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Unique Approach – What Makes Just One Different.

We differ from our competitors, in that we usually deploy just one experienced consultant per assignment.

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Case Studies:

Global Paper & Pulp Chemicals Company

Accounts Payable Improvement

Company – BU of a Leading Global Chemicals and Coatings Company

Project Description – Accounts Payable

Location – Europe

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Working Capital Issues

  • The DPO for the BU was 33 days.
  • The Business Unit’s biggest cost is energy and terms with their energy suppliers were 30 days net or less.
  • The buyers believed it was not possible to negotiate with energy suppliers.

JustOne Actions Undertaken

  • JustOne facilitated a workshop with the buyers covering payables methodology.
  • JustOne used Mental Model techniques to change the negative mind sets of the buyers.
  • The workshop included negotiation training and role play.

Results

  • They buying team enhanced terms with many of their suppliers.
  • They achieved success with energy suppliers increasing terms from 30 days net to 45 days end of month plus 4 days (averaging 64 days) an improvement of 34 days.
  • The DPO rose from 33 days to 45 days a 36% improvement releasing €32m in cash.

Comment

The key to achieving the improvement in DPO was the change in the Mental Models of the buyers. Once they believed it was possible to enhance terms with the energy suppliers they used the negotiation skills they had learned to achieve excellent results.


Shared Service Center


Company – Leading Global Communications Hardware Manufacturer

Project Description – Shared Service Centre Set Up

Location – Europe, China, Indonesia and Vietnam

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Working Capital Issues

  • The company were concerned that overdues would increase while migrating collection from countries to the new Shared Service Centers (SSCs).

JustOne Actions Undertaken

  • A short Discovery assignment was undertaken in Europe to identify potential benefits and key steps to deliver successful migration.
  • JustOne trained the SSC collectors on Leading Practice collections and credit management.
  • JustOne facilitate workshops in each country with the sales team and visiting key countries to ensure a smooth handover of responsibilities and local management buy in to the process.
  • Once the majority of European countries had passed their collection activities we undertook the same exercise in Beijing including country visits to China, Indonesia and Vietnam.
  • JustOne also worked with entities in Latin America to help overcome resistance to the migration of collection to Europe.

Results

Four months after the project overdues in Europe were down by 66%.


Global AR Reduction


Company – Leading Global Drip Irrigation Manufacturer

Project Description – Terms Reduction

Location – Global

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Working Capital Issues

  • The company had stretching growth targets but the AR balance was increasing faster than would be expected from the level of growth.
  • Overdues were high and customers were demanding longer payment terms to match the main competitors.
  • There was a widely held view amongst sales staff that customers of irrigation systems were not able to pay until they had sold their first irrigated crop. Hence long terms and late payment was tolerated.

JustOne Actions Undertaken

  • JustOne trained 7 Internal Consultants (ICs) in the technical, project management and change management aspects of the project.
  • JustOne implement the changes in Israel with the ICs observing.
  • The ICs implemented in the remaining countries with JustOne supporting each IC on their first implementation and providing remote support for the remaining countries.

Results

Between May 2013 and May 2015 the AR reductions were:

  • DSO reduced by 23%
  • BPDSO (an indication of payment terms) reduced by 15%

In addition to the cash released other benefits included:

  • An improved understanding of working capital and its importance to the company.
  • A much greater focus on overdues and its causes.
  • Improvement to the negotiation skills of sales people and a change of mind set regarding reducing terms with customers.
  • Consistent leading practice AR procedures and processes.
  • Improved monitoring of KPIs.

Order to Cash


Company – Leading Global Ceramic Manufacturer

Project Description – Receivables Improvement - Italy

Location – Italy plus European countries supplied from Italy

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Working Capital Issues

  • High and rising DSO with overdues at 68 days and weighted average terms at 130 days.
  • The Sales Organisation were convinced that a high DSO was inevitable. They believed that if they tried to get their customers to pay earlier it would result in customers moving to the competition. (mental model*)
  • (* Mental models are deeply held internal images of how the world works. – Peter Senge)

JustOne Actions Undertaken

  • Short Discovery Assignment identified opportunities relating to payment terms, billing. delays and overdues with a target AR reduction of 33%.
  • Two staff members were selected to act as Internal Consultants to be involved with. the ongoing project and to undertake sustainability measures.
  • JustOne’s practice manual, processes, tools and KPIs were adopted by the company.
  • Collection, credit management and customer services were trained and coached.
  • A workshop was held with the 11 Area Sales Managers to train them to be able to. work with their sales teams to reduce terms. The workshop achieved a change in the prevalent mental models and also improved negotiation skills.
  • JustOne supported the rollout sales workshops in four of the key Areas.

Benefits

  • Leading practice collection processes in place
  • Leading practice methodologies and procedures in place
  • Mental models regarding terms reduction changed
  • Sales staff enthused to go out an negotiate shorter terms with their customers
  • DSO reduced from 202 days to 130 days

Comment

  • The mental models observed with the sales people in this company are common. In every country we hear sales people say "What you are recommending will not work in our country; or in our sector; or with our customers".
  • We are convinced that these mental models need to be changed before progress can be made with the new ways of working.
We need to change what people think before we change what they do.

