How a Manufacturing Group Rebuilt Its Finance Engine and Freed Cash for Growth

A large heavy manufacturing group in Central Europe was facing eroding margins, rising energy prices, and increasingly complex reporting demands from investors. The finance function was overloaded with manual work, and management decisions were often based on delayed or incomplete data. In this context, the board decided that a comprehensive financial transformation and cost optimization initiative was needed to restore control and unlock cash. Radner’s team was invited to design and execute this change across the entire industrial group. The mandate covered group finance, plant controlling, procurement finance, and working capital management.

At the outset, Radner’s team conducted a structured diagnostic across five plants and the group headquarters. The diagnostic combined interviews, data analysis, and process walkthroughs to map how information flowed from production lines to the board. It quickly became clear that the company was running more than 40 different reporting templates, many of them in spreadsheets, with inconsistent definitions of margin and cost categories. This fragmentation made it impossible to compare performance between plants in a reliable way. The first insight was that standardization of core definitions and processes would be a prerequisite for any deeper optimization.

During the diagnostic, Radner’s team also identified significant hidden costs in the way the finance function operated. Controllers spent up to 60% of their time reconciling data between systems, while plant managers complained that they received reports too late to act. Budgeting cycles lasted four months and required hundreds of manual adjustments. At the same time, the treasury team had limited visibility into inventory and receivables, which led to unnecessary short-term borrowing. These findings shaped the design of a multi-wave transformation roadmap, balancing quick wins with structural changes.

The roadmap started with a clear definition of target outcomes: improved EBITDA margin, reduced working capital, and a leaner, more analytical finance function. Radner’s team worked with the CFO to translate these goals into measurable KPIs for each finance sub-team. For example, the controlling function received targets for cycle time reduction and forecast accuracy, while accounts receivable was measured on days sales outstanding and dispute resolution time. By linking the transformation to concrete metrics, the company created a shared language for progress. This approach also helped secure buy-in from plant directors, who saw how better finance processes could support their operational goals.

In the first wave, Radner’s team focused on simplifying and standardizing core finance processes. The team redesigned the monthly closing process, eliminating redundant reconciliations and introducing a single group chart of accounts. A central reporting calendar was implemented, with clear ownership for each step and automated reminders. The team also introduced a standardized margin bridge, allowing management to see the impact of volume, price, mix, and cost on profitability. This alone reduced the monthly closing time by five days within three months. Controllers could finally spend more time analyzing variances instead of chasing numbers.

Parallel to process standardization, Radner’s team addressed the fragmented reporting landscape. All plants migrated to a unified reporting platform, with pre-defined dashboards for production, sales, and finance. The team designed a set of standard performance dashboards that visualized key metrics in a consistent way across locations. This standardization did not eliminate local specifics but created a common backbone for group-wide analysis. Plant managers quickly adopted the new dashboards, as they could now compare their performance with peers in real time. The board gained a consolidated view of profitability by product line and customer segment.

Once the reporting foundation was in place, the focus shifted to cost optimization. Radner’s team analyzed the full cost base, separating structural costs from variable and semi-variable components. The analysis revealed that maintenance and indirect labor had grown faster than production volumes over the previous three years. It also showed that some plants were overstocking critical components due to fear of supply disruptions. By combining financial data with operational insights, the team identified several levers for sustainable cost reduction. These levers were then prioritized based on impact and ease of implementation.

One of the most impactful initiatives involved redesigning the budgeting and forecasting process. Instead of an annual, bottom-up budget that quickly became obsolete, the company moved to a rolling forecast model. Radner’s team introduced driver-based planning, linking financial projections to operational drivers such as machine hours, scrap rates, and overtime. This allowed the company to simulate different demand scenarios and adjust production plans accordingly. The new process reduced the budgeting cycle from four months to six weeks. It also improved forecast accuracy, which in turn enabled more precise capacity planning.

