Management of Financial Resources for Sustained Success...

Management of Financial Resources for Sustained Success  Financial resource is a very important resource which an organization needs not only for its functioning  but also for its sustained success. For this purpose the organization need to have systems in place that help it to both fund its ambitions and also to manage its financial resources in support of its daily operations, including funding for improvement activities. Normally financial controls are applied by the management which enable it to take a proactive management position in the business. The three most important financial controls are namely (i) the balance sheet, (ii) the profit and loss statement, and (iii) the cash flow statement. But the management of financial resources is much more than the exercising of the financial controls. The management of the financial resources is an important function of the management in the organization. This financial management starts with the financial planning. Financial planning is a continuous process of directing and allocating financial resources to meet strategic goals and objectives. The output from financial planning normally takes the form of budgets. Financial planning works from the strategic and business plans to identify what financial resources are needed to obtain and develop the resources to achieve the goals in the two types of plans. Typically, financial planning results in very relevant and realistic budgets. Financial planning normally starts at the top of the organization and has basically two components namely (i) planning for operations, and (ii) planning for financing. Operating people focus on production and sales while financial planners are interested in how to finance the operations. Financial planning is the process that encompasses both operations and financing. In a normal organization, typical financial functions within an organization are a host of the accounting activities such as...

Spares Parts Management...

Spares Parts Management  Spare parts are the lifeblood of operational reliability and plant capacity.  No plant can operate at a high level of output without a reliable supply of functional spare parts. Yet, spare parts are also the most overlooked contributor to reliability outcomes.  Many organizations routinely operate without properly implementing even the most fundamental aspects of spare parts management at their sites.  Often these organizations have storerooms with neat shelves and clear labels but this is not enough for highly reliable spare parts management.  Effective spare parts management is essential for making a difference in the operational reliability. Superficially, achieving best practice spare parts inventory management looks simple because spare parts can appear to be just like any other inventory.  But in reality they are different from other inventory types and this is reason why best practice (or even good practice) can be so hard to achieve. In reality, the spare parts management brings together the diverse disciplines of maintenance management, inventory management, storeroom management, supply chain, procurement and logistics. This adds a layer of complexity that is usually not found with other inventory types. It is a paradox to note that the maintenance department always complains of the non availability of the spare parts to meet their requirement and finance department always faces the problem of increasing locked up capital in spare parts inventory. This amply signifies the vital importance of spare parts management in an organization. Spare parts management plays an important role in achieving the desired plant availability at an optimum cost. Steel plants are normally capital intensive, mass production oriented and with sophisticated technology. The downtime for steel plant and its equipment is prohibitively expensive. The unique problems faced by the steel plant management in controlling/managing the spare parts...