As one of the largest agricultural equipment manufacturers in the world, AGCO is under constant pressure to innovate. But funding innovation during a multi-year industry downturn was a challenge. The company needed to improve its working capital to increase R&D investments.
After evaluating numerous alternatives – including dynamic discounting and factoring – the company decided supply chain finance would be the most effective and flexible solution. Following a rapid program implementation, AGCO was able to extend supplier payment terms and accelerate cash flow, while offering suppliers access to low-cost capital and better visibility into payments.
Key takeaways and results include:
- Program implementation completed in just 60 days
- Generated nearly $30 million in working capital improvement in less than a year
- Standardized accounts payable terms and practices
- Funneled over $100 million in direct material spend through the program