Equipment Finance Strategy: Global Manufacturer
The Situation
A global multi divisional manufacturer with a network of market companies in each country believed there was an opportunity to enhance their equipment finance function. Equipment finance was done in many ways, involving a central function for some cross border deals, country platforms, 3rd party suppliers, market company on-balance sheet financing and a range of off balance sheet schemes. Their market spans the globe.
The Approach
We established a project team with a clear charter, involving representation from the central equipment finance function and the operating divisions. Analysis focused on process mapping, defining accountabilities, external benchmarking and focus interviews with staff from divisional head offices and market companies. The results were synthesised into a proposed strategy backed with a benefits case and implementation plan.
The Outcome
The strategy was agreed by both the corporate centre and the operating divisions. A trial was kicked off to transfer the first market company into a central equipment finance entity -this was driven by efficiency and risk management reasons. Centralised equipment finance on a larger scale with a clear strategic direction is now a strategic option for the future along with broadening centralised shared services. Customer service levels were improved, cost of finance minimised and the company's risk profile reduced.
A global multi divisional manufacturer with a network of market companies in each country believed there was an opportunity to enhance their equipment finance function. Equipment finance was done in many ways, involving a central function for some cross border deals, country platforms, 3rd party suppliers, market company on-balance sheet financing and a range of off balance sheet schemes. Their market spans the globe.
The Approach
We established a project team with a clear charter, involving representation from the central equipment finance function and the operating divisions. Analysis focused on process mapping, defining accountabilities, external benchmarking and focus interviews with staff from divisional head offices and market companies. The results were synthesised into a proposed strategy backed with a benefits case and implementation plan.
The Outcome
The strategy was agreed by both the corporate centre and the operating divisions. A trial was kicked off to transfer the first market company into a central equipment finance entity -this was driven by efficiency and risk management reasons. Centralised equipment finance on a larger scale with a clear strategic direction is now a strategic option for the future along with broadening centralised shared services. Customer service levels were improved, cost of finance minimised and the company's risk profile reduced.
