></ul>曲突徙薪亡恩澤,燋頭爛額為上客
    • 76. <ul><li>Belief Systems </li></ul><ul><ul><li>Systems to articulate the values and direction that senior managers want their employees to embrace </li></ul></ul><ul><ul><li>Draw employees’ attention to key tenets of to business: </li></ul></ul><ul><ul><ul><li>how the organization creates value </li></ul></ul></ul><ul><ul><ul><li>The level of performance the organization strives for </li></ul></ul></ul><ul><ul><ul><li>And how individuals are expected to manage both internal & external relationships </li></ul></ul></ul>What is your organization risk appetite?
    • 77. <ul><li>Boundary Systems </li></ul><ul><ul><li>Management principle: power of negative thinking, minimum standards </li></ul></ul><ul><ul><li>Tell people what not to do only and let them figure out what to do </li></ul></ul><ul><ul><li>Of particular value when employees under pressures to achieve superior results being collided with stricter codes of behavior </li></ul></ul>Profit prioritize or Growth prioritize?
    • 78. Who knows your business? <ul><li>Yourself </li></ul><ul><li>Your employees </li></ul><ul><li>Your suppliers </li></ul><ul><li>Your customers </li></ul><ul><li>Your bankers </li></ul><ul><li>Your competitors </li></ul><ul><li>But not your investment consultants </li></ul>上下同欲者勝
    • 79. 5 R – Cost saving strategy <ul><li>Remove </li></ul><ul><ul><li>Why does a particular expense need to incur? Is there a way to totally remove this expense? </li></ul></ul><ul><li>Replace </li></ul><ul><ul><li>If not possible to remove this expense, can we replace the function with a cheaper one? </li></ul></ul>One to say Yes, Two to say No.
    • 80. <ul><li>Reduce </li></ul><ul><ul><li>If not possible to remove it, is there a way to reduce the spending? </li></ul></ul><ul><ul><li>We should think about request for price reduction from supplier or source alternative supplier. </li></ul></ul>There is no repeated fluke!
    • 81. <ul><li>Redesign </li></ul><ul><ul><li>If not possible to reduce, can we re-design the process to utilize the scarce resources? </li></ul></ul><ul><ul><li>Kaizen should be a continuous process. </li></ul></ul><ul><ul><li>There should be a regular review of existing process by freshman. </li></ul></ul><ul><ul><li>The old process creator should only act as a information provider but not member of new Kaizen group. </li></ul></ul>沒有最好 只有更好
    • 82. <ul><li>Redistribute </li></ul><ul><ul><li>If not possible to redesign the process, can we have the function to share its value to different functional area as well as the cost? </li></ul></ul><ul><ul><li>Maximization subject to constraint is maxim not only in economics but also in cost saving perspective. </li></ul></ul>Great intelligence comes from heart, not mind
    • 83. How to pay your staff <ul><li>Buy their time or their talent </li></ul><ul><li>Treat them as staff or “working partner” </li></ul><ul><li>Pay by fixed or portion in variable </li></ul><ul><li>YOUR STAFF ARE THE ONES DOING THE BUSINESS & GENERATING THE INCOMES </li></ul>
    • 84. Pause for Discussion
    • 85. Agenda <ul><li>Financial body check-up </li></ul><ul><li>Re-identification of core competence </li></ul><ul><li>Risk management: A/R </li></ul><ul><li>Risk management: Production & Inventory </li></ul><ul><li>Risk management: People </li></ul><ul><li>Risk management: cash </li></ul><ul><li>In-depth meaning on Risk Management </li></ul>
    • 86. No wastage <ul><li>Utilize resources </li></ul><ul><li>especially those unrecorded </li></ul>
    • 87. Devil Advocate <ul><li>Who are they? </li></ul><ul><li>Where are they? </li></ul><ul><li>When do we need them? </li></ul><ul><li>Financial risk management is not the sole responsibility of Finance Department, rather, every operation departments </li></ul>
    • 88. Maxim <ul><li>I only earn money by manufacturing </li></ul><ul><ul><li>Better quality </li></ul></ul><ul><ul><li>Lower price </li></ul></ul><ul><ul><li>Higher productivity </li></ul></ul><ul><ul><li>Higher return on lower equity capital </li></ul></ul><ul><ul><li>And nothing more…. </li></ul></ul>
    • 89. Do not only use memory <ul><li>The financial accounts remind you and give you an objective view </li></ul><ul><li>Ask your Finance staff to explain </li></ul><ul><li>Demand your Finance team to provide management accounting information </li></ul>
    • 90. Be focus <ul><li>Core competence </li></ul><ul><li>What is your strength? </li></ul><ul><ul><li>You can think more but you can only do little </li></ul></ul><ul><li>Legal entity concept </li></ul>
    • 91. Avoid Over-Trade <ul><li>Wear the right hat </li></ul><ul><li>Continuous checking the size of your head and the size of your hat </li></ul><ul><li>the measuring tools are </li></ul><ul><ul><li>management accounting reports </li></ul></ul><ul><ul><li>numeric analysis from your finance staff </li></ul></ul><ul><ul><li>Regular meetings with management team </li></ul></ul>
    • 92. Business takes risks, But measurement risks

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