Published: April 01, 2009
TRILUX was first founded by Wilhelm Lenze in 1912 in Menden in the Sauerland, Germany, developing gas and electric lighting. Although its initial lighting products were very simple, TRILUX developed a reputation for high quality, resulting in substantial growth and expansion to the product range throughout the 1930’s.
With sales and production units across the world, with multiple bank accounts and banking relationships, Trilux was finding it difficult to achieve clear visibility of the group's cash position.
The company’s manufacturing facilities were destroyed during WW2, and reconstruction started 1948 in Arnsberg with more sophisticated and powerful lighting solutions including lamps with threefold lumen output compared to traditional incandescent lamps, hence the name TRILUX, meaning threefold light. During the 1950’s, the company began to expand internationally with its first subsidiary in France, a trend which has developed ever since, with sales units in 14 European countries, distributors in the Middle East, Asia, Australia, the United States and 6 production sites in the Philippines, China, India and in different locations in Europe. Today TRILUX is a leading – No 1 in Germany and No 3 in Europe - international supplier of technical lighting solutions and electronic components for the lighting industry.
TRILUX maintains a treasury department of three people at its head office in Arnsberg, Germany. In addition, TRILUX Finance B.V., located in the Netherlands, functions as the group’s in-house bank and provides financing to the business units.
With sales and production units across the world, with multiple bank accounts and banking relationships, TRILUX was finding it difficult to achieve clear visibility of the group’s cash position. Cash flow forecasting was time consuming and often inaccurate as business units had to work out cash flow forecasts manually which they then sent to central treasury. As well as needing to develop more accurate cash flow forecasts, TRILUX wanted the ability to compare actual cash flows with forecast data in order to become more accurate in the future.
TRILUX already had a treasury management system in place, but it could not easily be rolled out to business units from a technical perspective and TRILUX had some concerns about the supplier’s commitment to developing the system in the future. Consequently, TRILUX decided to implement a new system to supplement its existing treasury management system and potentially replace it in the future. The new system had to be accessed easily from business units globally and support TRILUX’s cash and liquidity management needs. Furthermore, as treasury already had a system in place, TRILUX wanted to limit the investment required for a new system. [[[PAGE]]]
TRILUX has worked with Commerzbank as one of our primary relationship banks for a number of years, in addition to a few local banks to support our global business. In 2006, our Commerzbank relationship manager introduced us to Commerzbank’s TREASURY solution, which we recognised was likely to provide us with the cash visibility and forecasting tools we were seeking.
There has been considerable value to the business in having a more accurate cash position and we can also use our actual/forecast comparison to refine this further over time.
TREASURY is a web-based system, so business unit users can access the system using a web browser without the need for additional hardware or locally installed software. Furthermore, the solution is hosted by Commerzbank, so we do not have to maintain the software ourselves or invest in any additional hardware. As the software is provided on a rental basis, TRILUX also did not need to make a large upfront investment. While it took a while to get used to a solution hosted by a third party, overall it has been the right decision.
TRILUX implemented TREASURY in around 3 months. The first task was to populate the database with the necessary static data, such as bank accounts, and load the existing transactions into the system. We started using it for our central liquidity planning, and then embarked on a training programme with our business unit users, firstly in Europe and then in Asia. We did this through a 2 day training course, with a later follow up session, to which we invited all the users in the region. This allowed people to discuss how to gain the best value from the system and to share experiences. This approach proved an important step in ensuring support for the new system amongst TRILUX business units. Once people realised it was much quicker and easier to create reliable data and that they could analyse this data for their own purposes, such as comparing actual with forecast cash flows, there was a great deal of support.
Today TRILUX uses TREASURY to support a range of business requirements, including deal capture, settlement and cash management, monthly forecasting and the transfer of cash between their bank accounts held in any of their German banks. We are also testing the system to assess its FX and interest rate management capabilities. We have achieved most of the objectives we set out, and now have daily transparency over our group cash position and better knowledge of our group cash flow dynamics. There has been considerable value to the business in having a more accurate cash position and we can also use our actual/forecast comparison to refine this further over time.
In the future, we are looking to expand our payments capability so that we can use our central systems infrastructure for making payments across the group. Currently, we use a variety of methods, including Multicash for some banks, and direct communication with the banks in other cases. Once we have achieved this, we could then contemplate implementing a payment factory where payments on behalf of the group are initiated centrally.
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