Bookings, Backlog and Shipments Oh My!

bookings backlogs shipments billings KPId

While watching the Super Bowl, I noticed Tom Brady and his quarterback coach studying images of the plays that they had just experienced. In as close to real time as it could be, they were looking for clues about how to more intelligently move the offense. They were looking for ways to exploit the weaknesses in the other team. [Sorry, Patriots fans–the Philadelphia Eagles did the better job of execution this time around!]

In the world of manufacturing, the metrics that top executives care about from a dollar perspective are:

  • Bookings–what new business have we received firm orders for
  • Backlog–what was the total amount of unshipped products
  • Shipments–how much revenue had shipped out the door

These numbers were provided on a daily basis. As director of customer services, this report was the first thing I did each morning when I arrived at work. At that point in time, it was not easy to prepare this information. There was no automation to generate the report the way it was needed.

In today’s world, finance has the tools to measure these parameters on a daily basis if they choose. Finance is able to “throw a flag” if the numbers aren’t measuring up to expectations. The flag can be reductions in current spending and even cuts to planned investments.

As Tom Brady knows, the more intelligence you have the better you can execute. This notion works in any business.

Thought for the week:

“From my very first day as an entrepreneur, I’ve felt the only mission worth pursuing in business is to make people’s lives better.” – Richard Branson

What do you think? I welcome your comments! Dave Gardner

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