An international fruit trading group had set itself the goal of reducing logistics costs, better coordinating capacities and improving margins. To achieve this, the entire order to cash process (OTC process) was to be fundamentally revised.
The group sources its most important product mainly from Central America and the Caribbean. One of the plans was to reduce logistics costs for container transportation from America to Europe. This required efficient, coordinated capacity planning for the European countries, including Germany and Austria. The manager planned and supervised the major project for almost 3 years as a permanent employee of the Group. She reported to the Managing Director for Germany/Austria on a disciplinary basis and had functional responsibility to the VP Finance EMEA.
Complex requirements in the international organization and supply chain
One of the requirements was that customer satisfaction could not be jeopardized by the rationalization under any circumstances. However, the real challenge lay in the complex structure of all the partners involved in the supply chain. The company has a high degree of internationalization and outsourcing. The group's headquarters were located in the USA, while the European headquarters are in Switzerland. The authorized representative worked in the Netherlands, the Accounts Payable department in India and the Accounts Receivable department in Romania. There was also a joint venture with a group in France, which was responsible for other products and cooperated with the client.
Further complexity arose from the fact that both the group and a service company responsible for storage, completion (maturing) and sales in Germany agreed contracts for deliveries and services with the end customers.
Analysis of existing processes and identification of weaknesses
The manager first scrutinized the entire process, from planning and placing orders to handling complaints. The business processes in Germany and Austria were analyzed with the involvement of the European headquarters and in internal audits. However, the manager did not limit herself to the organizational and technical aspects.
In particular, she held numerous discussions with employees at all levels in Germany and Austria to get an idea of the general mood at the locations. It quickly became apparent that a major lack of communication, particularly in the German organization, was a key weakness. There was a lack of clarity in processes and responsibilities.
Internal and external communication structures decisively improved
The outdated organizational processes were not the only weak point. In particular, there was a lack of trust and transparency both internally and externally. To eliminate this weakness, the manager initiated a comprehensive reorganization of the internal and external communication structures.
First, the manager informed the Managing Director at the German location and then the employees in her department comprehensively about the planned measures. As old structures were to be broken up and new ways of working established, the project was initially not without controversy. The manager benefited from the fact that she identified important stakeholders and set priorities for communication. In this way, she was initially able to activate those in the team who were open to change. The comprehensive information provided also helped to overcome obstacles quickly.
The manager also systematically expanded contact with the service provider. She established regular meetings to discuss the progress of the project after the kick-off. She also introduced telephone conferences for stakeholders outside the German and Austrian organizations.
In order to get customers on board from the outset, the manager proactively approached important customers. This was partly done together with the service company. Customer acceptance of the new process proved to be very important for the implementation of the changes.
More transparency created through sales and marketing information systems
One of the weak points in the Group and among the partners was that the tools were often very outdated. For example, data reconciliation was carried out using numerous Excel spreadsheets. This led to high costs and low efficiency. These methods were also a source of errors. The manager replaced the outdated methods with advanced systems and tools that led to greater transparency and better planning and management of the business.
In order to ensure smooth and accurate planning, it was necessary to transfer the volume planning per customer to the European headquarters as accurately as possible. The manager therefore had a tool developed that provided valid figures based on previous years and aligned with the customer targets. This simplified the planning of the key account managers considerably.
In addition to volume planning, the manager worked with the team and in collaboration with the key account managers to develop a comprehensive presentation of profit and loss per customer. A well-founded P&L previously only existed at a higher level, not broken down by customer and also not comparable. The development of this tool also required coordination with the service company. The now trusting collaboration resulted in a comprehensive tool that can be used by all parties involved.
Optimized OTC process successfully introduced on schedule
The new sales and marketing information systems have made it possible to manage the business much better. In particular, the European headquarters in Switzerland now had a deeper insight into the details of the conditions per customer in the German and Austrian markets. This led to greater efficiency as part of the new OTC process. The control elements were mainly developed for the main product. The joint venture was managed with meaningful tools and systems from France.
The optimized OTC process was successfully introduced on the planned date and led to more planning accuracy, effectiveness and efficiency in the company, better communication and transparency regarding important key figures. The cooperation with the service provider was optimized and was subsequently characterized by more mutual trust, not least through the disclosure of figures, and more transparency.
The internal sales team in Austria was integrated into the German organization, resulting in synergies and cost savings.
The joint venture was later terminated in order to focus more on the main product. The company is now privately owned.
