Reflections on Module Five - 5a

Why is it important to understand the factors that impact cash flow? How can the factors vary based on the waves of change?

Positive cash flow the lifeblood and the healthy pulse of a company. It is very important to understand what impacts cash flow and how to fully exploit it, how to leverage it many uses in supply chain management, alliances, market channels, and even ICMs. Leaders must understand how to manage positive cash flow and use this advantage to their full advantage. Negative cash flow effects the company in many more perspectives than the obvious ones. Besides the very great potential of going under, the company also will have negative bargaining power and pay higher interest rates, etc - increasing the cost of doing business, thus making the company even less competitive. This list really keeps going.....

The waves of change make these events greater, the multiplier is greater - due to the increase in speed of knowledge and wisdom. Many of the issue with cash flow are due to the factors of business. Supplier want immediate payment and customer want "same as cash" terms for goods purchased. This creates an immediate negative cash flow that must be managed aggressively. As the waves of change progress, the time between collections and receivables start to converge. This brings another "old strategy" that has been overplayed and will stop becoming a piece in a company's ploy to stay alive - losing money, but maintaining positive cash flow - it is possible and is played every day. The waves of change will make this impossible and force companies to be ethically accountable - which globally will be great!