Title: Mapping working capital models in the automotive industry

Authors: Lotta Lind; Sari Monto; Timo Kärri

Addresses: ABB Oy, Hiomotie 13, P.O. Box 184, 00381 Helsinki, Finland ' Stora Enso Oyj, Kanavaranta 1, P.O. Box 309, 00101 Helsinki, Finland ' LUT University, Yliopistonkatu 34, P.O. Box 20, 53851 Lappeenranta, Finland

Abstract: This paper analyses working capital models applied by companies in the automotive industry. The paper contributes to the emerging research stream of financial supply chain management and provides support for improving inter-organisational working capital management. The data for the observation period 2006-2015 has been collected from the financial statements of 41 companies operating in the automotive value chain. The paper introduces a WCM matrix which can be used to identify and map working capital models in the value chains. The results showed that different working capital models are applied within the value chain stages, and two thirds of the companies reduced their working capital during the observation period. The WCM matrix positions the companies in the preferred context by their working capital management and shows how the working capital of companies is formed. The paper is based on an extensive set of real-life financial figures and offers new insights for studying working capital models in the value chains.

Keywords: working capital management; WCM; automotive industry; cash conversion cycle; CCC; financial supply chain management; working capital model.

DOI: 10.1504/IJISM.2019.103170

International Journal of Integrated Supply Management, 2019 Vol.12 No.4, pp.285 - 308

Received: 23 May 2018
Accepted: 01 Apr 2019

Published online: 21 Oct 2019 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article