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Created on 16.12.2019

How SBB is putting working capital management into action

With working capital management, the working capital is adjusted so that the optimum level of liquidity is always available. But where exactly in a company can funds that are unnecessarily tied-up be released? SBB took a close look. For its excellent analysis, the company received the Swiss WCM Award in 2017.

How do the best companies optimize their working capital? Every year, a Swiss WCM Award for outstanding performance in WCM is presented at the Swiss WCM Summit. In 2017, it went to Swiss Federal Railways. The company was rewarded for its excellent WCM analysis across all group-level units. Stefan Eggli, Head of Cash Management, and Simon Gfeller, Treasury Manager at SBB, talk about the challenges at the center of SBB’s WCM initiative. The interview was recorded at the Swiss WCM Summit 2017. 

Why did you apply for the Swiss WCM Award?

Stefan Eggli: We started the working capital management initiative at SBB in 2015. Our aim in applying for the award was to measure ourselves against other companies. 

And you won

Simon Gfeller: We're very pleased about that. The award not only shows that we are on the right track with the WCM efforts we have made in the past two years, but will also help us to continue to raise awareness of working capital management within the company. 

From analysis to implementation: what is the current state of working capital management at SBB?

Simon Gfeller: We are implementing the governance measures initiated so far, and are making use of the know-how developed in working capital management over the past two years to constantly improve the set KPIs and to comply with the defined WCM target values. 

Stefan Eggli: What’s also good is that we demonstrated the utility of WCM: there’s no longer any question as to why Swiss Federal Railways needs WCM. Today, the only thing to discuss is the further potential for optimization.

Which specific measures emerged from the comprehensive WCM analysis?

Simon Gfeller: We identified a large number of parameters that can be adjusted in order to optimize net current assets. Take cash flow logistics, for example: we established that a lot of idle money was tied up in the train stations. A forecasting tool has now been set up that allows managers to estimate future requirements and to top up the cash reserves accordingly. 

What have the greatest challenges been for SBB on the WCM journey so far?

Stefan Eggli: One major challenge was to establish initial transparency by examining every angle and identifying where cash is tied up – in all four of our divisions: Passenger, Freight, Infrastructure and Real Estate. Another important aspect was to incorporate divisional financial responsibilities. 

About the winners

Stefan Eggli, Head of Cash Management, and Simon Gfeller, Treasury Manager at SBB, talk about the concrete WCM measures arising from the WCM analysis.

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