Академический Документы
Профессиональный Документы
Культура Документы
transformation
Improving free cash flow
starts with enabling a
cash‑focused organization
Your organization’s cash focus:
• Increase free cash flow
• Strengthen the balance sheet
• Increase return on capital
• Improve operational effectiveness
• Increase shareholder value
Working
EBITDA CAPEX
Capital
Business Strategies
Mission
Prioritize resources
Improvement initiatives and capital
deployment should be prioritized by
their impact on the business objectives.
Competing priorities and trade‑offs
should be regularly reviewed using
a portfolio-based approach.
Examples of typical activities to focus on when seeking to improve drivers of free cash flow:
Rapidly turn profitable sales into cash Enable a flexible and efficient value Effectively reduce the economic cost
chain to meet internal and external of purchasing and deploy capital to
customer expectations directly impact strategy
• Measure and understand customer • Make use of technology and increase • Develop sufficient insight of
expectations and priorities collaboration to more effectively cost drivers to sustainably and
manage uncertain demand continuously reduce costs to serve
• Challenge pricing and discount
structures to capture the full value of • Balance the competing objectives of • Challenge the ‘as-is’ procurement and
products and services cost-to-serve and inventory levels sourcing strategies
• Evaluate customer profitability • Apply differentiated inventory • Directly align capital investment to
and apply differential product or management strategies to customers core business strategies rather than
service strategies and products traditional functional budgets
• Identify and eliminate revenue • Effectively manage the deployment • Determine optimized payment terms
leakages and lifecycle of the product portfolio for each supplier
• Prevent billing inaccuracies to reduce • Reduce risk through effective • Eliminate non-compliance to
inquiries and disputes monitoring procurement and payment policies
• Enforce customer contractual • Effectively partner with suppliers to • Establish efficient payment
agreements achieve cost and service targets systems that optimize timing and
transaction costs
• Effectively manage payment
deductions and short payments
1 2 3
Identify and define Design services, establish Deliver, track and
opportunities tracking and governance manage
• Benchmark financial and operational • Engage key business stakeholders • Support or manage overall plan
performance to recognized to gain buy-in
• Develop predictive analytics and
leading practices
• Develop solutions and prioritize for dashboards linked to Enterprise
• Perform data analytics and present risks versus benefits Resource Planning systems (ERP)
visual performance insight
• Design and agree implementation • Confirm effectiveness and
• Facilitate ideation workshop to create plan stabilization of re-engineered
fact base for change processes and systems
• Support rapid tactical opportunity
• Model potential improvements and implementation • Embed new benefits and targets into
business impact future roadmap for system, process,
• Develop process maps, revised
and people
policies and Standard Operating
Procedures (SOP)
• Develop targeted communication • Assist in governance and mediation • Commence the progress reporting
strategy of initiative owners and establish the stage gate
review rhythm
• Design change management plan • Educate employees with required
training and tools • Develop innovation and ideation
mechanisms for continuous
improvement
Tactical
changes
Baseline
About EY
EY is a global leader in assurance, tax, transaction and advisory
services. The insights and quality services we deliver help build
trust and confidence in the capital markets and in economies the
world over. We develop outstanding leaders who team to deliver
on our promises to all of our stakeholders. In so doing, we play a
critical role in building a better working world for our people, for
our clients and for our communities.
EY refers to the global organization, and may refer to one or
more, of the member firms of Ernst & Young Global Limited,
each of which is a separate legal entity. Ernst & Young Global
Limited, a UK company limited by guarantee, does not provide
services to clients.
For more information about our organization, please visit
ey.com/ca.
© 2016 Ernst & Young LLP. All Rights Reserved.
A member firm of Ernst & Young Global Limited.
1823415
ED None
This publication contains information in summary form, current as of the date of
publication, and is intended for general guidance only. It should not be regarded as
comprehensive or a substitute for professional advice. Before taking any particular
course of action, contact Ernst & Young or another professional advisor to discuss
these matters in the context of your particular circumstances. We accept no
responsibility for any loss or damage occasioned by your reliance on information
contained in this publication.
ey.com/ca
Contact
For a conversation about your cash flow
and working capital strategy, please
contact us:
Graeme Deans
Partner
graeme.deans@ca.ey.com
+1 416 943 2283
Tim MacDonald
Partner
tim.e.macdonald@ca.ey.com
+1 416 943 2033
Chris Stepanuik
Vice President
chris.stepanuik@ca.ey.com
+1 604 648 3610
Simon Rockcliffe
Senior Manager
simon.rockcliffe@ca.ey.com
+1 416 943 3958