Ways Out of the Working Capital Trap: Empowering Self-Financing Growth Through Modern Supply Management (repost)

Posted By: interes
Ways Out of the Working Capital Trap: Empowering Self-Financing Growth Through Modern Supply Management (repost)

Ways Out of the Working Capital Trap: Empowering Self-Financing Growth Through Modern Supply Management by Erik Hofmann, Daniel Maucher, Sabrina Piesker and Philipp Richter
English | 2011 | ISBN: 3642172709 | 104 pages | PDF | 1,8 MB

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 company's 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 company's and the supply chain's perspective.

From a company's perspective, the methods for consolidating the amount of in-house financing over the following topics:

• The Management of Payment Terms

• Inventory Management

• Product Group and Supplier Management

From the supply chain's 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 company's success.