One of the clarity, most of the small, emerging organizations CEO / Business head should have is " How much sales turnover I can make?
From a long term perspective, with existing and new market potential, the answer could be that sales turnover is infinite.
However, realistic clarity is that with given the facility, infrastructure, installed equipment, with existing resources like working capital and people, how much sales turnover I can make?
Why the business head need have clarity?
How does the business head estimate the potential?
Data collection and analysis on the following aspects will help you to arrive at your potential capacity.
1. The capacity of all machines based on cycle time and existing Utilisation & efficiency
2. Understanding the constraint machine and its capacity
3. Exact working capital required for an existing volume
4. Function-wise human resources details and capacity
The data may vary depends on the product mix and cost structure. Hence, the CEO or Business head must periodically ask this question and needs to understand his real capacity and existing status!
From a long term perspective, with existing and new market potential, the answer could be that sales turnover is infinite.
However, realistic clarity is that with given the facility, infrastructure, installed equipment, with existing resources like working capital and people, how much sales turnover I can make?
Why the business head need have clarity?
- The sales turnover potential with given facilities will give the potential to be tapped.
- The clarity will provide the gap in existing performance and potential sale turnover
- Helps to drive the team towards achieving the potential target with conviction
How does the business head estimate the potential?
Data collection and analysis on the following aspects will help you to arrive at your potential capacity.
1. The capacity of all machines based on cycle time and existing Utilisation & efficiency
2. Understanding the constraint machine and its capacity
3. Exact working capital required for an existing volume
4. Function-wise human resources details and capacity
The data may vary depends on the product mix and cost structure. Hence, the CEO or Business head must periodically ask this question and needs to understand his real capacity and existing status!
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