Reporting for operation

Copyright © Wondershare Software
Reporting for Operation
Finance Perspective
道,可道, 非常道;名,可名,非常名
Dick Lam
Dec 2013

I am always a junior manager
Detail + Logic » Flexibility
• I only focus on figures which is related to daily operation
• I don’t have any strategic thinking; rather, just deal with
reporting of expenses, staff turnover, absenteeism, canteen,
dorm, daily sales, daily scrap & all trivial stuffs; above all,
asking people do what they should do
• To certain extent, my work is rather lame to senior
management; I don’t say anything presentable!
• I am just summarizing/restating something you have ever
heard before
知人者智，自知者明

This is me…
• BBA in Accountancy (HKBU)
• Master of Arts in E-Business (CityU)
• Fellow of ACCA
• Worked in various MNC and industries, mainly
manufacturing in mainland China, focus on management
accounting, business strategy, tax planning, supply chain
management and new business setup in PRC
• 2010~2011, Consultant in a US consulting company for a
countrywide supply chain project
• Now, Director of Business Process of a US mfg co.

Contact Details
Mr. Dick Lam Chor Ki
dicklam128@gmail.com
http://dicklam128 .wordpress.com
http://www.box.net/dicklam128

Agenda
1. The right attitude towards Pandora Box
2. 4 Critical Accounting Principles
3. What is Operational Risk?
4. Tactics of Reporting
5. What to report?
6. Plan-Do-Check-Act
7. Connotation

The Paradox
• Black Swan
– usually the mundane/ignorance defeat you
• Theory of Constraint (TOC)
– When it is embarrassingly right, it must be correct
• The paranoiac help you excel your peers
• Iatrogenic
– If you don’t know how to fix it, your “effort” would
exacerbate the situation
But you can buy the talents to solve it…

The right attitude towards
Pandora Box

Pandora’s Box - Iatrogenic
• Problems has existed, not days ago but years ago
• If you do not point it out, the result is revealed only
when it becomes fatal
• If you point it out, you will be hatred by people as
you hinder their comfort zone
• Don’t be silly that you can fix the issues by yourself
and overnight
Detail + Logic » FlexibilityBut at least, you wake people up….

Heuristic Question
OR

Human Nature
Detail + Logic » FlexibilityWe name Reminder as Customer Service

Inertia - The Fatal Illness
• Threshold – a fine line which below that you do not feel
the importance while above which you do feel it.
• Materiality – Limited resources, focus on the variance
which would influence Profit Making significantly
• Therefore, prioritize the job and only do the few things
• As time goes by, prioritization becomes the excuse of
ignorance

Stimulus → Response
Imitation
1
2 4
3 5
Practice
Retrospect/
Introspect
Iteration
Memory to
Reflection
• One of the Human trait is learning
• Learning is:
Detail + Logic » FlexibilityStimulus → Object → Response

Learning
• A process of searching for and integrating new information
to make sense out of disorientation
• Peter Senge writes:
– Through learning we recreate ourselves
– Through learning we become able to do something we
never were able to do
– Through learning we re-perceive the world and our
relationship to it
– Through learning we extend our capacity to create, to be
part of the generative process of life
Detail + Logic » FlexibilityCollaboration: learning from each other…..

Essence of Lean Manufacturing
• 5 S
• 5 Why
• 7 Waste (+1)
• Aggregation of small improvements to significant
change
• Kaizen force from every corner
• Persistence

Only the right detail matters
• Root Cause Analysis often tells that only the
trivial matters and usually the symptom is
ignored
• RCA is almost equivalent to 5-Why technique
– Why the productivity drops?
• Repeat the question of Why to any answer until
the root cause is found
• Only the daily down-to-earth operation matters

4 Accounting Principles
1. Matching
– Match the cost/expenses with the related revenue at the same
reporting period
2. Accrual/Provision
– Expenses/Revenue is recorded when the service/goods is
delivered or consumed, not when it is paid(cash basis)
3. Materiality
– Focus is posed on figures/% which would matter
4. Conservatism
– Recognize –ve (mainly expenses/cost) in advance if foreseeable
but no +ve to be reported
Simple, Direct & Straightforward

Manager = Messenger ?!
• It is a joke, in the past
• It is no longer a joke, in the meantime
• Duties of Managers:
– Collaborate the right persons to work out
– Deliver timely and relevant information
– Work out the platform to provide information to team
– Get the result from operation and present to senior
management
Detail + Logic » FlexibilityConfidence is a feeling…..

