Mining the linkages between working capital and supply chain
In a time of tightening credit, when the importance of working capital has been amplified, performance has stagnated. Many companies now find themselves searching for opportunities to improve working capital performance and increase cash flow˗˗with the widening gap in performance between the leaders and the laggards. While focusing on supply chain for working capital improvements, business leaders have questions in terms of “how it will help” and “by how much” to build the right capabilities. Before setting up a working capital initiative they ask questions to understand realistic expectation for value generation, how much can be delivered back to the organization, effort required, focus area, priorities and levers that will produce the greatest results.
Deloitte Consulting LLP in conjunction with Deloitte’s Global Benchmarking group surveyed 20 major consumer products companies to determine the impact of supply chain capabilities on working capital. This in-depth study examined the financial and operational metrics and capabilities that are driving working capital performance. The focus areas of the study include:
- A subset of operational metrics that influences working capital performance and customer service levels
- The metrics and related capabilities that have a significant impact on working capital
- Indicators of leading performance in the context of these metrics
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