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Working Capital - Fast Cash

NEEDS-BASED RESULTS

 

Working Capital - Fast Cash

SITUATION

Capital requirements were becoming increasingly important to this mining company to meet debt requirements and to improve economic results.

DRIVER GOAL

  • Secure immediate working capital benefits by capturing $50 million in cash from Accounts Payable within 14 weeks.

RESULT

  • Developed key performance indicators to monitor sustainability.
  • Improved DPO from 12 to 20 days.
  • Introduced sustainable processes that continue to improve DPO.
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Case Study

Improve Working Capital: Deliver Fast Cash

Issue

Capital requirements were becoming increasingly important to this mining company to meet debt requirements and to improve economic results during a recent economic downturn and related drop in commodity prices. Having experienced significant profitability in prior periods, the company needed to change a culture accustomed to significant revenue, large profits and corresponding positive cash flows. Management was challenged to quickly improve working capital by extracting cash from the supply chain. The Highland Group was enlisted to find “Fast Cash” working capital improvements. (Additional opportunities to improve working capital and reduce costs would be addressed in a subsequent phase of work.)

Highland Approach

A detailed analysis revealed the immediate changes that were needed in business practices and operating procedures. The first step involved changing a culture rooted in paying vendors early. Rapid and measurable financial results were realized through the implementation of new processes around the purchased order and payables functions, staff training and the development of a management dashboard with nine key performance indicators (KPIs) to ensure the sustainability of results.

Actions Taken

  • Partnered with client teams to implement a System For Managing Accounts Payable.
  • Improved processes for operating Accounts Payable and for monitoring and managing results.
  • Captured Accounts Payable “Fast Cash.”
  • Reduced carrying costs and transaction costs with increased application of early payment discounts.
  • Established Category Analysis processes in conjunction with Contract Management processes.
  • Established policies, procedures and metrics to manage contractors.

Released cash of

$50m

and implemented a System for Managing in AP in just 14 weeks

The Highland Group worked with us to capture cash quickly by implementing new processes which are ensuring sustainability of our improved cash position.

Chief Financial Officer

Related Information

subject matter-based

Project Director

Working Capital

Hamid has over 20 years of experience as a management consultant. He has a wealth of experience in process and operational improvements, corporate strategic planning, development and deployment, global sourcing, supply chain management as well as working capital improvement experience (A/R, A/P, Contract & Vendor Management, Inventory, MRO/Materials & Supplies).

Senior Consultant

Supply Chain

Laurence has more than twenty years of industry and consulting experience in all areas of supply chain management – including inventory management and procurement – and in Total Working Capital management.

Project Leader

Financial Services

North America

Brandon is a senior project leader and consultant with more than 12 years of experience in helping financial services firms maximize revenue and control costs through continuous improvement. He specializes in implementing efficiency, service and quality process enhancements in Fortune 500 companies by utilizing Lean and Six Sigma principles.

Senior Consultant

Working Capital

North America

Joe is an innovative and versatile professional with over 25 years of solid experience building, growing and operating diverse, multi-faceted and geographically dispersed global high-growth organizations. He has an exceptional track record of managing projects that deliver credible and sustainable improvements in cash management, operations, service quality and cost.