Testimonial

JustOne used techniques to change the negative mental models of the sales teams and improved their negotiation skills resulting in much lower terms. What we achieved with their help was nothing short of amazing. I wish I had known about JustOne before.

Portfolio Company Manager


Terms Reduction


Company – Leading Global Communications Hardware Manufacturer

Project Description – Terms Reduction

Location – Europe and Latin America

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Working Capital Issues

  • The company had improved its overdue situation (see case study…) so to improve the AR balance further they needed to reduce customer payment terms.
  • The sales force were reluctant to attempt to reduce terms with their customers believing that it would adversely affect sales and that they would have to negotiate away margin (mental models).

JustOne Actions Undertaken

  • JustOne trained, coached and supported a cross-functional O2C team of selected staff to independently facilitate local sales workshops throughout Europe and Latin America.
  • The O2C team were trained to identify negative mental models and use techniques to change the mental models before improving the negotiation skills of the sales teams.

Results

At this time the workshops were put on hold due to an acquisition, but here is an example of the scores from the account managers from a workshop lead by O2C team.

  • Overall Day 1 average score: 5.6/ 6
  • Overall Day 2 average score: 5.4/ 6
  • Overall Workshop average score: 5.4/ 6
  • Value Adding for Career Development average score: 5.6/ 6

These scores demonstrate not only that the content and methods used in the workshops were considered useful and relevant, but that the skills of the JustOne Consultancy are transferable to client staff, enabling them to effectively implement change.

Testimonial

JustOne not only gave them the capability of making the changes happen, they enthused our people to want to do it. Around the very close of our internal change agent workshop, one of the selected sales managers openly said: "This is the best training I have ever had. I cannot wait to get back to Argentina and start using this negotiation techniques".

Project Sponsor


Global Paper & Pulp Chemicals Company

Total Working capital

Company – BU of a Leading Global Chemicals and Coatings Company.

Project Description – Accounts Receivable, Inventory and Payables Improvement.

Location – Europe and Asia.

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Working Capital Issues

  • The Business Unit working capital represented 21% of sales.
  • The group set a target for all BUs for working capital was 12% within two years.
  • Previous attempts to reduce working capital had not been successful.

JustOne Actions Undertaken

  • Pilot Phase – Undertook a pilot project on a business within the BU with a global footprint.
  • Implementation – AR and AP in Europe, AR, AP and Inventory in Asia.
    • Four Internal Consultants (ICs) trained in Europe, and 5 in Asia.
    • Four Inventory Specialists (ISs) trained in Asia.
    • Pilots implemented in Sweden and Indonesia with ICs and ISs observing and taking part.
    • Global Rollout - ICs and ISs implementing the changes with support from JustOne.

Benefits

  • Leading practice collection processes in place
  • Leading practice methodologies and procedures in place
  • Mental models regarding terms reduction changed
  • Sales staff enthused to go out an negotiate shorter terms with their customers
  • The BU achieved their target of 12% working capital to sales – a 42% reduction

Comment

The 42% reduction was achieved even though the Americas and inventory in Europe were excluded from the project due to conflicting initiatives.

€90m working capital released in 20 months


Negotiation Support


Company – Business unit of a global chemical company

Project Description – Single entity reduction of Overall Working Capital OWC

Location – Business unit based in Sweden and their customer in Italy

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Working Capital Issues –

  • During segmentation exercise identified one customer who accounted for 50% of the total European over dues.
  • This customer has been the distributor for Italy since the company began and is the third biggest customer in Europe.
  • Despite repeated previous attempts to reduce over dues they still averaged 62 over due days for the 12 months up to the start of the project.

JustOne Actions Undertaken

  • Because of the critical and sensitive relationship with this customer JustOne were asked to coach the sales team through the delicate negotiation to get the over dues down.
  • Key information including the contract, historical payment details, customer service and previous meeting notes were gathered and reviewed.
  • A negotiation preparation workshop was held to review good negotiation practices with the account manager and European sales director, agree goals, agenda for negotiation meeting and their respective roles within the negotiation plan.
  • During the workshop the potential reasons and motivation for over dues, the likely style and objections to change that the customer would adopt, the balance of power in the relationship and possible sanctions that could be applied discussed and agreed.
  • A compelling reason for change was developed.
  • Once the negotiation plan was agreed it was role played with the JustOne consultant to test and refine approach and style.
  • The negotiation meeting was held with the customer and the JustOne consultant was introduced as a working capital expert but acted as coach and observer supporting the account manager and sales director with their negotiation.

Benefits

  • The negotiation team was successful in getting the customer to admit that his payment performance was unacceptable.
  • Immediate agreement to reduce overdue days by 32 days.
  • Agreement to reduce the final 30 days within 4 months.
  • Provided demonstration to the Sales Director and her team that a properly planned negotiation can deliver significant results even with challenging customers based in Southern Europe where late payment and long terms are the norm.
  • Improved and clearer relationship with customer.

