The challenge

UltraTech’s treasury team is always looking to enhance cross-company business opportunities through excellent treasury operations. The team identified opportunities that can generate higher sales, better operational efficiencies, and a financially healthy supply chain ecosystem, all while enhancing cash flow efficiency and overall return on investments.

These initiatives to drive drastic improvements were challenged by common foundational inefficiencies, such as the lack of streamlined organisation-wide processes, critical data needed for decision-making and unified digital capabilities to enable scale and quality.

The solution

The team identified three initiatives that can uniquely add immense value and solve core foundational challenges to enable richer outcomes.

1. Supply chain financing – a financially healthy supply chain is critical to UltraTech’s own success. With an aim to provide easy access to working capital to the company’s supply chain, the treasury team strategised and enabled a fully digital early payment programme in partnership with C2FO. Enabling this fully digital platform and bringing in global best practices allows a successful programme that deploys cash more efficiently while earning higher returns.

2. Receivable financing initiative – while traditional receivable financing programmes are initiated by the anchor buyer, UltraTech took the initiative of reaching out to its banks to set-up factoring lines for over 20 of its key customers.

   Having early access to receivables allowed the company to rotate funds faster and moving the credit to the bank enabled UltraTech to go over and above its business threshold limit with these customers. UltraTech increased share of business for a customer from 20% to 90% and with this initiative in the last year, the total revenue impact is approximately US$300m.

3. Importer financing – this initiative focused on releasing cash from working capital. Few large import suppliers were on immediate payment terms. These were renegotiated for longer payment terms with a letter of credit that can be discounted if required. This helped to facilitate a win-win situation for both UltraTech and the import suppliers while releasing US$300m of cash in working capital.

Best practice and innovation

UltraTech’s focus on moving to a digital experience for both internal and external stakeholders led to drastic process improvements and a reduction of resource costs, with tangible and intangible benefits.

The use of touchless automation has led to the automation of invoice matching and posting of 25% of invoice volume. Touchless automation has also digitised the supplier conversation with teams, thus reducing call queries and improving accessibility. Single window digital portals for suppliers have enhanced the supplier experience while reducing manual paperwork. All documents such as POs, invoices and payment advice are transmitted through these apps.

An online portal for dealers digitises communication and dealers now confirm the receipt of their orders through the app, which gets fed into UltraTech’s system.

Key benefits

• Cost savings.

• Process efficiencies.

• Return on investment (ROI).

• Increased automation.

• Risk mitigated.

• Errors reduced.

• Number of banking partners/bank accounts reduced.

• Manual intervention reduced.

• Improved key performance indicator (KPI) metrics.

Supplier testimony – Suraj Logistix Pvt Ltd:

“UltraTech’s Early Pay programme proved invaluable during the last few years of uncertain business environment which disrupted our cash flow. By requesting early payment through the C2FO platform, we bridged the gap between pending invoices and pressing financial needs. This experience solidified our trust in UltraTech Cement’s support for its suppliers’ well-being, making the Early Pay programme a true game-changer for us.”