Authors: Lotta Lind; Sari Monto; Timo Kärri; Florian Schupp
Addresses: Lappeenranta University of Technology, P.O. Box 20, 53851 Lappeenranta, Finland ' Lappeenranta University of Technology, P.O. Box 20, 53851 Lappeenranta, Finland ' Lappeenranta University of Technology, P.O. Box 20, 53851 Lappeenranta, Finland ' Schaeffler Technologies AG & Co. KG, Industriestraße 1-3, 91074 Herzogenaurach, Germany
Abstract: A working capital model, consisting of the management of inventory, accounts receivable and accounts payable, is a part of the business model and can be a source of competitive advantage. This paper studies working capital models in the ICT industry from the supply chain perspective. The financial value chain analysis showed that companies within the same branch had remarkable differences in their working capital management. Some companies were even able to operate with a negative cycle time of working capital (CCC). The key to a negative CCC was a short cycle time of inventories, but the efficient management of payables was critical as well. With cluster analysis, four different working capital models (clusters) were indicated: long cycle companies, inventory holders, optimisers, and credit granters. Identifying different working capital models helps supply chain actors in optimising the working capital management of the chain to improve its competitiveness.
Keywords: working capital management; cash conversion cycle; CCC; working capital models; cluster analysis; financial value chain analysis; financial supply chains; inventory management; accounts receivable management; accounts payable management; ICT industry; information technology; information and communications technology; ICT supply chains; supply chain management; SCM.
International Journal of Supply Chain and Inventory Management, 2016 Vol.1 No.3, pp.233 - 249
Accepted: 14 Jul 2016
Published online: 20 Dec 2016 *