From the numbers to the change
- Your numbers sayUtilisation high, margin low, bank limit full
- The cause underneathScrap and idle time hidden in averages, raw material costs not passed on, finished stock and slow debtors
- What changesCosting by product, shop-floor data, price-variation clauses, a stock and credit clean-up
- What to expectMargin steadies, cash cycle shortens, the plant pays for itself again
An illustration of how the thinking runs, not a client result.
The numbers that matter most here
Track these monthly. Shop-floor data is often the missing piece.
| Number | Why it matters in this business |
|---|---|
| Contribution per machine hour, by product | Shows which products deserve the capacity |
| Scrap and rework as % of production cost | A few points of scrap can equal the whole profit |
| Idle and changeover time | Hidden capacity and cost |
| Raw material price variance | Input cost moves faster than price lists |
| Cash conversion cycle | Raw material + WIP + finished goods + debtors - creditors |
What trouble usually looks like
| The numbers show | The cause is often |
|---|---|
| Utilisation high, margin low | Wrong product mix, or price lists that ignore cost changes |
| Stock days rising, sales flat | Over-buying raw material, build-ahead for orders that did not come |
| Overtime high every month | Planning bottlenecks, not demand peaks |
| Debtors rising with a few OEMs | Customer concentration and weak terms |
How we would sequence a turnaround
Cost by product properly,
with machine time, scrap and set-up.
Fix pricing
with a price-variation clause and a review date.
Capture shop-floor data
for output, idle time and wastage, as our client Hiflo did.
Clear stock and tighten credit
to release working capital.
Re-plan capacity
toward the products with the best contribution.
Business under pressure? Let a CFO read your numbers.
A senior CFO reads them with you and tells you what is really going on. No cost, no obligation.
What is specific to manufacturers
Manufacturers carry the full cycle: material, work in progress, finished goods and customer credit. A 10-day improvement in each is worth far more than the same effort on overheads. Product costing is usually the missing tool: what each product really contributes.
Related reading
On the main CFOSurge India site: Engineering and manufacturing CFO services · Too much stock · CC limit always full.
CFOAvatar complements every turnaround
A human CFO sees your business at the review. Problems do not wait for the meeting. CFOAvatar is connected to your accounting data and checks your numbers every day, so the scoreboard in a turnaround is always current. Ask it what an owner in trouble would ask:
What owners say after the numbers started talking
In production, clear performance measures were introduced. A proper system was set up to collect data from the shop floor, making it easier to track output, idle time, and wastage. This has helped us control costs and improve efficiency.
Their insights led us to monitor margins on a detailed customer-wise and product-wise basis, providing clarity we never had before. Their proactive approach has been instrumental in identifying areas for cost control.
Their regular monitoring of production expenses, including contract labor and overtime, has given us a granular view of our operations, paving the way for efficiency and cost savings.
Quoted word for word from our clients. Read more client words →
Questions owners ask us
Why does my factory lose money when it is full?
Because volume does not equal profit. Scrap, idle time, a poor product mix or unrecovered input costs can make each unit lose money.
What data do you need from a plant?
Production by product, machine hours, scrap and rework, raw material purchases and prices, and stock ageing.
Do you visit the plant?
Yes, plant walk-throughs are part of the work where needed. We read the numbers first so the visit is focused.