Finding cash in your business

Client team

A global manufacturer of speciality chemicals for construction and industry.
A multi discipline team with extensive analytical skills across working capital.

The CFO wanted to know the optimum position possible for working capital without changing sales or purchasing terms.
What were the barriers to achieving this on a consistent basis and what was required to do so.

Role

To complete a scoping that confirmed the current performance and previous trends and set these against the best possible opportunities based on inventory and production cycle time, customer terms and supplier agreements.

Activities and Deliverables

We wrote data requirements to extract the necessary information covering 2 years and agreed these with IT. The parameters were agreed at the outset alongside the output available from each data set .
Completed a desk top scoping using WCC working capital models and then completed selected country and process reviews to confirm the analysis results. Analysis covered between 50 and 70 countries with influence on 80% of working capital value.
Completed an assessment of available tools and procedures for group working capital management and prepared recommendations to develop a corporate “working capital tool kit” to establish leading practice across the business.
Prepared results that illustrated by country and by division the historic performance, the gap to own best achievement and calculated the opportunity gap to terms of business.

Net working capital to sales was approximately 22% and we identified this could be reduced to around 16% without changing existing terms.
To help deliver a consistent reduction, a group tool kit, illustrating leading practice processes was required as well as templates to manage elements of working capital and revised metrics at all levels of the business.