Flux Analysis » Operational Changes

The Purpose Of Operational Changes

The purpose of making operational changes is, of course, to improve the profitability of your company. Take the opportunities you have identified for improving profits through your Flux Analysis and in conversations with sales and operational management. Start capitalizing on them. Bear in mind that you alone will not be able to make these changes. As a strategic CFO, educate the sales/production managers why these changes are important and how they impact the bottom line. It is also important that you get sales and operations to buy in to this process. Connect pricing and operational strategies to the financial performance of the company.

Changes in pricing, sales mix, procurement and productivity are ultimately the responsibility of the sales and production managers. But it is important that you, as a strategic CFO, communicate clearly to the managers/ownership how these changes will impact profitability.

Operational changes include:

• Cutting down on work force
• Hiring more labor
• Increasing or decreasing purchases
• Increasing productivity
• Changing pricing, sales, and product mix
• Adjusting product lines
• Buying new production equipment
• Adding another product line