DaimlerChrysler: Revving the Finance Engine.

• Position: Interview

Everything is non-value-added until it's been proven to be value-added," says Frank Sklarsky, vice president for corporate financial activities at DaimlerChrysler. And Sklarsky sees continuous opportunities for double-digit efficiencies all over the place.

"We try to take the approach that there's 90 percent or 95 percent waste in everything we do," he says. When a worker puts a hubcab on a car, for example, Sklarsky thinks, "The only thing that's value-added is the last turn of the bolt. There's no limit to the amount of improvement you can make in any process." But, he hastens to add, not at the expense of quality.

Thus, in its quest to enhance the capability and excellence of its financial processes, Sklarsky says, DaimlerChrysler has "shifted the focus from a transactional, 'factory finance' view to one that offers greater value to our customers. We have to improve the cost or efficiency, cycle time and quality of everything that comes out of the controller's office. And quality means accuracy in both reporting and forecasting."

One operating tip: "Always move from manumation to automation," Sklarsky advises. "Any time there's a piece of information, record it once. Then you can funnel it where it needs to go and let the computer do the reporting."

He uses the acronym BHAG -"big, hairy, audacious goals" - because, he thinks, "It's better to come close to meeting an outrageous goal than to meet an average one." So, for instance, while the controller's office in the former Chrysler Corp.'s Auburn Hills division now can close the books in two days, it's working on closing them in fewer hours, with fewer resources.

That same controller's office has shrunk by about one-third (from about 1,800 people in 1992 to roughly 1,200 today, mainly through attrition). But operational efficiencies have increased productivity. These efficiencies include balance sheet and income forecasting; implementing and streamlining investment planning; consolidating ledger output; launching SAP in Mexico as a pilot program and planning to launch it in the U.S. and Canada next year; a single inventory record...