Glaston is an international glass technology company and a pioneer in glass processing techniques. Their markets are fragmented – the typical customer is a small private company that pays cash against delivery or using down payments. Glaston faced an economic downturn as many orders were canceled and few new were received. Glaston’s financial situation was substantially weakened, and cash flow and risk management became top priorities. We were brought in and launched the Gamma project, aimed at improving cash flow and reducing risk.
What was done
Gamma started with an analysis phase including workshops facilitated by us. Based on this analysis, workshop discussions and Capacent’s expertise in this area, the target was defined as reducing working capital per sales to 50%. The main deliverable was the gate model – a decision-making process that provided a framework for improved management throughout the entire project life cycle, from design to warranty and aftersales. It had a substantial impact on Glaston’s working capital and risk management.
Glaston’s working capital per sales has improved by 70% since the Gamma project was launched. The gate model has shortened the process from design to customer acceptance through faster and more fact-based decision-making.
Advance payments have increased dramatically, and past-due invoices have decreased by 41%. An additional result of the gate model is that orders no longer end up in the finished goods inventory, since they are delivered closer to the estimated delivery time. This has reduced capital tied up in the finished goods inventory by 75%.