ManufAi

Cash Lever #1: Lower WIP (aka “Stop Collecting Half-Finished Souvenirs”)

What happens: Smarter sequencing → fewer partials → faster throughput → less WIP sitting around like it pays rent.

Sassy truth: Every pallet of half-built product is a savings account with a terrible interest rate.

Tiny math:

Cut average WIP by 18% on a $3M WIP base → frees $540k. Even if your cost of capital is only 8%, that’s $43k a year in “hey look, money!”

How S&OP does it:

• Commit to a 4-week freeze window on the bottleneck line.
• Use changeover-aware sequences (yes, the AI cameo) to reduce setup hours.
• Track schedule adherence like it insulted your family.

Cash Lever #2: Right-Size Safety Stock (Emotional Support Inventory, Begone)

What happens: Match safety stock to actual variability and service targets → less money on the shelf without fear sweats.

Sassy truth: If your safety stock is a round number you “feel good about,” that’s not planning—that’s aromatherapy.

Tiny math:

Trim safety stock 12% on a $5M inventory → frees $600k.

Service holds because you recalculated ROP with demand variability and supplier lead-time reliability (not vibes).

How S&OP does it:

• ABC by variability (not just revenue).
• Recompute ROP/SS quarterly for volatile SKUs.
• Publish the Service vs. Inventory curve so Sales picks a point like an adult.

Cash Lever #3: Lead-Time Hygiene + Supplier Reliability (AP Terms You Can Actually Use)

What happens: Clean, honest lead times + dependable suppliers → fewer expedites → AP terms you can keep instead of apologizing for.

Sassy truth: “Net 60” means nothing if you’re overnighting parts every Thursday.

Tiny math:

Cut expedites 20% on a $1.2M annual expedite habit → $240k saved.

Hit OTIF and watch suppliers say yes to +15 days on terms—free working capital, no CFO sermons required.

How S&OP does it:

• Publish lead-time adherence by supplier; flag chronic offenders.
• Dual-source high-risk parts (open relationship, healthy boundaries).
• Tie AP term decisions to supplier reliability, not friendship bracelets.

Where AI Helps (No Hype, Actual ROI)

• Demand sensing: nudges the next 2–6 weeks so you don’t hoard.
• Bias checker: turns sales optimism into numbers you can use.
• Sequence optimizer: lifts OEE and shrinks WIP.
• Risk pings: “Hey, Route 8 is on fire again” → fewer last-minute freight splurges.

Robots still need Carl from IT, but they can help you stop lighting cash on fire.

Conclusion:

S&OP isn’t a feelings circle; it’s a cash machine when run like one plan, one language, one reality. Get the couple (Forecast & Factory) to stop subtweeting and your balance sheet suddenly looks…happy.

Next week I’ll post the Working Capital Cash Sprint Toolkit—templates for ROP/SS, a supplier reliability scorecard, and a one-page cash bridge you can drop into your S&OP deck. Subscribe to MANUF-AI so it lands in your inbox without any expedites. 🙂