Get your Working-Capital Working!

 AFC Europe creates and delivers measurable value for manufacturing businesses. One of the most obvious and direct impacts is a reduction in cash tied up in non-productive working capital, effectively helping to ensure that your working capital is always working for you .

But, how do we do it?

Here, Steve Sanders, Vice President of Finance for AFC Europe explains how their team work tirelessly behind the scenes every day to make sure their customers have exactly what they need, when they need it and how AFC manages to operate a profitable business whilst saving its customers money.

“All businessowners and managers understand that cash is King. Excess working capital ties up cash that could otherwise be used to drive growth and if it is not directly contributing to generating revenue, then it is a burden to your business.”, comments Steve.

With years of experience in financial management, Steve is no stranger to the pressures of maintaining a positive cashflow. Since working for AFC Europe, this has become a two-way strategy, focusing on delivering value for customers by aiding their own cashflow whilst at the same time ensuring AFC itself has a strong and positive cashflow situation.

Vendor Managed Inventory is at the core of everything that AFC Europe does. Making this successful requires a great deal of skill, experience and effort, along with strong systems and access to a global network of high quality manufacturing partners. Taking the noise away from sourcing materials means leveraging close partnerships with key manufacturers and deploying strong global sourcing processes. As Steve points out, “enhancing or optimising working capital requires close control over the supply chain and reliable internal processes that provide key data, allowing close refinement of inventory levels.”

The internal processes of any supply chain partner need to be robust, but it is also the attitude and attention of people that makes the big difference. “Without our people, the processes and data have limitations. Even with the advent of artificial intelligence, we find that the skill, personal approach and experience of our people is what allows us to fine tune the inventory level for customers. Listening to our customers’ needs and understanding their business is a valuable part of making VMI work.”, continues Steve.

Positioning people at the heart of AFC Europe’s operations is not accidental. Creating close relationships with customers is key to being successful. All manufacturing businesses operate in a high paced and sometimes highly stressed environment, attempting to meet the changing demands of consumers and customers, whilst at the same time delivering acceptable returns for stakeholders. “It is critically important that our people listen to and understand these challenges and the only way to do this is to be in close contact.”, says Steve, “the intelligence that our people glean from day-to-day customer interaction is fed directly into fine tuning our systems to ensure they adapt to changing needs and always keep ahead of the game.”

Ensuring AFC Europe’s own financial performance is just as critical to ensuring its customers’ success. “It is important, not only to us and our own stakeholders, but also to our customers, that AFC isa successful, profitable and viable business.”, comments Steve, “Our customer relationships are not fleeting, they are long term and in most cases span decades not just years. It is therefore important for our customers to know that we’ll be around for the long-term to support their supply chain needs.”

Leveraging supply relationships, leveraging volumes across standard parts, optimising stockholdings and minimising freight costs are all factors in ensuring AFC can deliver sufficient value for its customers. “AFC is also highly effective at adding additional value for our customers”, says Steve. “By providing extra services, such as kitting, design support, manufacturing and fabrication of custom engineered products as well as global sourcing and vending, we can find ways to make our customers’ operations more efficient, saving them money and time and further optimising their working capital.”

In summary, Steve points out that the world of financial management is at the heart of AFC’s operational and customer success. “As is the case with most peoples’ individual responsibilities, financial control is often seen as a background function, but it is a vital part of how we create value in our own business, but more importantly for our customers”.