🔹 We know inflation can erode our wealth if just leave the money in the bank. So we’d invest in something like property, stock, or other businesses… that can bring us bigger returns to offset this effect, and to even stay floating above.
Eg. 1 million kept in the bank, in 10 years, the money’s value or its affordability becomes 400k less (Chart 1), at 5% inflation;
if at 7%, it’ll be halved.
🔹 Ineffective supply chain/operation causes a much bigger erosion to a company’s capital than inflation, as each year money is repeatedly thrown to water.
Eg. Spending 300k unnecessary costs annually on operations/supply chain. If it had been reinvested into the business to enjoy say 15% profit rate each year, in 10 years, it would have been 𝟖𝟰 million’s loss (Chart 2).
If the company were at a difficult time, this money could have been a rescue fund for survival.
Money either earnings or spending, once being put through time, this invisible yet powerful magnifier, it’ll never be something we could just leave it be.
▸ We want to make things right for keeping positive earnings all the time;
▸ And, we want to make sense of all spending to minimise the unnecessary portion, as early as possible.
However, because we are mostly affected by the present (the upfront issues, focuses, abstractions…. ), we tend to feel little about the shrinking of money, of the impact that has been generated and accumulated ‘under the water’.
♠️. ♠️. ♠️.
Effective supply chain/operations, not only form a solid support to sales, but also help to accumulate compounding $$$ into a company’s wealth and its promising future.
This is what we hope to bring to Australian wholesalers and manufacturers,
and beyond.
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