Working Capital Improvement Case

The Problem

Inventory levels, receivables terms, and payables terms had each evolved independently over time, with no single view of how they interacted. Cash was tied up across all three at once, but no one process owner had visibility into the combined effect on the cash conversion cycle.

The Benchmark

Peer operations in the same industry and at a comparable scale run a meaningfully shorter cash conversion cycle by managing inventory, receivables, and payables as one connected system rather than three separate ones.

The Gap

The difference between the current cash conversion cycle and the benchmark cycle represented a specific, quantifiable amount of cash sitting idle in the business rather than available for use.

The Initiative

Rebalance inventory levels against actual demand variability, tighten receivables terms and collection discipline, and renegotiate payables terms where the business had headroom, treating all three as one working-capital initiative rather than separate projects.

The Plan

Quantify the cash impact of each lever individually, sequence the initiative starting with the lever offering the fastest, lowest-risk cash release, then move to the levers requiring longer negotiation or process change.

The Expected Result

A shorter cash conversion cycle and a defined amount of cash released back into the business, measured against the benchmark target set at the start of the initiative.

Measure and Stabilize

Cash conversion cycle and the underlying inventory, receivables, and payables metrics are tracked monthly to confirm the released cash stays released.