Best Cash Management Solution Winner: Dana Inc.

Published: Sep 2021


Photo of Michael Lenaerts, Senior Manager of Finance.

Michael Lenaerts

Senior Manager of Finance

Dana is a leader in the design and manufacture of highly efficient propulsion and energy-management solutions for all mobility markets across the globe. Based in Maumee, Ohio, USA, the company reported sales of US$7.1bn in 2020 with 38,000 associates in 33 countries across six continents.

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Smart pooling structure and embracing technology delivers global vision for Dana Inc.

The challenge

Dana was managing local liquidity via a single entity multi-currency notional pooling structure in Europe. However, while the structure was functioning smoothly, Dana was not able to fully unlock the value of their global liquidity due to a fragmented banking landscape and legacy platforms. Consolidation of balances from certain regions was executed manually, with limited visibility during operating business hours. This increased working capital costs due to local liquidity buffers and idle cash, leading treasury to seek a global liquidity structure ensuring full control and improved visibility.

The solution

Dana’s treasury department designed a multi-entity, multi-currency liquidity structure that could connect, access and centralise liquidity globally. This connected the company’s Asia Pacific and Americas pools with Europe. Leveraging their EMEA experience, Dana worked with the bank to increase the scope of the European pool, transforming it from a single entity to a multi-entity pool. The company expanded the number of countries and currencies to ensure optimal coverage yet maintained simplicity by only needing to monitor balances in one account to cover global operations. Dana will be able to capture more than 75% of its business flows in the pool.

“This solution was designed and implemented in a completely digital environment due to COVID-19-related disruptions, leveraging our bank’s latest technology capabilities,” explains Michael Lenaerts, Senior Manager of Finance.

The handling of significant documentation requirements digitally marks the first notional pool going live with e-signatures. The documentation execution took only a matter of a few days from issue to signing and was fully executed using an e-signing platform, expediting the implementation.

Best practice and innovation

The scale and complexity of this bespoke notional pooling solution with innovative, smart technology differentiates this structure as a great example of best practice. Dana achieved streamlined, centralised and automated liquidity, with full control on funding operations on a global technology platform.

The vision was implemented in three stages centred on simplicity, consistency, and sustainability.

Stage one – the existing pool was migrated from London to Luxembourg.

Stage two – in just six weeks the second stage focussed on building a strong pooling foundation and analysing currency mixes to determine the optimal solution to protect yield in a continuously negative trending rate environment.

Stage three – once the foundation was live, the focus was to take a country-by-country approach and connect local liquidity through physical cash concentration structures, covering APAC, North America and expanding in EMEA.

The multi-entity, multi-currency notional pooling structure was just the first step. To further support Dana’s need to monitor liquidity in real-time, the combined team leveraged APIs and built the network in days. The use of pre-configured templates also meant Dana had real-time visibility in excel without having to log into any portal. With this simple integration, Dana leveraged secure connectivity to monitor live balances and transactional reconciliation.

Key benefits

  • Improved liquidity.
  • Funding costs reduced.
  • Simple, fully automated structure.
  • Intra-day cash flow forecasting.

“In an uncertain environment where many maintained status quo operations, we embraced change and showed true industry leadership and resiliency – consistently working towards a global vision whilst embracing new technologies to ultimately create an enhanced liquidity structure that will serve our organisation well in the years to come. Once implementation is complete, we stand ready to consolidate our global liquidity, securing savings in capital costs and will only need to focus on the balance levels in a single account globally,” concludes Lenaerts.

The Adam Smith Awards is the industry benchmark for best practice and innovation in corporate treasury. The 2021 Awards attracted a record-breaking 309 nominations spanning 40 countries. To find out more please visit: https://treasurytoday.com/adam-smith-awards.

Frieder Haberecht

Executive Director
J.P. Morgan EMEA

Dana has done an incredible job in envisioning and bringing to fruition a liquidity structure which future-proofs its treasury set-up and secures cost savings. This is even more noteworthy considering the changes 2020 brought to the business and particularly to their industry. Impressive to see how treasury is supporting the overall corporate agenda.

It has been very exciting for us to help build out Dana’s existing pool in EMEA to the multi-entity, multi-currency liquidity structure in place today which spans across regions, countries and currencies to ensure maximum coverage and efficiency. Real-time visibility on MS Excel without having to log into any portal is the icing on the cake!

The entire global J.P. Morgan team involved is delighted to see Dana recognised with this award – congratulations Michael and team.

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