Chemical

20m € working capital improvement through standardisation

BUSINESS CONTEXT

  • Our customer strategy reiterated the need for cash, standard core processes and also the need for CI.
  • Procurement leadership team decided that payment terms were a high priority.
  • Fragmented processes.
  • Lack of credibility among suppliers.

CUSTOMER NEED

  • Define and build a performing procurement process that contributes cash by the end of 2014 through payment term standardisation and extension, whilst improving on-time payment behaviour to meet supplier commitments.

RESULTS

  • 20m € cash benefit.
  • A repeatable model of how to standardise and extend payment terms, improving contract compliance.
  • OTP KPI’s designed to drive further improvement.

CHANGES

  • Standardised and extended payment terms.
  • Measuring standardisation, compliance and OTP.
  • Improved payment term change implementation.
  • Standardised process to set PT’s and drive compliance.

R&G APPROACH

  • X-BU and X-Region program, working with international people.
  • Measure procurement performance.
  • Standardise process of setting payment terms.
  • Eliminate non-compliance.
  • Optimise on-time payment.

CLIENT TESTIMONIAL

“…I am very pleased with what we have achieved on cash delivery at the pilot sites. This demonstrates a tremendous working capital opportunity and with the appropriate rigour and vigour we can make a very positive contribution to our company cash position…”

Chief Procurement Officer