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How do you get management to invest in your facility?

Posted in Operations, Logistics & Engineering on November 10, 2011
There are (1) comments permalink

Joel has been a plant manager for 15 years, prior to that he was an accountant so he is very confident in his ability to plan and justify capital expenditures for his facility. However, over the last five years corporate management has been approving nothing. Joel’s plant is one of four and the only one making a profit. The strategy from management has been to spend all capital on trying to get the failing facilities fixed and using Joel’s plant to fund it. Five years without investment is starting to take its toll in Joel’s opinion. He has tried to become more efficient, implemented low cost alternatives by speeding up processes and improving workflow, but competition is increasing and margins are hitting the point where he can’t maintain them without larger capital investment. Budget time is coming and Joel needs to get corporate to support his ideas this year. He fears his plant will be a money loser if he misses this opportunity.

How can Joel get his company’s management team to invest in his facility?
What does he need to do to justify his requests?
Who should he work with to get support before he makes his budget presentation?
What approach should he take when presenting his budget?

Comments (1)

stanBR89 posted on: April 13, 2012

Try aligning yourself with a specific sales person and customer where an investment will generate NEW revenue. This should get management''s attention. If you can start making some gradual improvements linked to new profits, then you will have a bigger voice when you want to present plant upgrades for existing business. As you get approval and start using the funds, invite management to your facility and show off the investment along with a presentation about the results. Work with your sales and marketing team to include them in the presentation. It has been so long since management has seen this as a strategic investment, the more you include sales and marketing, the more likely you can change their mindset and get the funds you need in the future.