Thus, placing the business emphasis on meeting the customers expectations is imperative.
Finally, when finance is the bottleneck, nothing at all can run smoothly. Finance is the engine that powers all of the other business functions. You could have the most high performance business model imaginable but without enough assets to fund the model all is lost. For example, if the supply chain and marketing operations are strong but finance isnt providing the budgets necessary for these functions to run at optimal levels then this acts like a handicap for the whole of the business. It is incredibly important for the finance department to accurately match the funding to the meet the requirements of all the various functions. Furthermore, since this cannot always be accurately predicted, it is best for finance to have fast acting mechanisms to quickly adapt to meet the needs.
We mentioned briefly examples of when one of the primary functions is out of balance and the negative effects upon the business this can cause. When two or more of the functions are unbalanced the effects can be exponentially worse.
In our simulation, not acquiring enough long-term debt to make the proper investments in automation and supply chain management cost our team severely. Even though our quality and our marketing efforts received enough financial attention, not investing in sufficiently in SCM caused us to stock out after round three.
Though our team faced a number of challenges, the graph illustrated above shows some interesting achievements. We were able to maintain a relatively constant net profit growth stream. The only round in which it did not increase was in round three. The illustration also contrasts our cash levels which represents much of the explanation for the drop in net profit in round three. The retained earnings trajectory is also a bright spot for our team. Since we were able to retain this profit, this allowed our company to post a respectable performance.
17389 29851 75990
17814 11722 87229
Net Profit Cash RE
Round 1-5305 20945 34887
Round 2-6325 12616 41211
Round 3-3297 0 44508