Where can a manager find insights for business improvement?

One of the most reliable sources of insight is the variance you spot in regular reporting: any “why did this suddenly happen” is worth digging into all the way, because that is usually where the next opportunity for improvement is hiding.

Let me walk you through an example from inventory management.

At one of our QPRs (Quarterly Performance Reviews), we noticed that inventory turnover at our remote office had tripled. Against a target of 60 days, it stood at 180. Spare parts and components were sitting on the shelf for six months, even though our repair cycles rarely exceed two to three months.

We started digging. The site director threw up his hands: “Try getting components delivered to us on time. Procurement approval takes a month, the contract takes another month, and logistics is unpredictable. And what if an order suddenly lands on us out of nowhere and we’re caught without stock? I had a case two years ago... We’d miss revenue. And besides, you finance people always want discounts, just to save a few kroner.”

A whole tangle of problems. Where to start?

We started with analysis.

External: we benchmarked against the industry and the region. This confirmed that a 60-day target is standard practice among comparable companies.

Internal, point by point:

1. Why was the director afraid an order would suddenly land on him out of nowhere and leave him without parts? The root cause was in planning and in how information reached people on the ground. Our fix: we assigned a dedicated business partner to communicate financial information to the people executing the work, discuss revenue forecasts and expected orders, adjust plans together with the team, and set budget limits directly in the ERP system so that approval and procurement could move quickly within those limits.

2. Unstable delivery times and outstanding payments shook up the entire procurement function. We audited suppliers, assessed their reliability, and lined up backups. New contracts built in regular deliveries in smaller batches on an agreed schedule.

3. What about the risk of rising prices? The obvious answer seemed to be locking in a price or setting a ceiling in the contract. In practice, that rarely worked. What worked better was an option: the right to buy a set volume at today’s price within a given period, even if the market moved up.

4. Volume discounts and minimum order quantities. We compared the full cost of holding a batch in the warehouse, including carrying excess stock and the cost of capital, against the value of the discount. Buying in smaller batches without the full discount turned out to be cheaper than stocking up: cash got tied up, the warehouse filled up, and we rarely used the full discounted volume anyway.

5. Syncing sales, procurement, and production forecasts. We moved to rolling forecasts so the combined demand plan stayed current. People from procurement, sales, and production took an active part in reviewing and updating it.

6. We revised procurement’s KPIs. Previously they were tied only to on-time delivery and discount size. We added turnover, share of excess stock, and total cost of ownership to the mix.

7. We revised inventory norms and stock controls. Updated guidance now requires checking available stock, goods in transit, and confirmed demand before placing an order, and regularly reviewing items with no movement.

8. Budget utilization as an end in itself. I don’t see this framing from leaders often, but as a general rule of thumb: check whether KPIs are tied to spending the full budget by year end. If they are, it’s worth allowing justified purchases and funds to roll over into the next period instead - that removes the temptation to buy “just so the budget doesn’t disappear.”

9. Changes and cancellations. Supplier contracts now include the option to postpone, reduce, or cancel a delivery, and we discussed returning excess stock to suppliers.

A single deviation in one turnover metric set off an entire c

hain of transformation. Beyond the gains in liquidity, lower storage costs, and fewer losses and write-offs, engagement at the remote office rose noticeably. The team saw the results of working together, better planning, and their own ability to influence performance - and moved on to their next initiative, an Idea Factory.

That’s how one single metric, once it fell out of range, became a source of insight for the whole organization. Almost an Insight Factory.