About this Presentation
This presentation describes a method for constraint identification (questions to be asked about the market, production facility, and the suppliers), defines cash constraint, describes issues with cash constraints, discusses how to manage a cash constraint and provides a case study illustrating the concepts. A cash constraint exists only if there are sufficient orders, excess manufacturing capacity on all equipment, and suppliers are refusing to supply unless paid up-front. Definitions, measures and supporting throughput calculations are provided for the cash-to-cash cycle, throughput, survival time, etc. Issues related to having a cash constraint, common mistakes, measurements, etc. are described and a simple example illustrates supporting concepts and measures.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
Cash constraints can severely limit a business's ability to meet immediate expenses and can lead to bankruptcy if not managed effectively.
Reducing the cash-to-cash cycle time, particularly by reducing customer credit period, can significantly improve a company's cash situation.
Even borrowing at high interest rates can be beneficial if it helps to alleviate cash constraints.
Instructor(s)