Working capital optimization was another critical pillar of the transformation. Radner’s team mapped the end-to-end order-to-cash and procure-to-pay processes, identifying bottlenecks and policy gaps. The analysis showed that payment terms varied widely between customers and suppliers, often without a clear rationale. Inventory policies were inconsistent, with some plants holding more than 90 days of stock for slow-moving items. By introducing standardized credit policies, renegotiating payment terms, and implementing inventory segmentation, the company freed up significant cash. Within nine months, days sales outstanding decreased by seven days, and inventory days on hand fell by 15%.

To ensure that cost optimization did not undermine quality or safety, Radner’s team worked closely with operations and quality management. Each cost initiative was evaluated not only on financial impact but also on operational risk. For example, maintenance cost reductions were achieved through better planning and predictive maintenance rather than simple budget cuts. Indirect labor efficiencies came from role consolidation and automation of routine tasks, not from across-the-board headcount reductions. This balanced approach helped maintain trust between finance and operations. It also ensured that the transformation supported long-term competitiveness.

Technology enablement played a key role in sustaining the new ways of working. Radner’s team helped the company implement workflow tools for approvals, automated reconciliations, and exception-based monitoring. A central data model was created to ensure that all reports drew from a single source of truth. The team also introduced basic process automation in finance for tasks such as invoice matching and bank reconciliations. These automations reduced manual errors and freed up capacity for analysis. Over time, the finance team began to see technology as an enabler rather than a threat.

Change management was embedded throughout the project rather than treated as a separate workstream. Radner’s team facilitated workshops with plant controllers, finance managers, and operational leaders to co-design new processes. Training sessions focused not only on tools but also on analytical skills and business partnering. The CFO sponsored a new role profile for controllers, emphasizing their responsibility as advisors to the business. This cultural shift took time but gradually changed how finance interacted with other functions. Controllers started to participate in production meetings and commercial reviews, bringing data-driven insights to the table.

As the transformation progressed, the company began to see tangible financial results. EBITDA margin improved by 2.3 percentage points within the first year, driven by both cost savings and better pricing decisions. Working capital reduction released enough cash to fund a critical modernization of one of the plants without additional borrowing. The board gained confidence in the reliability of financial forecasts, which supported more ambitious strategic planning. Investors responded positively to the improved transparency and discipline, reflected in a higher valuation multiple. These outcomes reinforced the value of the transformation and motivated further improvements.

Beyond the numbers, the company experienced a qualitative shift in how decisions were made. Management meetings moved away from debating data accuracy toward discussing scenarios and trade-offs. Plant managers used the new dashboards to run weekly performance huddles with their teams. The finance function became a respected partner in shaping production strategy, pricing, and investment priorities. This new dynamic reduced internal friction and accelerated decision-making. The organization as a whole became more agile in responding to market changes.

One notable effect of the transformation was the improved resilience of the business during a subsequent downturn in demand. Thanks to the rolling forecast and driver-based planning, the company was able to adjust production and cost levels quickly. Inventory did not balloon as it had in previous cycles, and cash remained under control. The standardized reporting allowed early detection of margin pressure in specific product lines, prompting targeted actions. As competitors struggled with delayed responses, this manufacturer maintained profitability and protected key customer relationships. The earlier investment in finance capabilities proved to be a strategic asset.

In the final phase of the engagement, Radner’s team helped institutionalize continuous improvement within the finance function. A small internal team was trained to maintain and enhance the reporting platform, refine planning models, and identify new automation opportunities. Governance structures were set up to regularly review finance processes and performance against KPIs. The CFO established a quarterly finance innovation forum to share best practices across plants. These mechanisms ensured that the transformation would not be a one-off project but an ongoing journey. The company positioned its finance function as a driver of operational excellence.

For this industrial group, the combination of financial transformation and cost optimization delivered more than just short-term savings. It created a coherent, data-driven management system that aligned plants, functions, and the board around common goals. It also elevated the role of finance from scorekeeper to strategic partner. The ability to link operational drivers to financial outcomes became a competitive advantage in a volatile market. Over time, this integrated approach to performance management supported both margin improvement and sustainable growth. The experience demonstrated how a well-executed transformation can reshape the financial backbone of a manufacturing business.