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Ways Out Of The Working Capital Trap - ENG

Empowering Self-financing Growth Through Modern Supply Management
$1,100.00
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ISBN: 9783642172717
Formato: ePub
Idioma: Inglés
Editorial: Springer Nature
Tema: Negocios y economía
Subtema: Gestión de producción y Operaciones
Año de publicación: 2011-04-01

Especially in times of an economic boom following a crisis, companies have to deal with the phenomenon of the "working capital trap," which signifies a companys increasing need for financial liquidity in times of hindered access to debt capital, caused by the increasingly restrictive credit approval processes of financial institutions. As a consequence of cost savings, this situation is often reinforced by a low level of inventory. This book takes up the problem and shows ways of escaping the "trap" by identifying and strengthening in-house financing potential. First, different operating ratios will be introduced. These refer to the amount of capital committed to the flow of goods and to the amount of in-house financing possible. Subsequently, methods for consolidating in-house financing that are affected by procurement processes will be presented from the companys and the supply chains perspective. From a companys perspective, the methods for consolidating the amount of in-house financing over the following topics: The Management of Payment Terms, Inventory Management and Product Group and Supplier Management From the supply chains perspective, the following methods for extending the possible amount of in-house financing will be discussed: Finance-Oriented Supply Chain Sourcing, Supply Chain-Oriented Supplier Financing, Collaborative Cash-to-Cash Management, Collaborative Cash Pooling and Netting, Supply Chain Financing Platforms. The conceptual models will be clarified using a practical example from the automobile industry. Finally, the "Procurement Value Added" (PVA©) approach will be presented, a concept that measures the contribution of procurement to the companys success.

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