Five whys analysis

- We've just been contacted by a company with a recurring cash flow problem. Their sales are flat the first two months in every quarter. Then the last month of that quarter they make 70% of the sales. Let's use the five whys to help them find the root cause of their irregular cash flow. For this five why analysis we'll assemble a team from sales, operations, finance, human resources, and purchasing, and keep asking why until we find a fixable cause. Why is cash flow irregular? Because over 70% of sales happen in the last month of a quarter. Why do 70% of sales happen in the last month? Because clients confirm most orders at the end of the quarter. Why? Because they know that's when the company authorizes sales discounts. Why? Because the company works to catch up before the end of the quarter to make the budget numbers. Why? Because shareholders measure performance quarterly. With this last response the team…