Working capital

What EY can do for you

EY can help mining and metals companies unlock working capital by benchmarking and understanding your working capital savings based on your historical performance, and that of your peers. Our working capital methodology combines multiple capabilities to identify scope and to unlock cash from across the balance sheet.

Organizations can unlock cash by looking in the following areas.

• Accounts payables — Eliminating early payments to suppliers, extending payment terms with uncontracted suppliers, negotiating extensions with contracted suppliers and optimizing payment runs
• Accounts receivables — Streamlining letters-of-credit processes, accelerating invoicing processes and strengthening collections processes
• Order management — Aligning shipments with customer terms so that longer trading-term orders are processed at the beginning of the month and letters-of-credit orders are scheduled for the end of the month
• Inventory — Aligning production with demand (pull vs. push), de-bottlenecking key constraints (e.g., ports and conveyors) and challenging planning parameters
• Spares and consumables — Pooling high-value spares across sites, introducing controls to centralize spares purchasing and lowering standard inventory levels by improving supplier performance
• Supply chain finance — Helping a sustained delay to payment of suppliers or one-off extensions at key dates of the year by using a variety of finance instruments and services

While many organizations have implemented some of these changes, reaching and sustaining industry best practice requires cultural change, balance sheet focus and incentives for key staff, and improved working capital analytics and reporting.

EY has led working capital improvement programs for global mining, metals and other asset-intensive businesses. Executing these projects involves data-driven process interventions and tactical controls, commercial engagement with suppliers and customers as well as a shift in supply chain strategy to balance working capital and operations costs.