How information is functioning?
Activities Transaction
Records
Reporting /AnalysisDecision Rules

What is Operational Risk?
• Operation not in proper/desired
flow
• Cost/Expenses/Inventory/AR
going up
• Symptom emerges, if it is not
fixed, EBITDA will be negatively
affected
• Corrective action not at the right
time
• Usually, not sufficient investment
in platform including HR/system

Where are the Operational Risk?
• Sales
• Materials
• Labor
• Overhead
• Cash
• Inventory
• Accounts Receivable
• Accounts Payable
• Others

Critical Indicators
• Key Performance Indicators
– The higher the better
– Return on equity
• Key Risk Indicators
– The lower the better
– Overdue Debt to A/R
Detail + Logic » FlexibilityAnything else?

The Tactics
• Start from the Low-Hanging-Fruit
• Share the information with everyone
• Use different Senders and specify the responsible
staff/department
• Automate the reporting process
• Raise The Question
• Praise the person who generate the report
Detail + Logic » FlexibilityManipulate the stimulus & control the Perception

Code of Excel Report
• Use protection if restriction is needed
• Border improves legibility
• Put the total at the top, not bottom
• Consistent decimal places
• Freeze the panes
• Use data group to shrink minor columns
• Be reminded to remove external links
• Use color to highlight critical
• Limited columns, hide unnecessary worksheets
• Using Data->Group
Detail + Logic » FlexibilityDouble-Click to bring to the detail

Drill Down
Comment
Raw Data
Summary
Detail
Working

Defend why U need the reports…
• Not everybody knows the usage
of all reports
• No value of rolling out 100
reports
• Takes time to permeate the
reports’ value to the users,
readers and follower
• Format is everything
• Stimulus => Response is a must
Detail + Logic » Flexibility夫唯不爭，故無憂

Report Examples

Sales

Sales – Indicators/Reporting
• Daily Sales
– as detail as possible, by customer by product by
day
– with comparison to Sales Forecast
• Monthly Sales Forecast
– By Customer, By Product
• YTD Sales Report
– with comparison with Sales Budget
Detail + Logic » FlexibilityFormat can influence readers’ perception

Daily Sales Report
• Fields to include
– Customer code & Name
– Current Month Forecast, Month-to-date
achievement & % of accomplishment for each
customer
– Overall % of accomplishment vs. MTD target
– Customer Service and Sales & Marketing
– Outstanding/Overdue Customer Orders Amount
with remark of date deferral

Why Daily Sales Report?
• Tell everybody where we are so as to create sense of
urgency
• Point out who are responsible and they should be stared at
• Highlight what are the problems
• Alert the stakeholders that how much and how long we
lag behind
• Reveal if there is risks/opportunities
• Finally, react at the right time / promptly

What is more?
We need ACTION!!

Monthly Sales Forecast
• Forecast is the update feasible/achievable target
• Latest Forecast vs. Budget Target
• What has emerged? submerged?
• What happens with the customer?
• What happens with the products?
• What else will be for the rest of the year?
• Any contingency?

YTD Sales Report
• Why do we still need a separate YTD Sales
Report?
• Why not combined to Monthly / Daily Sales
Report?

Then, 5W1H
• What is it telling?
• Why is it so bad or really good?
• Who should be responsible?
• Where to fix?
• When to fix?
• How to fix?
Detail + Logic » FlexibilityThere is no novelty under the sun……
then
If…
else

Hot Potato / Musical Chair
Detail + Logic » FlexibilityBlame Culture?!

