Meeting expectation through working capital improvement

A leading provider of cable solutions, focusing on special and low voltage cables, was suffering from unbalanced customer and supplier terms, leading to a 20 day gap in working capital and high levels of inventories. There had been a disconnect between demand variability and planning of raw materials supply, of which the main component price (copper) had increased by 60% in the last 12 months.

REL conducted an extensive cash improvement program across the organization, training more than 300 employees on receivables, payables and inventory management best practices. A working capital policy was designed and implemented, alongside a management reporting tool, stock classification and vendor and customer segmentation. These activities resulted in a working capital reduction of €51 million within 9 months and a stock price increase of 20%.