Well-trimmed working capital is a never-ending key success factor for companies in almost all industries. After the recent years of cost reduction activities, we now see a renewed interest among companies in improving working capital. Among several reasons is the desire to use improved cash flow for investments in future growth.
In this context our client, a global telecom company, made a strategic decision to reduce working capital throughout their whole business with a program covering capital intensive operations on all continents. Local variations in processes, customers, suppliers etc. introduced additional complexity. Cupole was asked to assist in the reduction of working capital in two important markets in Africa.
We worked on site in the two markets, together with the local customer account teams, to establish an ‘as is’ working capital view of each account. This view included an analysis of the processes from customer order to received payment, identifying the working capital baseline. The team then developed ways to reduce capital tied-up throughout the whole value chain, from an order to delivery perspective as well as from an invoice to collection point of view. Several workshops were held on site, with the client’s local leadership teams, in which opportunities were validated and prioritized in a classical “ease of implementation” and “impact” exercise.
Several areas of working capital opportunities were confirmed as relevant for each account and thereafter detailed implementation plans with clear actions and owners were crafted by local teams, supported by Cupole Consulting Group, which made it easy for the client to implement the solutions.
Ten months after the working capital reduction project, operational working capital lead times on the analyzed customer account had decreased by 58%. The client used the case as an internal “best practice case” within the region in how to cut operational working capital lead times.
“Project recommendations led to a 58% reduction of operational working capital lead times for the telecom client in Africa”