Gross Margin Reports
• Gross Margin By Customer, By
Product, By Month
• GM Comparison between
Actual and Forecast/Budget
• Bridge of Budget/Forecast to
Actual
Detail + Logic » FlexibilityPerception could be nurtured…

Why not combine the above 2?
• Different readers should have
different perspective
• Not everybody could read massive
information and think
• Too many focus means no focus
• Drill-down approach predominates
• Management by Exception
Detail + Logic » FlexibilitySimplicity is the ultimate sophistication

NPI Sales Progress Report
• Tracking the New Products Introduction sales progress
• Assess the beginning year of sales and the annualized
sales
• What/how much has been sold and what/how much
remain to be sold
• Evaluating the possibility of sales realization
• Checking the SOP (start of production) date and see if
there is anything going awry with the NPI schedule
• Remarking the deviation and checking performance of
related departments

What does Sales/GM report tell?
• Different time frame to tell where the business is
going to
• Understand how product mix affect your profitability
• Sales trend should be the focus of everybody
– Is there anything you do not do well?
• Only the right person could survive!

Production & Materials

What are the issues of Production?
• Lower Production Output
• Too many WIP
• Unclear WIP
• Too many Job Order opened
• Too many scrap
• Too many DL/IDL
• Too many unproductive hours

Production Output
Equivalent Units?!

WIP Report

Overdue Work Orders
Subject: Materials Closure Alert – Day1

Subject: Materials Closure Alert – Day2

Materials Scrap
X = Issued – Used – Transfer + Returned –
Scrap
What is X?
What is missing?
What is needed?

Materials Scrap

Production Materials Handling System
• Enquiry the Materials Status by Job Order
• What have been
– Issued
– Returned
– Scrapped
– Transfer (which job orders can use this RM?)
• What & how many left to issue?
• Program to transfer RM between orders
Detail + Logic » FlexibilityUsers: Line Leaders

Illustration of PPV
• PPV = Standard Cost – Purchase Price
Budget
RM: IC-x
EUR 1.20 EUR: HKD 9.50
HKD 11.40 ==> Standard Cost 11.40
Scenario 1
Purchase Cost in HKD 11.40
PPV: -
Scenario 2
Purchase Cost in HKD 11.40
PPV: -
PPV = Net PPV + Exchange Difference
Net PPV: = (1.20 - 1.26) * 9.50
(0.57)
Exchange Difference: = (9.50 - 9.05) * 1.26
0.57

Purchase Price Variance
Dickson Company
Purchase Price Variance Report
For the month of Oct 2010
Cur: HKD
PPV due PPV due
Std Tran. Purchase to Fx Amt to Price Amt
Part No. Description Unit Cost Ex Rate Cur Price Vendor Cur Ex Rate Price Qty Amount F/(U) F/(U) % F/(U) F/(U) %
111-EW-015 OVERSEAS UL 1" PEWTER WEBBINGyd 0.4500 1.0000 HKD 0.4500 LIPIND HKD 1.0000 0.4500 5,000 2,250 - - 0.0% - - 0.0%
4011116058 WOVEN TAG-STEARNS pcs 0.4687 1.1431 CNY 0.4100 WSE CNY 1.1375 0.4000 6,800 2,720 0.0022 15 0.5% 0.0114 78 2.4%
4011116058 WOVEN TAG-STEARNS pcs 0.4687 1.1431 CNY 0.4100 WSE CNY 1.1375 0.4000 188,450 75,380 0.0022 418 0.5% 0.0114 2,154 2.4%
4011116059 WOVEN TAG - V FLEX pcs 0.1257 1.1431 CNY 0.1100 WSE CNY 1.1375 0.1100 1,900 209 0.0006 1 0.5% - - 0.0%
111-BI-104 1" WHT VINYLBINDING(MATERIAL WIDE)kg 0.3487 1.0000 HKD 0.3487 WSE CNY 1.1375 0.2976 3,210 956 (0.0409) (131) -11.7% 0.0511 164 14.6%
111-BU-060-01 1" WHITE WASR-25 UL BUCKLE (OPEN)pcs 0.2829 7.7500 USD 0.0365 SITW USD 7.7646 0.0365 1,500 55 (0.0005) (1) -0.2% - - 0.0%
111-CO-800 SVO WHITE POCKET FLANNEL yd 5.1440 1.1431 CNY 4.5000 WSE CNY 1.1375 4.5000 664 2,988 0.0250 17 0.5% - - 0.0%
111-FA-003 HANGTAG/BOOKLET FASTENER pcs 0.0044 1.0000 HKD 0.0044 CHAMPION HKD 1.0000 0.0044 1,000,000 4,400 - - 0.0% - - 0.0%
111-AL-062 OVRSEA RAMP.LION CRES WOV.LABLpcs 0.4316 1.1431 CNY 0.3776 WSE CNY 1.1375 0.3800 2,450 931 0.0021 5 0.5% (0.0027) (7) -0.6%
111-AL-062 OVRSEA RAMP.LION CRES WOV.LABLpcs 0.4316 1.1431 CNY 0.3776 WSE CNY 1.1375 0.3800 13,500 5,130 0.0021 28 0.5% (0.0027) (37) -0.6%
111-AL-810-06 2006 WOVEN STEARNS, NECK LABEL/tepcs 0.1486 1.1431 CNY 0.1300 WSE CNY 1.1375 0.0500 450 23 0.0003 0 0.2% 0.0914 41 61.5%
111-AL-811-06 2006 WOVEN STEARNS,ZIPPER PULL/tepcs 0.1992 1.1431 CNY 0.1743 WSE CNY 1.1375 0.1700 250 43 0.0009 0 0.5% 0.0049 1 2.5%
111-TH-007 WONDER PET POLY E RED THRD#693dz 0.0100 7.7500 USD 0.0013 WPET USD 7.7646 0.0013 2,188,800 2,757 (0.0000) (40) -0.2% 0.0002 520 2.4%
111-TH-013 WONDER PET POLY E WHITE THRD #202dz 0.0100 7.7500 USD 0.0013 WPET USD 7.7646 0.0013 3,283,200 4,136 (0.0000) (60) -0.2% 0.0002 781 2.4%
111-TH-017 WONDER PET POLY E FOR GRN #611dz 0.0100 7.7500 USD 0.0013 WPET USD 7.7646 0.0013 547,200 689 (0.0000) (10) -0.2% 0.0002 130 2.4%
111-TH-059 WONDERPET-PET RUSSET #566 yd 0.0100 7.7500 USD 0.0013 WPET USD 7.7646 0.0013 1,094,400 1,379 (0.0000) (20) -0.2% 0.0002 260 2.4%
111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 1.0000 HKD 0.4200 LIPIND HKD 1.0000 0.4200 15,000 6,300 - - 0.0% - - 0.0%
111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 1.0000 HKD 0.4200 LIPIND HKD 1.0000 0.4200 2,000 840 - - 0.0% - - 0.0%
Target Purchase

