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Client team

  • Civil and defence aerospace and maritime company with revenues of £10bn.
  • Scope covered group operations for inventories, receivables and payables.
  • A team of experienced total working capital consultants supported by off site technical expertise.

Project aims

  • Following a prior engagement, when working capital reduction exceeded £200 million, the company CFO wanted to identify and confirm further reduction potential.
  • The internal focus had shifted onto operational cash flow, but the scope to reinforce reduction opportunities and structure metrics to manage potential was required.

What we did - our role and activities

    Role

    • Complete a group high level working capital scoping covering operations in UK, US, Europe and Asia and conduct selected process reviews to identify scope for leading practice
    • The review was completed within 5 weeks.

    Activities and Deliverables

    • Initiated to establish performance trends over 2 years
    • Estimate the potential to reduce working capital
    • Identify areas of opportunity outside of known initiatives
    • Results were presented with trends across each area and identification of “best possible” and “own best” completed where data supported
    • The review covered current process and informal discussions with over 50 people across working capital process areas

    Results were delivered to the operating board and further areas for internal focus and opportunity identified and agreed

Successes

Results

  • Scope for between £380 million and £640 million of further working capital reduction identified

Identified Potential

  • Extend leading practice collection processes across transaction hubs in the US and Europe
  • Design and develop dispute management processes
  • Hold a detailed review of terms linked to debtor management
  • Rationalise payment terms, link to process simplification
  • Validation of specific payment term categories and terms optimisation
  • Evaluation of aftermarket services supply chain integration
  • Extend scope of supply chain planning across the business
  • Implement standardised inventory performance measures.