The Situation
Capital expenditure requests came from VPs with no analysis of return or impact on the broader business. AP and AR processes were entirely manual and paper-based, with documents routinely lost between departments. Safety stock was set without connection to actual demand, tying up millions in raw materials sitting on shelves. The finance function was reactive, processing transactions rather than driving operational decisions.
What CEI did
Introduced a CapEx ROI framework requiring every request to model savings (increased production, decreased labor, or decreased expense) with a defined payback period. Sub-18-month ROI projects were fast-tracked; longer-horizon requests were evaluated for strategic alignment.
Automated the full AP cycle from purchasing replenishment through PO creation to accounting, and streamlined AR processes. Eliminated paper-based routing that caused delays and lost documents.
Analyzed safety stock levels against actual consumption. Reduced stocking from 96 days to a 30-day target aligned with the sales pipeline, releasing cash trapped in excess inventory.
$3.5M
Cash Freed from Excess Inventory
7.5 FTEs
Redeployed from Manual Processes
18-Month
CapEx ROI Threshold Established
A proposed mixer upgrade with a 3-year payback was paused after analysis showed technology costs would
continue falling, making the investment more efficient later. The 7.5 headcounts freed from manual AP/AR were redeployed to productive roles rather than eliminated. The $3.5M cash injection from inventory optimization immediately eased cash flow pressure.
In Their Words
“We had $3.5 million sitting on shelves in raw materials we didn’t need for another 60 days. Nobody
had connected the dots between our stocking levels and our cash flow problems. Now our inventory
moves with our pipeline.”
— VP of Supply Chain | Confidential Client