Order Allocation
Dickson Company
Order Allocation Report
Cur: HKD
Std Qty
Part No. Description Unit Cost Rec'd Code Cur Price Qty
Rec
%
Scoring
%
O/(U)
Qty Code Cur Price Qty
Rec
%
Scoring
%
O/(U)
Qty
111-EW-015 OVERSEAS UL 1" PEWTER WEBBING yd 0.4500 5,000 LIPIND HKD 0.4500 4,000 80% 80% - XYZWA HKD 0.4500 1,000 20% 20% -
4011116058 WOVEN TAG-STEARNS pcs 0.4687 6,800 WSE CNY 0.4000 6,800 100% 80% 1,360 ABC CNY 0.4000 - 0% 20% (1,360)
4011116058 WOVEN TAG-STEARNS pcs 0.4687 188,450 WSE CNY 0.4000 150,000 80% 80% (760) ABC CNY 0.4000 30,000 16% 20% (7,690)
4011116059 WOVEN TAG - V FLEX pcs 0.1257 1,900 WSE CNY 0.1100 1,500 79% 80% (20) ABC CNY 0.1100 400 21% 20% 20
111-BI-104 1" WHT VINYLBINDING(MATERIAL WIDE) kg 0.3487 3,210 WSE CNY 0.2976 3,000 93% 80% 432 ABC CNY 0.2976 210 7% 20% (432)
111-BU-060-01 1" WHITE WASR-25 UL BUCKLE (OPEN) pcs 0.2829 1,500 SITW USD 0.0365 1,000 67% 80% (200) LISAB USD 0.0365 500 33% 20% 200
111-BU-060-01 1" WHITE WASR-25 UL BUCKLE (OPEN) pcs 0.2829 1,500 SITW USD 0.0365 800 53% 80% (400) LISAB USD 0.0365 700 47% 20% 400
111-BU-060-01 1" WHITE WASR-25 UL BUCKLE (OPEN) pcs 0.2829 1,500 SITW USD 0.0365 800 53% 80% (400) LISAB USD 0.0365 700 47% 20% 400
111-CO-800 SVO WHITE POCKET FLANNEL yd 5.1440 664 WSE CNY 4.5000 500 75% 80% (31) ABC CNY 4.5000 164 25% 20% 31
111-FA-003 HANGTAG/BOOKLET FASTENER pcs 0.0044 1,000,000 CHAMPION HKD 0.0044 750,000 75% 80% (50,000) BPION HKD 0.0044 150,000 15% 20% (50,000)
111-AL-062 OVRSEA RAMP.LION CRES WOV.LABL pcs 0.4316 2,450 WSE CNY 0.3800 2,450 100% 80% 490 ABC CNY 0.3800 - 0% 20% (490)
111-AL-062 OVRSEA RAMP.LION CRES WOV.LABL pcs 0.4316 13,500 WSE CNY 0.3800 10,000 74% 80% (800) ABC CNY 0.3800 3,500 26% 20% 800
111-AL-810-06 2006 WOVEN STEARNS, NECK LABEL/te pcs 0.1486 450 WSE CNY 0.0500 450 100% 80% 90 ABC CNY 0.0500 - 0% 20% (90)
111-AL-811-06 2006 WOVEN STEARNS,ZIPPER PULL/te pcs 0.1992 250 WSE CNY 0.1700 240 96% 80% 40 ABC CNY 0.1700 10 4% 20% (40)
111-TH-007 WONDER PET POLY E RED THRD#693 dz 0.0100 2,188,800 WPET USD 0.0013 1,100,000 50% 80% (651,040) SQET USD 0.0013 1,088,800 50% 20% 651,040
111-TH-013 WONDER PET POLY E WHITE THRD #202 dz 0.0100 3,283,200 WPET USD 0.0013 3,000,000 91% 80% 373,440 SQET USD 0.0013 283,200 9% 20% (373,440)
111-TH-017 WONDER PET POLY E FOR GRN #611 dz 0.0100 547,200 WPET USD 0.0013 500,000 91% 80% 62,240 SQET USD 0.0013 47,200 9% 20% (62,240)
111-TH-059 WONDERPET-PET RUSSET #566 yd 0.0100 1,094,400 WPET USD 0.0013 500,000 46% 80% (375,520) SQET USD 0.0013 200,000 18% 20% (18,880)
111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 15,000 LIPIND HKD 0.4200 15,000 100% 80% 3,000 XYZWA HKD 0.4200 - 0% 20% (3,000)
111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 2,000 LIPIND HKD 0.4200 2,000 100% 80% 400 XYZWA HKD 0.4200 - 0% 20% (400)
111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 15,000 LIPIND HKD 0.4200 10,000 67% 80% (2,000) XYZWA HKD 0.4200 5,000 33% 20% 2,000
111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 13,000 LIPIND HKD 0.4200 10,000 77% 80% (400) XYZWA HKD 0.4200 3,000 23% 20% 400
111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 2,000 LIPIND HKD 0.4200 2,000 100% 80% 400 XYZWA HKD 0.4200 - 0% 20% (400)
Primary Vendor Other Vendor - 1

