By Innocent Hadebe
Africa-Press – Zimbabwe. REVENUE is an integral measure of the success of a business, but it is not the sole success metric.
A healthy, future focused organisation measures multiple dimensions of its business to have a line of sight on whether it is truly creating value, building structures for resilience and sustaining growth.
Below are a few key measures a business should focus on beyond just revenue;
Operational efficiency — Inventory turnover is how quickly stock is sold and replaced.
This is a business approach that measures a company’s ability to produce goods and services with minimal resources and reduced waste while maintaining or improving quality to drive a competitive edge.
Operational efficiency incorporates rate of stock turn which is categorised into two groups — high rate of stock — turn and low rate of stock-turn.
When an organisation records a high-rate of stock turnover it informs the management that the company is implementing effective inventory control systems and would record high revenue, which is healthy for the organisation.
Low rate of stock-turn indicates poor demand of products or services which is not healthy for the organisation.
A low rate of stock–turn also indicates inefficiency in inventory management and paints a picture of a company reeling under inefficient operations and poor production planning.
Cycle time — it is how fast you deliver from order to fulfilment.
Cycle time is the total time it takes to complete one unit of a product from the beginning to the end of a specific production process.
Cycle time aids management in identifying inefficiencies in the production process and helps them to come up with strategies to find solutions to reduce inefficiencies or redundancies.
It helps to improve productivity by allowing businesses to identify and eliminate bottlenecks and waste, ultimately improving customer satisfaction.
This is important in organisations as it helps management to understand where much time is spent in the production process after that the management would come up with strategies such as automation or streamlining the production process to reduce bottlenecks and drive throughput.
Understanding cycle times guides and helps management to efficiently allocate resources such as workforce planning and equipment reliability so as to avoid overstaffing or under-utilisation.
An effective and future focused management prefers to keep production costs at minimal as such it follows that shorter cycle-time is desired.
Employee engagement and productivity — Turnover rate is how often employees leave a company.
Management has to align its workforce to the vision and purpose of the organisation so that team members would know what is expected of them.
Organisations can boost employee engagement by focusing on effective communication, recognising and rewarding target achievers, championing a positive work-culture and supporting employee wellness.
Engaged employees are motivated to excel and tend to be laser focused on achieving organisational goals.
Employees who feel connected are likely to stay at the company longer while ensuring greater consistency and efficiency.
On the other-hand, employee disengagement is often linked to poor management and too much workload with poor organisational culture.
It results in low morale, absenteeism and increased errors.
Customer-centric metrics — How much does it cost a business to gain one new customer?
How much does a customer contribute over the length of the relationship? Do customers come back or do they leave?.
Revenue is a good indicator on how much money is coming in.
But to build a resilient and trusted enterprise; profitability, customer loyalty, employee engagement and long term impact are foundational to scalable success of a business.
Source: NewsDay
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