Lean Six Sigma: Cash Flow Management and Lean Six Sigma

Due to the sudden wake of Covid19, almost all the organisations are going to face an economic contraction in the coming future. The inadequate receivables during this pandemic are likely to impact the cash positions of the companies.

Positive cash flow allows a company to operate, invest, and grow in a way to reach its potential. It is important to keep in check the net amount of cash receipts minus cash expenses by monitoring, analysing, and optimising them. Cash flow management helps in knowing when where and how your cash needs will occur. Also, it helps in being prepared for meeting the additional cash needs whenever required. The net amount of cash and cash equivalents being transferred from into and out of the business can be managed more efficiently by adopting various methodologies that not only improve your business tactics but also help you to renovate and carry out your business profitably.

It is seen that companies that execute their operations using Lean Six Sigma have leveraged from the best problem-solving methods to help their organisations achieve their missions and satisfy their customer needs.

Lean six sigma has shown to be the most predominant in use with indicating that it has actively helped in maximising the OTC processes of the companies. An improvement in the operations of management can result in permanent advancement of cash flow and a significant improve in the OTC processes associated with collections and corrections of accounts. In a competitive market space, customers are more likely to value corporate stewardship and attuned to quality expertise. In a survey, it is found that two-thirds of customers would prefer to build a relationship with the companies that contribute to the good of the society.

It is always beneficial to work with the help of various programs and models to increase the efficiency of your business and identify the loopholes before-hand. Organisations can achieve a dramatic increase in both quality and sustainability by adopting a single process methodology: Lean Six Sigma.

The seven cash flow drivers- accounts payable, accounts receivable, revenue growth, gross margin, selling/general & administrative expense, capital expenditure and inventory can be controlled and managed in a way that doesn’t affect the cash position of an organisation in a heap. By investing and committing to the methodology, one can facilitate the following positive improvements: