Finding cash in your business

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.

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.

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

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.