Where to Start when Management Gives the Working Capital Mandate

Trade Financing Matters, April 2017

There is no shortage of vendor posts and analyst writings on the topic of how to improve working capital.

It seems that everyone believes that is the CFO’s only job, pushing terms out to improve DPO, reducing DSO by coming up with better technology and receivable finance solutions, and magically reducing inventory on hand. It all sounds simple, collect faster, pay later and don’t hold so much inventory.

And yet you can’t do these initiatives in a vacuum.

I’ve had the pleasure over the years to get to know Doug Schoch, who has been instrumental in rolling out Siemen’s working capital initiatives in a multi-year and multi-divisional effort.

As Doug knows, working capital programs can create natural organizational conflicts across the financial supply chain. For example, how are you pushing DPO without pressuring the supply base and putting certain suppliers at risk?

Aligning payables, procurement and treasury KPIs sounds intuitive, but if procurement does not report to the chief financial officer (CFO), that’s a big challenge to start. And then we have lots of conflicts that come up across departments. For example, treasury is measured on working capital and procurement on cost and reliability. What does that mean for payment terms?

Join myself, Doug Schoch, VP of Siemens Capital; and Tom Dunn, CEO of Orbian on May 3 as we explore this subject and discuss how supply chain finance can be a tool to help manage conflicts.

It’s a great opportunity to participate with a company and understand some pitfalls, lessons learned, and success stories.

The original article can be found here. View the webinar slides here.

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