Manufacturing company: cash flow stabilization and regained control over deliveries

Context

Mid-size manufacturing company (special-purpose machines and subcontracting for automotive and industry), annual revenue in the tens of millions EUR. Recurring escalations from top customers, deadline pressure, overloaded team, reactive decisions, and deteriorating planning discipline. The bank requested an updated financial outlook.

Problem

• Cash flow under pressure — Days Sales Outstanding (DSO) climbed to 80+ days (from a historical average of 55), working capital cycle 110+ days, cash reserve below 15 days of operating costs
• Delivery delays — on-time delivery fell to 68%, late-delivery penalties became a material cost item
• Missing governance — no clear priorities, owners, reporting cadence, or escalation rules
• EBITDA margin dropped 6 p.p. over 2 quarters due to overtime and urgent supplier orders with a 15–25% markup

Financial diagnosis

A 72-hour triage and deployment of a 13-week rolling cash flow forecast (a tool the company lacked) revealed the following key points:

• 62% of the cash stress was caused by 3 specific customers with extended payment terms (60+ days)
• 5 suppliers accounted for 80% of urgent orders with a 15–25% markup
• 2 product groups had negative contribution margin after factoring in overtime
• Capital expenditure (CapEx) approvals were not synchronized with the current cash position — projects were approved without cash-constraint reflection

What we did

72-hour triage

• Rapid mapping of hot spots (cash, deliveries, backlog, capacity)
• Stabilization measures — stop-the-bleeding steps (halt of new orders from a loss-making customer, replacement of the 2 most expensive urgent-fee suppliers)
• Baseline governance setup (weekly cash review, daily delivery standup, escalation model)

10-day diagnosis

• Analysis of root causes and blockers (process, capacity, suppliers, decision-making)
• Identification of 12 quick wins (5 of which were implemented within 30 days)
• Design of 4 workstreams + owners + KPIs

30/60/90-day plan

• Concrete actions, milestones, accountabilities
• Weekly reporting (status, risks, decisions)
• Execution support and escalations through to a stable outcome

Steps from the financial analysis

• Renegotiation of payment terms with top 3 customers (in exchange for volume commitment) → DSO reduction
• Factoring bridge for 2 customers as a temporary stopgap → cash release without diluting the relationship
• Halt of new orders from the customer with the worst margin and payment behavior
• Supplier consolidation and framework agreements with 3 strategic suppliers → elimination of urgent-fee markups
• Temporary halt of 2 product items with negative contribution margin → freed production capacity for profitable products
• Capital expenditure (CapEx) freeze with an exception for projects with a payback under 12 months → protection of the cash position

Deliverables

• 72-hour triage report + stabilization plan
• Diagnostic report with root causes and prioritized actions
• 13-week rolling cash flow forecast (delivered as a living tool)
• Quick wins backlog + owners + deadlines
• 30/60/90-day plan + KPI set
• Governance cadence (weekly report template + escalation rules)

Impact

• Working capital released: low 7-figure EUR range
• Late-delivery penalties: decrease of 60–80%
• EBITDA margin: return to historical range within 2 quarters

Engagement model and investment framework

Our crisis management engagement combines three fee components:

• Fixed monthly retainer — covers our implementation capacity and continuous delivery during the 3–6 month intervention.
• Milestone fee — paid upon delivery of specific outputs: completion of the 72-hour triage, delivery of the diagnostic report, deployment of the 13-week rolling cash flow forecast, and governance cadence.
• Outcome success fee — tied to measurable impact: working capital released and improvement in cash position above the baseline agreed in the diagnosis.

Typical total client investment: low 6-figure EUR range (sum of the fixed retainer component + milestone fee over 3–6 months). Outcome success fee: priced separately, calculated as a % of working capital released above baseline. Payback: under 90 days from the cash delta (usually visible within the first 30–45 days).

Duration and form of cooperation

72-hour triage → 10-day diagnosis → 3–6 month implementation support with a weekly governance cadence. Gradual strategic exit (handover to the internal CFO or COO after stabilization).

Data is anonymized and generalized due to confidentiality. Outcomes in specific projects may vary depending on the starting situation, segment, and internal team cooperation.