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Best Working Capital Management Solution Winner: Mondelēz International

Published: Jul 2014

Brigitta Keller of Citi, Mike Foye and Vivek Reddy of Mondelēz collecting the Award on behalf of Tom Jack

Photo of Brigitta Keller of Citi, Mike Foye and Vivek Reddy of Mondelēz collecting the Award on behalf of Tom Jack.


Mondelēz needed to bring transformational solutions to its Business Services Centre (EBSC). The primary goal was to release resources within the EBSC to focus on more value-adding tasks for the market organisations and to simplify its banking infrastructure. However, they faced duplications in process, complex bank set-ups using a wide variety of electronic banking (EB) platforms and associated payment formats and security controls. Their ‘One Bank’ project has delivered some impressive benefits.

Tom Jack

Assistant Treasurer

Mondelēz International

Mondelēz International is a US-based multinational confectionery, food and beverage conglomerate with brands such as Cadbury, Milka, Oreo and Ritz. The company prides itself on having the resources of a big global corporation alongside the speed and creativity of a start-up.

in partnership with

Citi

The challenge

To demonstrate the challenge it faced, prior to the project Mondelēz had 29 banking partners across 24 countries with almost 500 bank accounts. Because of this the company used 110 different file formats; worked with 25 banking platforms and interfaces and used 40 different payment methods; which all led to extremely low straight-through processing (STP) rates.

The solution

Mondelēz successfully implemented two major projects under the ‘OneBank’ (cash management) and ‘Global SCF’ (working capital, supply chain finance) working titles.

When designing the OneBank solution, the project team focused on three distinct goals.

  1. To bring simplicity, consistency and transparency into its banking operations through rationalising the number of accounts, systems and formats it used.

  2. Work with Citi across the entire region to provide cash management capabilities and full end-to end control.

  3. To design a corporate architecture which could be used as a foundational asset and replicated across other areas and functions.

The Global SCF project, on the other hand, helped the EBSC realise the importance of prioritising SCF supplier invoices and installed processes that ensured processing uplift. Across all regions the project aimed to wean users off non-system driven, portal and spreadsheet-managed approaches as well as any related proprietary e-banking or host-to-host connections. These would instead be replaced by an ERP-interfaced single-file format, and communication would take place over the SWIFT network.

Launched in the EU in 2013, the programme reached $600m before the end of the first year. It covers Mondelēz’ss entities and suppliers in local and foreign currencies.

Best practice and innovation

By collaborating with its infrastructure and communications/B2B teams, the company has managed to leverage its ERP systems and the data flows across regions to what it feels is a safe maximum. Mondelēz services its entire inbound and outbound SWIFT ISO XML messaging for global cash and working capital management through just two SWIFT addresses.

The company now has a stable, future-proof treasury and banking architecture with bank-agnostic connectivity (SwiftNet) and a single global file format (ISO XML V.3). Mondelēz is also one of the first companies to implement the truly bank agnostic ISO XML V.3 as a single global file format. “This greatly improves the flow-through of our payments across networks,” explains Tom Jack, Assistant Treasurer.

Furthermore, the solution was delivered during a period of immense business integration, which ultimately led to the demerger of Kraft Foods Inc., and the creation of Mondelēz, the largest business start-up in corporate history.

“Despite our status as the world’s pre-eminent manufacturer of snacks and our position as a global player, we are what we are as a result of significant heritage and old, long-established brands and culture. This has led us to pursue initiatives such as these that help us reduce complexity in our business,” concludes Jack.

Key Benefits

The ‘OneBank’ project led to a significant improvement in bank related KPIs, including:

  • Reduced clearing banks from 29 to one.

  • Increased STP payments from 0% to 95%.

  • Reduced file formats from 110 to two.

  • Reduced bank e-banking connections from 25 to one.

Similarly, the ‘Global SCF’ project delivered a number of impressive benefits:

  • The programme provided increased supply chain stability and supplier satisfaction whilst rolling out a new payments term extension initiative.

  • Working capital benefits began to accrue for Mondelēz and its suppliers from day one.

  • Leveraging the newly created, standardised architecture enabled the solution to be rolled-out within one year from the established European model across four additional regions, namely: EEMEA; North America; Asia Pacific and Latin America.

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