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Introduction and challenges

Optimising working capital requirements is a key issue for the company, enabling it to support strategic objectives such as financing acquisitions and investments or securing its independence in the face of hostile offers. Achieving sustainable results requires profound changes, such as a change in culture (from a purely EBIT to an EBIT and free cash flow vision), changes in responsibilities and governance, and changes in processes. Successful optimisation of working capital jointly addressing the financial levers (trade receivables and suppliers) and supply chain levers (inventories and in progress), requires a business transformation project involving all the teams. The involvement of top management is essential to define objectives, align teams with priorities and maintain sponsorship over time. The loading of operational staff from the beginning of the project must be secured to facilitate the change in their daily business practices. Finally, the role of team managers is key in this transformation to anchor target practices, ensure the sustainability of team skills development and the achievement of results.

How we can help

Drawing on its expertise in supply chain, finance and business transformation, we support clients throughout this transformation project:

  • Diagnosis to quickly identify cash optimisation levers (such as business processes and practices, performance management, information systems, organisation and skills) and quantify the challenges:
    • Sizing of the target stock via our “normative” approach allowing us to model the components of the stock (security, campaign, anticipation, in progress…) 
    • Evaluation of AP/AR earnings 
  • Definition of target business practices (review of supply chain, order to cash and procure to pay processes and associated management rules) and target performance management system
  • Design of the roadmap by assessing the issues and accessibility of the levers 
  • Support for the deployment of the target to assist teams in their skills development and the achievement of results: 
    • ‘Punch’ actions focused on the 20/80 of articles that differ significantly from the theoretical stock, and on the 20/80 of customers/suppliers that differ significantly from the target of the invoicing/payment conditions
    • In-depth transformation of business practices