best practices for credit management international vs ... · receivables management collections...
TRANSCRIPT
Slide 1 - June 2011HeidelbergCement - Credit Management
Best Practices for Credit Management –International vs. GermanyHow has the SSC concept changed our Credit Manageme nt approach?
Slide 2 - June 2011HeidelbergCement - Credit Management
Agenda
� Overview of HeidelbergCement� SSC Landscape at HeidelbergCement� SSC Journey� Credit Management in a nutshell: global sizing, org anization and
IT tools� Development of the SSC Germany (HCS)� HCS customers� Credit Management at HCS
Slide 3 - June 2011HeidelbergCement - Credit Management
HeidelbergCement in the world
Cement & grinding plants
Aggregates
� No 1 in aggregates� No 3 in cement� No 3 in ready-mixed concrete
Slide 4 - June 2011HeidelbergCement - Credit Management
HeidelbergCement in figures
� 53,000 employees� Core business
– Aggregates– Cement– Downstream activities
� 2,530 locations in more than 40 countries – 566 production sites for sand, gravel and hard rock– 100 cement and grinding plants – 1,329 ready-mixed concrete plants– 96 asphalt plants
� Cement capacity 116 million tons� Aggregates reserves 19 billion tons� 11,762 Mio. € revenue in 2010
Slide 5 - June 2011HeidelbergCement - Credit Management
Overview of existing SSC’s in Europe
Slide 6 - June 2011HeidelbergCement - Credit Management
Overview of existing SSC’s in Asia
Slide 7 - June 2011HeidelbergCement - Credit Management
Overview of existing SSC’s in NAM (US + Canada)
Texas
One SSC per country with 1.356 SSC employees worldwide (status March 2011)
Slide 8 - June 2011HeidelbergCement - Credit Management
1. SSC Concept – background
Shared Services not generally endorsed by HC Group
- 2005 2006-2007
WIN projectEurope
Shared Services endorsed by HC Board
2008
Resulting Model
• Regional centers developed• Regional centers largely independentlymanaged
Resulting Model
• Group SSC team implemented• Role of BU & shared functions defined• Global leadership team
Slide 9 - June 2011HeidelbergCement - Credit Management
SSC PlanningSSC Planning
130 FTEs
� Process Improvement� SAS 70 Audit� Employee and Customer Satis-
faction Survey
� Staff Retention program
� Incentive system based on performance targets
40 FTEs
� Build infrastructure� Communicating SSC
approach� Staffing (Hire, deploy)� Training� Change Management &
Communication
0 FTE
� Baseline� Business Case� Process
definition� IT Landscape� SSC Set up� SSC Org.� Governance � KPIs� SLAs� Re-Charging� Migration Plan� Communication
2005 2006 (go live) 2007
HC SSC journey towards standardization I (Country A)
Building SSC team and transformationBuilding SSC team and transformation TransformationTransformation
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StabilizationStabilization
140 FTEs
� Migration to Group SAP system� Implementation of new
Consolidation software� Activity Based Mgmt.� Expand to end-to-end
process ownership
2008
HC SSC journey towards standardization II (Country A )
2009
Process improvements
Process improvements
130 FTEs
� Six Sigma� Continuous Improvement
Program� Merger� E-Invoicing
– Workflow (Basware)
115 FTEs
� Efficient working Capital management (DSO, DPO)� Systematic process
improvements for front office functions (sales – queries, purchasing – purchasing orders)� Fairly smooth transition to
new audit requirements (e.g. BilMoG)� Flexible headcount
adjustments according to market development� E-Invoicing
– Consolidator (Crossgate)
� Travel Management
Value creationValue creation
2010
Slide 11 - June 2011HeidelbergCement - Credit Management
1. SSC Concept
Standardization potential HighLow
Low
High
Shared ServicesCentral Line Functions
Importance of physical proximity
• Standard activities
• Optimization “like a factory”
• Focus: efficiency and service mentality
• Governing and know-how-driven activities
• Focus: Value creation through business excellence
HR pay roll
Accounting
Controlling
Purchasing
Marketing
Mgmt.
other Admin.
techn. Support
Comm.
Law &Tax
Reporting
HR linefunction
SSC scope
Not in SSC scope
Basic principle of HC concept: separation of standard activities from know-how driven activities in ONE location
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2. Making changes to retail customer
4. Making changes to business customer
1. Central accounting (year-to-date postings, perio d end closing)
1. Creating new retail customer
3. Creating new business
customer
1. Asset additions 2. Asset disposals 3. Reposting 4. Inventory taking 5. Period end closing
1. Credit rating2. Credit control 3. Credit collect
4. Litigation and disputes 5. Credit report
6. Related activities
1. Cost accounting2. issue ALEA
reporting3. Frangoreporting
4. External reporting 5. Other activities
Customer database
maintenance
Credit Control
General ledger
Asset accounting
3. Prepare
invoice (2)
1. Create delivery note
2. Complete delivery note
5. Filing delivery note and invoice4. Send invoice
1. Dunning letter 2. Issue order to pay/ collections
1. Importing billing data into financial accounting system 3. Managing incoming payments2. Handling of complaints (1)Receivables
management
Collections
Invoicing
Ord
er to
cas
h
1. Record order
2. Record incoming
goods
3. Record and filing invoices
4. Invoice verification
5. Accounting entries
6. Settle accounts
Accounts payable
Reporting
Performed in SSC Performed locallyPerformed in SSCPerformed in SSC Performed locallyPerformed locally(1) Process responsibility lies with SSC, handling in terms of content by local resources (2) Local for RMX, cement in SSC
Processes performed in SSC
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Credit Management Organization
�221 FTE in Credit Management�Centralized in country SSCs�North America with decentralized local offices, but with centralised credit management back office�In many Asian and African Countries sales on a pre-payment basis � no credit management function necessary
Benefits of Credit Management:�Mitigate bad debt expense �Lower DSO / Improve cash flow �Reduce past due A/R �Improve productivity �One credit limit per customer/country
Slide 14 - June 2011HeidelbergCement - Credit Management
IT Landscape
Credit Information via SAP
� Standardized choice of reports� Data packages in SAP� Text files can be visualized in
SAP
Credit Agency
Interface SAP
Europe
Credit Agency
Interface JDE/Oracle
North America
Credit rating Credit control Credit collect Litigation and disputes Credit report Related
activitiesCredit Mgmt.
processes
Centralized IT tools such as CMS-Link, Inkasso-Link and Get Paid as add-on to ERP system in place to automate and control a big part of the Credit Management process
Credit Information via JDE/Oracle
� Standardized choice of reports
� Data packages in JDE/Oracle� Text files can be visualized in
JDE/Oracle
Slide 15 - June 2011HeidelbergCement - Credit Management
Upload possibility for credit information into SAP
123
456
1. Duns number2. Date of last check3. Monitoring4. Payment index5. Rating6. Recommended
credit
Risk information is linked to customer
master data