Case Study:

Releasing cash through improved materials planning & distribution. How process visualisation and cross-functional problem-solving lowers working capital (as well as getting product to customers on time)!.

 

Client

A Belgian Industrial Manufacturing business processing high volumes of coil product through a number of conversion processes into a range of customer requirements. The client had identified a high value of working capital caused by a number of potential issues from forecasting to inventory, to quality and through to ordering and inbound logistics.

The Challenge

Identify the root causes, establish the resolutions, rapidly release working capital and put in place a monitoring and management process to allow the client to drive further improvement.

Approach

Working capital is a team sport. The starting point was the creation of a cross-functional team, led by Procura, with a clear objective to find and fix.

A comprehensive process mapping of the flow of product, information and finance provided complete clarity and transparency of total supply chains; from supplier, through the factory and outbound to customers. Integrating data sources to supply chains and visually modelling flows allowed the team to establish precisely where the issues lay and the opportunities to optimise.

Multiple problems were identified and fixed including data management errors, erroneous forecasting, breaks in cross-functional forecasting flows and, importantly backlogs of work-in-progress material that could be rapidly re-allocated to waiting customers and prioritised by profit margin.

Short term; rapidly ensuring customer orders were fulfilled enabled a rapid improvement in receivables alongside a margin improvement through profitability prioritisation. Whilst, more longer term fixes to forecasting, ordering and reporting process ensured an ongoing smoother and leaner management and monitoring.

 

Results

  • €1m improvement in working capital.
  • Rapid resolution of customer orders and improvement to OTIF
  • Lower inventory levels delivering payment holidays to suppliers
  • Process flow issues resolved, improving forecasting and ordering
  • Embedded monitoring and reporting
  • Establishment of cross functional MP&D team

 

Procura provide expert services to clients which can assist as the economic situation recovers and businesses re-set for profitability. We would be very happy to talk through your current challenges and objectives and share our experience.

For further information or to discuss how Procura could help your organisation – please get in touch:

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