Six Quick Working Capital Wins
At the Working Capital Management Forum 2008 in London, SSON convened a roundtable debate on the impact of the credit crunch, and ways organizations can limit that impact. This extract from the end of the debate includes one suggestion from each of the participants for quick wins – simple steps companies can take to protect themselves from the worst effects of the economic downturn.
Gavin Jones, Ahold Finance Group: Build a good, strong cash-flow forecasting culture and approach, so that you can identify early the periods when you need cash and have that dialogue with either your customer, your own supplier base, or your bankers, to get you through that period of cash-negativity.
Brian Shanahan, REL: Fix basic processes sustainably, so that even though you might be in trouble now and you might have to weather the storm for the next few months, you make sure that you’re in a state of financial health to take advantage when the market comes back up again – because it will, strongly.
Q&a: Mike Colicchio, Celanese Hungary
SSON: In this current economic downturn it’s very important to keep robust lines of communication open throughout the business. Can you tell us a little about the steps you’ve taken at Celanese to enforce this?
Mike Colicchio: Of course. We’re carefully monitoring our overdues and looking for any signs of softness in our very structured collection process. I stay in close contact with our sales directors in the EU and we strategically determine proper collection protocol in these challenging times. Being a relatively new SSO our recent hires have received exceptional training and job-shadowing; however, being rookies they’re not as well-versed on the qualities of different types of customers. They also need to understand the histories of our customers, and even when the customer is also a vendor. This is sometimes a point of interest. I bring the sales directors to Budapest for a “learn the customer” day. To serve our customers we must understand their customers. This gives the sales organization leaders and the credit and collection staff an opportunity to set expectations and parameters, but most importantly it opens up even more the communication channels, which is tantamount to success today.