Physical assets, inventory, and accounts receivable & payable are significant investments for the business to function. Freeing up internal working capital provides cash to grow and reduces needs for external financing. Too often, companies suffer from:
- Shortages of the “right” inventory, and an excess of the “wrong”
- Overcapacity and underutilized facilities – or unnecessary new investments in plant, property and equipment (PP&E) while existing capacities are not fully tapped
- Manufacturing capabilities that would require investments to bring them up to par with best-in-class producers
We identify the leverage points to drive a higher Return on Capital Employed (ROCE). We release cash tied up in the business by increasing inventory productivity, decreasing cash-to-cash cycle time, rationalizing PP&E through efficient site transfers or asset divestiture, and structurally reducing overhead or avoiding investments by outsourcing non-vital and non-competitive operations. We quantify the potential and help our clients apply the right levers to achieve sustainable working capital improvements.