Capital Portfolio Management

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Global Consumer Goods Company Transforms Capital Planning and Management to Control $1B Capital Project Portfolio

A major consumer goods manufacturer with a top 10 global food brands portfolio needed to focus strategic investments toward its most profitable products and markets. To operationalize its growth strategy in key regions, UMT applied Enterprise Portfolio Management capabilities to this Client’s CAPEX planning, forecasting, and tracking creating a solution which allowed them to improve margins through a focus on both profit enhancements and cost reductions.

Channeling capital spend effectively and efficiently is key to creating a competitive advantage in any manufacturing organization, including this Client. The Client was struggling to promptly allocate and phase out capital expenditures for the timely acquisition of new and the upgrade of existing physical assets supporting the manufacturing of key products in growth markets. Often, over 25% of the annual project budget was spent in the last quarter of the year. In many cases funding was left on the table unspent preventing many strategic projects and initiatives from being successfully executed and leading to lost profit opportunities and market opportunities explored. The annual CAPEX planning and budget aggregation of project capital data bottom-up from plant to regional to corporate level often took months of full-time work from Plant Engineers and Financial Controllers. Similarly, the month-end actual spend consolidation and comparison against forecasts was a lengthy process lasting over two weeks and was not able to effectively support the Client’s financial goals to maintain less than 10% forecast variance globally.