Labor

Labor Definition
• Direct Labor
– Normal Workforce/Work-in-process Quality
Check/Material handlers/Manpower to setup
• Indirect Labor
– Shop Floor Management
• Salary Labor
– For all non-direct & non-indirect

Labor Statistics

OT Application

Labor Structure & Ratio
Dickson Company
Labor Span of Control
Dept DL IDL SL Total DL IDL SL Total
Mgt - - 4 4 - - 4 4
HR - - 25 25 - - 23 23
Finance - - 7 7 - - 7 7
IT - - 5 5 - - 5 5
PMC - 10 10 - 10 10
WH & Logistics - 20 5 25 - 19 6 25
Purchasing - - 6 6 - - 6 6
Engineering - - 25 25 - - 24 24
Production - -
WC-1 150 10 2 162 132 9 2 143
WC-2 200 12 3 215 194 13 3 210
WC-3 133 8 2 143 120 7 2 129
WC-4 220 12 2 234 230 13 2 245
WC-5 50 3 - 53 45 4 - 49
WC-6 80 5 1 86 76 6 1 83
WC-7 100 10 3 113 93 8 3 104
WC-8 75 12 1 88 65 11 1 77
Subtotal 1,008 72 14 1,094 955 71 14 1,040
DL/IDL 14.00 13.45
DL/(IDL+SL)
Total H/C 1,008 92 101 1,201 955 90 99 1,144
DL/IDL 10.96 10.61
DL/(IDL+SL)
Total Cost 'k 2,568 442 758 3,767 2,433 432 743 3,608
DL/IDL 5.82 5.63
DL/(IDL+SL)
Jan-10
11.72
5.22
2.14
Feb-10
11.24
5.05
2.07

