Client case: ViaCon

Implemented cash culture and achieved 35% reduction in tied up capital

About ViaCon Group

ViaCon was founded in 1986 in Sweden and has approximately 800 employees in 19 countries throughout Europe. ViaCon is a leading provider in the European market with a focus on production and technical sales of flexible corrugated steel structures and plastic pipes used to build Bridges & Culverts, GeoTechnical- and StormWater Solutions. ViaCon offers innovative, competitive and sustainable solutions.

  • Industry: Infrastructure
  • Company size: 200 MEUR
  • Markets served: Europe, CIS and Middle East
  • Majority owner: FSN Capital

Service

  • Working Capital Management

Challenge – A pan-European Group in the need of financing a new Group-wide strategy focusing on strong profitable growth requiring major internal changes

In the spring of 2019, ViaCon was separated from the SafeRoad Group and by November the same year, the recently hired Group Executive Chairman, Stefan Nordström, was appointed as a new CEO. The company had struggled with stagnating performance in the past years, and the ambition to enter into a new growth phase was clear. With a new strategy, ViaCon needed to sustainably increase its capital efficiency and release cash for financing growth investments.

To ensure best practice in pursuing ViaCon’s many ambitious goals, they decided to engage Capacent and enroll in a working capital optimization program focusing on AP, AR and inventory. The target of the program was to reduce the operating working capital by 35% by the end of H1 2021.

“Improved capital efficiency requires better processes and routines to be sustainable, and for this you need someone from outside the company to look at operations with fresh eyes.”

Stefan Nordström, CEO ViaCon

What was done

The project aimed to identify and realize quick wins but at the same time have a long-term focus in order to reach sustainability at targeted working capital levels. The proposed approach was set to create awareness and understanding as well as establish a cash culture within the ViaCon Group. The work was divided into two phases:

Phase 1: Group wide assessment and pilots. The first phase consisted of a group wide assessment and pilots capturing all business areas and main working capital components. The pilot focused on the four largest countries in the group and an analytics center in Power BI was set up to follow the progress. During phase 1 an as-is analysis was done and future activities and potentials were set together with the organization to ensure local commitment and that the most relevant actions were prioritized.

Phase 2: Roll-out of working capital improvement. The implementation was initiated in the pilot countries and then rolled out throughout the group. The activities were carried out in close collaboration with the project members and involved people from all levels of the organization. The focus areas for each unit were tailored to their situation, the main activities included:

  • Identified and realized quick wins while also maintaining a long-term focus in order to reach sustainability at targeted working capital levels
  • Optimized processes and working capital management within AR and AP by implementing methods to improve the length of payment terms and collection process, both towards suppliers and customers. Harmonized quotation-to-invoice process established throughout the group
  • Set responsibilities for working capital management and conducted training sessions together with selected individuals within each unit to ensure local capabilities. Kept group perspective to ensure alignment and ownership when project ends
  • Implemented an inventory control model to support the day-to-day decisionmaking within purchasing and production
  • Specific activities for dealing with slow-moving and obsolete inventory (SLOB). Also implemented group best practice processes to avoid the occurrence of SLOB
  • Implemented a structured analytics setup to enable supplier and assortment harmonization
  • Monthly updates of the analytics center in Power BI to enable project participants and steering group to continuously follow up the process to identify and understand the effects of the activities

Analytics center in Power BI to track progress and make relevant data available for project participants

Analysis 1
”One of the greatest benefits from the OPWC-project is the increased organizational understanding of the importance of working capital management and why it is a prioritized area. Each employee’s dedication and hands-on contribution to reaching the targets and maintaining the results will increase the chances of sustainable effects.”
Stefan Nordström
CEO, ViaCon

Results

Through a new Group Organization based on three Business Units and a Group-wide Operations function consolidating all 9 production sites (vs the former model of 34 different fully independent operational legal entities in 18 countries), a working capital-focused culture was institutionalized. Through a new reporting system, individuals were empowered to take fact-based decisions by having access to relevant data available at all levels.

The activities conducted throughout the program have so far resulted in a cash release above target level and with the remaining activities, the ViaCon Group are well on the way of reaching the final cash release target for H1 2021.

Main results by April 2021

  • A cash culture established within ViaCon Group
  • Run rate cash release above target level and on track to reach the final target of 35% reduction in tied up capital by end of June 2021
  • Established responsibilities, processes and tools to enable sustainable results
  • The released capital allowed the ViaCon Group to acquire the German competitor and market leader Hamco making the ViaCon Group the European market leader for corrugated steel Bridges & Culverts. The acquisition is also an important part of ViaCon’s plan for further expansion into Western Europe.

Do you want to know more about how we can support your journey towards improving your working capital?

Erik Påhlson is Managing Director and Working Capital Lead at Capacent_x in Sweden. Book a meeting below to discuss how we can support your journey or request a free WCM benchmark analysis to compare yourself to your competitors. 

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