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Cash flow optimization in the thyssenkrupp Group

Cash flow relevance in the thyssenkrupp Group – project background

Strong cash flow is one of the clearly defined targets for thyssenkrupp’s Strategic Way Forward. Cash flow is highly relevant to the capital markets and is closely observed by financial analysts. So improving the cash flow situation is a key focus of the Group in order to enhance its performance long term. In our project in one of the Group’s business areas, we worked to improve cash flow by optimizing net working capital. For this, based on our client’s business model, we concentrated mainly on optimizing accounts receivable and payable.

Our working method: developing measures through global collaboration

With a team of four consultants we worked closely together with the business area’s headquarters in Essen and two other major sites in Germany at which we developed measures to improve cash flow with the help of data analytics. We also defined global measures in close collaboration with the CFOs of each region – so that overall by sharing industry-specific best practices we developed various measures with considerable potential on six continents. Through regular dialogue with TKMC’s own net working capital competence group, we were able to use the collective knowledge of our in-house consultants on this key issue for our project. TKMC provided support for a total of seven months – after analyzing the data and developing measures, we also helped with the implementation of some of the most important measures and with setting up a digital tracking tool in which project staff can monitor implementation results in real time.

Our focus: complete support from data analytics to culture change

To identify opportunities for improvement, we conducted interviews with various experts and carried out targeted data analyses. We then used these results to develop concrete measures to optimize cash flow. As well as creating measures with short-term impact on cash flow, we concentrated on structural process improvements for a sustainable effect. With our support these measures were then embedded in the various Group companies around the world – our job here was to check which measures might be relevant in a specific region or for a specific business model and on this basis develop concrete measures with the Group companies to improve their cash flow. Conference calls with staff around the world to keep them updated on project progress, enabled us to ensure the successful and uniform development of the project. To guarantee the long-term success of the project, a change in the organization’s cash-flow awareness was needed – for this we developed a workshop model to ingrain the relevance of cash flow in people’s daily work.

What we learned: together we can make a big difference in the Group

The success of our consulting project showed that by working together with our clients we can make a big difference in the Group. Even seemingly small tweaks and improvements can add up to a significant contribution to performance optimization. In our project an understanding of the business and the net working capital expertise of TKMC as in-house consultancy were keys to delivering maximum value for our clients.