Global AR Reduction


Company – Global Food Quality Chemical Manufacturer

Project Description – Working Capital Project with a focus on 3rd Party Accounts Receivable

Location – Global

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Working Capital Issues –

  • High AR in most countries
  • Overdues high in most countries
  • Long Payment terms in most countries
  • A wide spread belief that reducing terms with existing customers will lead to a loss in sales (metal model)

JustOne Actions Undertaken

  • Visited Holland, Brazil and USA and produced reports and targets for each
  • Trained 7 Internal Consultants (ICs)
  • Led a pilot facilitation in Chicago with all ICs in attendance
  • Supported the ICs who implementation the project during 2007 and 2008

Benefits

  • The ICs facilitated the change in all parts of the world
  • Common processes and procedures in place
  • Common leading practice methodologies adopted
  • Mental models regarding terms reduction changed
  • Accounts receivables were reduced by 28%
  • Reductions in Overdues and significant reduction in payment terms in some countries
financial bar graph

Client Qoute

Comment from the FD of the company: "Even in the current challenging economic climate we have maintained the gained improvement from the project"

CFO and Sponsor


Working Capital


Company – Global Animal Feed And Pet Food Manufacture

Project Description – Working Capital Project

Location – Hungary, Romania, Holland

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Working Capital Issues –

  • Operational Working Capital of €200m (10% of sales)
  • Highly competitive seasonal market, with significant over capacity

Implementation

  • 5 Internal Consultants (ICs) trained
  • 4 Inventory Specialists (ISs) trained
  • Rollout started June 09 with ICs and ISs implementing the change

Critical Success Factors

  • Strong committed Driving Team - sense of urgency and high priority
  • Good Internal Consultants
  • Stick to the formula

Result

€110m working capital released in 9 months


Terms Reduction


Company – Global Food Ingredients Company

Project Description – Enterprise wide receivables and payables reduction

Location – Head office based in Holland and their business unit in Chicago

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Working Capital Issues –

  • The standard terms for the business were 30 days and most customers had standard terms
  • Overdues were 10 days
  • Raw materials had risen significantly over the previous year and an average price increase of 10% was required
  • During the facilitation workshop for sales staff it was explained that in order to achieve the AR targets, payment terms with some large customers would need to be reduced
  • The reaction from the sales team was – “30 days is normal practice in the US, it is what our customers expect. It’s the terms our competition use. If we ask our customers to pay an extra 10% and pay earlier the customers will go to the competition”
  • Our consultant recognized that this attitude was a mental model* that would need to be changed before they would believe that a terms reduction was possible

(* Mental models are deeply held internal images of how the world works. – Peter Senge)

Actions undertaken

  • Our consultant ran an exercise involving the sales team during the workshop to explore how they would go about a reduction in terms if was essential to their company. (This exercise is known as “scenario planning”. It was a way of getting the sales staff to work together to find a workable approach in a risk fee environment. It is one of four techniques JustOne use for changing mental models)
  • To embed the change to their mental model an action was agreed for them to develop a full “terms reduction strategy” identifying each customer where terms reduction would be targeted
  • JustOne provided guidance on appropriate negotiation tactics

Benefits

  • Within 2 weeks of the workshop the payment terms with one of their largest customers were negotiated down from 30 days to 20 days together with a price increase of 10%

Comments

  • The mental models observed with the sales people in this company are common. In every country we hear sales people say “What you are recommending will not work in our country; or in our sector; or with our customers”
  • We are convinced that these mental models need to be changed before progress can be made with the new ways of working

We need to change what people think before we change what they do.


Terms Reduction


Company – Global Food Ingredients Company

Project Description – Enterprise wide receivables and payables reduction

Location – Head office based in Holland and their Japanese business unit

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Working Capital Issues –

  • Japanese business unit Days Sales Outstanding DSO was 55 days
  • The standard terms were 30 days and end of month overdue days were 7 days
  • The high DSO was caused by a few large customers had agreed terms of 150 days
  • Quote from sales manager “It would be an insult to the customer to even discuss payment terms and if we did we would lose sales”
  • Our consultant recognized that this attitude to these large customers was a deeply held mental model* that would be difficult to change

(* Mental models are deeply held internal images of how the world works. – Peter Senge)

Actions undertaken

  • Our consultant ran a “Scenario Planning” exercise with the sales team to explore what would happen if they had to reduce payment terms with their large customers to avoid their company going out of business. This process started to change the mental model
  • To embed the change to their mental model an action was agreed for them to develop a full “terms reduction strategy” identifying each customer where terms reduction would be targeted
  • Further negotiation training was under taken

Benefits

  • Within 4 months the terms with one of their largest customers were reduced from 150 days down to 60 days without price concessions
  • Within 6 months the business unit achieved their 2 year target with no loss of business

Comments

  • Changing terms with existing customers is one of the most difficult tasks in OWC improvement
  • To be successful the sales force must, not only, be committed to the change, they must also believe that it is possible without damaging the business
  • In every company we work, JustOne encounters the mental model “if we try to reduce terms we will lose sales and lose customers” Unless this model can be changed the necessary commitment and belief from the sales team will not be possible. We need to “change what people think before we try to change what they do”
  • In this case study the scenario planning technique was used. JustOne have developed three other techniques for changing mental models each one effective under different situations