Labor Allowance Factor
• Labor Hours – derived by Industrial Engineers
• Paid Labor Hours
• Allowance Factor = 1 – Labor Hours / Paid
Labor Hours
• Measure non-productive hours

Weekly Income Statement
• Why?
• What should be included?
– Sales
– Cost
– Expenses
– Inventory
– Productivity
– Quality
– What else?

Inventory

Accounts Receivable
• A/R Aging
• Probable Over-credit Report
• Bad Debt to Sales / Bad Debt Movement

Weekly Cash Flow forecast
Asia Harness Week Week 45 Week 46 Week 47 Week 48 Week 49 Week 50 Week 51 Week 52 Week 53 Week 54 Week 55
Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
10/26/08 11/2/08 11/9/08 11/16/08 11/23/08 11/30/08 12/7/08 12/14/08 12/21/08 12/28/08 1/4/09 1/11/09
Beginning Cash 226 226 441 122 422 292 292 58 258 105 146 476
VAT Receipts - - - - - - - - - - - -
Other Receipts -
Cash Receipts (A/R collections) 100 100 100 10 100 100 100 41 100 138
Total Cash Inflows - 100 100 100 10 - 100 100 100 41 100 138
Cash Payments (A/P Checks and wire transfers) (1,197) (1,919) (1,100) (1,100) (1,277) (1,200) (1,713) (1,000) (1,270) (1,100)
Payroll (200) (40) (200) (40)
Capital expenditures (188) (57)
Other nonworking capital items
VAT Payments
Tax Payments
Other Payments
Total Cash Outflows - (1,385) (1,919) (1,300) (1,140) - (1,334) (1,400) (1,753) (1,000) (1,270) (1,100)
Loan / (Excessive cash) 1,500 1,500 1,500 1,000 1,000 1,500 1,500 1,000 1,500 1,000
Total Intercompany - 1,500 1,500 1,500 1,000 - 1,000 1,500 1,500 1,000 1,500 1,000
Interest - - - - - - - - - - - -
Principal - - - - - - - - - - - -
Total Financing - - - - - - - - - - - -
Other - - - - - - - - - - - -
Ending Cash 226 441 122 422 292 292 58 258 105 146 476 514
Detail + Logic » FlexibilityReport of Accounts Payable??

Do you want to know more?
• DPPM, Internal & External
• 1 Pass Rate
• Customer Complaint
• FIFO
• Downtime
• ……
Your Decision!!

How strong are you?
• Plan: Do you plan for any objection or refusal?
• Do: Can you persevere? Can you do it if other people do
not do? Any plan B?
• Check: Can you sort out the abnormalities or exceptions
from these figures?
• Act: Will you override yourself?
Detail + Logic » FlexibilityDo you know the business and the operation?

How would people look at U?
• This guy is only focusing on data, not people
• This guy knows nothing about the business, rather, play game
with data
• This guy cannot handle crisis; if there is labor strike or
customs inspection, he must be the first one running away
• We need to hire more people to fulfill her/his requirement
• Anyway, he is nothing but management; I have to entertain
him/her!
• Jesus, when will he/she leave the company???
Detail + Logic » Flexibility勝人者有力，自勝者強

Think Different
SIX
THINKING
HATS
Negatives
Caution
Logic
Faults
Danger
JUDGEMENT
Observe
Objectives
Goal
Rules
Big picture
MANAGE
Feeling
Intuition
Emotions
Don't rationalize
Don't justify
EMOTIONS
Possibility
New Ideas
Alternatives
Concepts
Growth
CREATIVITY
Optimism
Positives
Benefits
Make it work
Values
BRIGHTNESS
INFORMATION
Facts
Information
Documentation
Known/Unknown
No options
Detail + Logic » FlexibilityThink Ahead

