Where Does Your Organization’s Working Capital Maturity Stand?

June 13, 2018

When trying to assess their current working capital performance and quantify room for improvement, too many companies rely mostly on comparative numbers. These are typically coming from industry peer group performance, benchmarking and/or internal operating companies’ performance comparison over time. This approach does indeed provide an initial quantitative insight of the range of benefits achievable from the three working capital improvement areas (C2C, S2S and F2F) but does not indicate where to start from, i.e. which sub-processes impacting working capital are the priority to address that will drive the largest quick wins and sustainable benefits.

To fill that gap, an organization needs to conduct a deep and insightful review and diagnostic of its working capital processes, end-to-end and across all BU’s and OpCos. This should include not only the operational processes but also the enabling technologies, people skills, KPIs and reporting, and last but not the least its working capital governance. Launching this process by setting up an internal dedicated task force can be time consuming and often lead to a decision postponed, as too many other projects are already running.

REL has developed an easy deployable solution which has been used successfully by many of our clients. The Working Capital Maturity Model we have created is a powerful and detailed self-assessment tool which enables large organizations – even highly decentralized ones – to conduct a rapid and very insightful diagnostic of their end-to-end processes, involving hundreds of people across multiple locations. The tool is accessible on-line to all employees, the working capital questionnaires are customized to each function and designed in a way that limits the subjectivity, i.e. own interpretation of performance achieved. The results provide a great insight of the areas of improvement, a fantastic internal “process” benchmark and a unique starting point to launch working capital improvement initiatives…