Cyclo

To assist investors and managers in decision-making toward the global optimum, relationships between process stages, suppliers and consumers need to be further deepened. How to provide first-class support for long-term trusts? Based on a fundamental concept introduced by William Deming’s process specification:

• This is what I can do for you; here’s what you can do for me.

Also consider that the stages do not have a one-time-and-done behavior, but an endless sequence, repeated for each new product, during the working time. An asset always enters in a stage, then is processed for some time and moves to the next stage. The whole process acts as n-stroke engine or n-pole generator, where “n” is the number of process stages.

The Process definition also emphasizes sustainability, as follows:

• The process consumes products of nature, and transform them into other products of nature.

In fact, this rule is nothing new. Raw materials are eventually purchased and entered into a process that generates products for sale. Joining both ends of the process, everything comes out of Earth, everything comes back to Earth.

Products are bought, processed, combined and become other products to be sold. Each stage individually contributes to keep the process cycle spinning. Together, they should keep up the pace, the teamwork can’t stop. The timing determines the Cyclo performance, in this case, the spin or angular speed. Spin? What turns? See in the diagram that products and money cycle in opposite directions.

At the top, Earth’s first green arrow to Stage “Sn” indicates the money from the consumer market that pays for Product Sales (PS). This money is used to pay the Raw Materials (RM) used in the Process Stages. The remaining balance is the Gain (G) which contributes to Company’s Net Profit.

On the other hand, the outer blue arrows leaving Earth to Stage “S1” represent assets traversing the path in the opposite direction. Raw materials are purchased, enter into the process, and become products that the company intends to sell.

All Stages on the chain depend on each other to keep BOTH streams spinning simultaneously.

• Money stream from selling products to the market by remunerating suppliers.
• Assets stream collected in the market being transformed into products sold;

These two streams are closely related, one only happens together with the other. Without payments there are no raw materials in production. Without raw materials there are no revenues. This is crucial for the most important measure to happen! The Gain!

More details here.

Published in Business Amplifier, also e-book and Amplificador de Negócios.