TABLE OF CONTENTS 
A company must be profitable to survive. Profits reward shareholders, provide growth opportunities for suppliers, and result in increased products and services for the customer. Any form of waste will drain financial resources, a runoff that may be either visible or invisible. Every dollar spent and earned should be treated with disciplined respect. What would our organizations look like if every dollar were treated as if it were our own personal money? The logistics function touches every aspect of financial flow in and out of the organization, from supplier to customer and all operations in between. The three strategic focus areas of Financial Flow are:
Income Statement
Balance Sheet
Cash Flow
These three areas will be discussed in this chapter.
Truism: The income statement paints a mixed picture. On one hand, it shows us the direction we are headed; on the other hand, it fails to uncover significant waste.
Books on Lean and Six Sigma seldom focus on the income statement. They would argue that if you focus on physical inventory flow and the elimination of waste, the results will appear in the income statement eventually. Seemingly, the income statement is a report that outlines the effect of decisions made during the previous accounting period. Managing through your income statement is a rearview mirror approach. A disciplined organization will focus on strategic and operational issues as opposed to the income statement. Even so, in reality, the income statement cannot be ignored. Logistics professionals need...