The purpose of the hats
Used to unscramble thinking so that a thinker is able to
use one thinking mode at a time – instead of trying to do
everything at once

Intuition & a method
• “If you don’t have intuition, no method will help
you.
• But if you do have intuition, you can still flounder.
• Intuition is a necessary condition for finding
solutions
• You must have a method to unleash, focus and
critique your intuition if you want to arrive at
practical, simple solutions.”
----It’s not luck

Common Sense
• Something only if it is in line with our own intuition
• But, there is so often the need for an external trigger to
help us realize something that we already knew
intuitively
» What is your common sense?
» What is the common sense of your
organization?
» Any common language then?

Any strategy to create the
common sense for your
organization?

Your assumption on people
• The way you look/treat the people, the people you
would hire
• Every dog has its own day
• Stimulus -> Object -> Response
• Brain vs. Hand

Loyal
Listener
Energetic
Accomplishment
Honest
Passionate
Helpful
Proactive
Respectful
Strategic
Reliable
LEA ED RSH I P

Incumbent Effect
• Everyday should be the same
• Don’t change the life/work style
• Already too busy for any new job task
• Novelty is 2-edge sword: goodness associates with badness
• Are you sure you can implement the change effectively?
• If it ain’t broke, don’t fix it
Detail + Logic » FlexibilityCan change be the objective?

Keep the momentum
• Who is losing momentum?
• Why?
– Is it due to frustration with the management?
– Is it due to longstanding with the same position?
– Is it due to lack of challenge/change?
– Is it due to poor perception of prospect?
• Are you determined to keep the momentum?
– Plan-Do-Check-Act
– There is no 1-click action
Detail + Logic » Flexibility善用人者,為之下

Introspection of Finance Operation
• Is it functioning well?
– Do all expenses book at right time?
– Are there too many accruals? Why not get the billing
on time?
– Are there too many provisions? Why not get book the
actual expenses?
– What is the basis of the provisions? Are they agreed?
– Are the finance people know the business and
operation?

Complaints
• Why are my expenses claim always reimbursed 1
month after the submission?
• Why are the Financial Controller/Finance Manager
only raising question without constructive and
workable solution?
• What are they doing? They always OT but I don’t
know any operation improvement brought out by
them.
• Rumor: they get decent package but I don’t!!

Can An Accountant
manage factory operation?

Yes, because …
• Data-driven vision leads to pragmatic attitude
• Conservative which reduces risk exposure of the
company
• Details + logic enable flexibility
• All activities becomes accountable

No, because ….
• Stingy
• Not sensitive to people care and people management
• Only look at figure on every paper and less patient
enough
• The figure cannot be creative itself, it is only a tool
for revelation of the reality

The correct perspective
• The figure cannot tell how to re-structure the
organization, it can only tell who is not qualified to
work on index
• But problem is usually originated from improper
construction of platform

Do you think …
The lack of financial knowledge
is the bottleneck of your
personal career development
and your organizational
development as well

Epilogue
• Create the platform of socialization within the
organization (Organizationalisation)
• Principles to assimilate
– Collaborative
– Rational Thinking
– Data first, Modeling second, Action third and
Review final
– Knowledge Transparency

Power
Should always be distrusted, in whatever
hands it is placed
Sir William Jones

• Exclusive possession of knowledge creates
power with the possessors
• Power distance inhibits square exchange of
idea, knowledge, respect and trust
• Good player of figure is short-lived power
player

Secularization of Knowledge
• Finance & Accounting
• Supply Chain
• Quality Assurance
• HRM
Detail + Logic » FlexibilityShould we secularize hierarchy?

Empowerment
• Figure/Index can serve as the basis of being
empowered
• It also represents being entrusted with
expected result (of course, reasonable
expectation)
• Principal & Agent need the bridge

Financial knowledge/information
• A tool to bridge different functions to the
objective
• Good use of it can help empowerment of staff

If we still have time, talk about:
• MOQ report
• Forecasted Income Statement
• BOM Cost Comparison by version
• Can we use Excel as an input template for ERP
system?
• …..

Reporting for operation

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Reporting for operation