Company A used to build drilling rigs.
They went bankrupt.
They did $8 million in revenue then jumped up to over $100 million, then they ran out of cash.
One of their issues was that they had no visibility into their processes.
At one point, they had a multi-million dollar rig laying in the yard. Why? Because someone forgot to order the specialized window for the doghouse.
Had to wait 3 weeks until the new window came in. Which of course delayed cash flow.
They could have had a single system with the bill of materials; all the parts that need to be ordered, and all the parts that are on site, with lead times for the whole project – the whole MRP (materials requirements plan).
So often, the common thread of these bankruptcies is that they manage by crisis – and no one wants to manage by crisis.
The only way to get past it is to plan – be proactive and anticipate the problems.
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