Article: Benchmarking working capital management in the inter-organisational context Journal: International Journal of Business Innovation and Research (IJBIR) 2014 Vol.8 No.2 pp.119 - 136 Abstract: This paper benchmarks working capital management in the inter-organisational context by applying the financial value chain analysis method. The method extends the value chain analysis to industry level. Working capital management is studied in ICT, pulp and paper and automotive industries with the cash conversion cycle (CCC). The CCC of these industries is approximately 40, 60 and 70 days, respectively. The difference is mainly a consequence of the different cycle time of inventories. The 2008 financial crisis affected the working capital management of the industries similarly. Both the cycle time of accounts receivable and accounts payable increased between 2008 and 2009. Inside each industry, the CCC of the branches of the industry varies. The difference of the CCC between the branches that have the shortest and the longest CCC is six-fold in the ICT industry, two-fold in the pulp and paper industry and three-fold in the automotive industry. Inderscience Publishers - linking academia, business and industry through research

Title: Benchmarking working capital management in the inter-organisational context

Authors: Miia Pirttilä; Sari Viskari; Lotta Lind; Timo Kärri

Addresses: Department of Industrial Management, Lappeenranta University of Technology, P.O. Box 20, 53851 Lappeenranta, Finland ' Department of Industrial Management, Lappeenranta University of Technology, P.O. Box 20, 53851 Lappeenranta, Finland ' Department of Industrial Management, Lappeenranta University of Technology, P.O. Box 20, 53851 Lappeenranta, Finland ' Department of Industrial Management, Lappeenranta University of Technology, P.O. Box 20, 53851 Lappeenranta, Finland

Abstract: This paper benchmarks working capital management in the inter-organisational context by applying the financial value chain analysis method. The method extends the value chain analysis to industry level. Working capital management is studied in ICT, pulp and paper and automotive industries with the cash conversion cycle (CCC). The CCC of these industries is approximately 40, 60 and 70 days, respectively. The difference is mainly a consequence of the different cycle time of inventories. The 2008 financial crisis affected the working capital management of the industries similarly. Both the cycle time of accounts receivable and accounts payable increased between 2008 and 2009. Inside each industry, the CCC of the branches of the industry varies. The difference of the CCC between the branches that have the shortest and the longest CCC is six-fold in the ICT industry, two-fold in the pulp and paper industry and three-fold in the automotive industry.

Keywords: working capital management; cash conversion cycle; CCC; financial value chain; financial crisis; ICT industry; pulp and paper industry; automobile industry; inventory cycle time; automotive value chain.

DOI: 10.1504/IJBIR.2014.059529

International Journal of Business Innovation and Research, 2014 Vol.8 No.2, pp.119 - 136

Published online: 30 May 2014 *

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Title: Benchmarking working capital management in the inter-organisational context

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