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Client team

  • A speciality chemicals business with operations across 60 plus countries.
  • Our team had wide experience of operational working capital management and leading practice skills.

Project aims

  • The client wanted to develop an approach to promote and deliver a more consistent performance for working capital across their diverse operations.
  • We proposed a working capital Cook Book that would provide working capital process guides, based on leading practice, that could provide a common set of tools and metrics.

What we did - our role and activities

    We designed, tested and developed a total working capital cook book – some elements of which are shown below:

    Order to Cash

    • Customer collection strategies.
    • Collection methodologies and activity logging.
    • Cash targeting to support DSO reduction.
    • Dispute management principles, surfacing, logging and resolution.

    Procure to Payment

    • Payment guidelines and trigger dates.
    • Supplier terms analysis and agreements.
    • Guidelines for discount decisions for early payment v stockholding.
    • Purchasing guidelines for PO use, maverick spend control and spend and category management.

    Supply Chain

    • Guidelines and processes with details of typical tools and KPI’s.
    • Analytical tools and techniques to identify excess stock.
    • Identify stock drivers and root causes driving high inventories.
    • Documented processes to address these root cause issues.
    • Stock categorisation and stocking policies with customer service levels.
    • Range & product life cycle management and obsolete stock management.
    • Forecasting, order management and inventory metrics.

Successes

  • The Cook Book was implemented systematically, using internal resources - with some external support where opportunities and performance justified this.
  • The group consistently improved overall working capital to sales performance – moving from 22% to 17% over 4 years.