Giving a business goal is not easy, is a sum of factors particular area with elements of business, but making mistakes is very easy, just do not think in an organic way without giving due weight to the numbers, adding lack of objectivity and competence.
The objectivity of the data, the numbers are often distorted in favor of subjective elements not tangible, and today in the corporate world it happens that the number you prefer more: the search for the white knights that do not exist or bragging to be such
Let’s take an example, many were tempted, in this difficult period, to push on the lever costs to maintain or improve margins, this theory, in my opinion, so efficient, is based on heavy action on the passive cycle (purchasing and cost reduction structure) and allows to increase the margin with timelines and it is cheaper than a campaign of sales expansion.
Well, a key condition is to keep the situation unchanged by sales side.
I mean, if I make a crash action on procurement costs by reducing the purchase price by 3% with an impact on the budget of 2%, I can not increase or worse, use wildly, leverage discounts on the sales!
In detail, if at the Supply Chain is rightly assigned a target efficiency purchases (ie, how much savings, given a budget of reference), the commercial side often tend to give the turnover sold.
And here the castle collapses !!!
Skip to the eye the incompatibility of the two objectives unless it is added to a common parameter strict (Margin, EBIT, indexes rotation).
Think of Logistics and Purchasing, over the edge if you do not put a common target for the store, in terms of turnover and colleagues all at the service level of production, you’ll always have the risk of huge lots purchased at affordable prices apparently, in warehouses with the wrong mix compounds to maintain low value, and delivery delays due to lack of product.
Wrong targets is equal to the wrong employees, led the company away from its target and undermines the foundations because of one simple reason, objectivity pass data to the subjectivity of the evaluations of the facade but not the content.
We’ll talk again …