The Bottom Line: Managing Your Cash-to-Cash Cycle

The cash-to-cash cycle is a key metric for measuring the efficiency of a supply chain. But many companies seem unable to deploy it with success. ''Cash-to-cash'' is defined as the period from when a company spends its first dollar on materials for a product, to when it gets back a dollar of revenue from the buyer. It's an extremely useful tool for assessing the way in which product gets to market, as well as the producer's bottom-line profitability. But many companies have a tough time implementing it. On this episode, we speak with Jay Fortenberry, a former executive with Honeywell, John Deere and Toyota. He has developed a ''cash-to-cash series'' model that claims to save companies millions of dollars through the removal of supply-chain inefficiencies. Turns out you can have a strong return on investment, but not be consistently generating cash. And the ability to do that, says Fortenberry, ''is imperative for the survival of a business.''