What is the right cash conversion cycle for your supply chain?

Große-Ruyken, Pan Theo; Wagner, Stephan M.; Jönke, Ruben

doi:10.1504/ijsom.2011.041987

Cited by 58 publications

(16 citation statements)

References 31 publications

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“…In another study, Kieschnick et al (2013) argued that lower working capital levels reduce the chances of firm bankruptcy. The general idea in most of these studies is that, by delaying payables (to suppliers) or aggressively following up on receivables (from buyers), firms can transfer their capital costs and credit risks to other supply chain members (Grosse-Ruyken et al, 2011;Hofmann & Kotzab, 2010).…”

Section: Working Capital Management and Firm Performancementioning

confidence: 99%

“…Therefore, a reasonable starting assumption for our hypotheses is that firms following aggressive working capital policies have a higher potential to perform well. But whether this potential will be realized might depend on a host of factors, such as a firm's business model; its specific supply chain configuration; and its supply chain risk exposure, making it hard to find the optimal level of working capital that maximizes performance (e.g., Grosse-Ruyken et al, 2011). This motivates us to study how investments in IT, by putting in place the right systems, processes, and personnel, can enable firms to harness vast amounts of data to make more informed, objective, and firm-specific working capital decisions that can strengthen the potential beneficial effects of working capital on firm performance.…”

Section: Theory Of the Smart Machinementioning

confidence: 99%

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Impact of working capital on firm performance: Does IT matter?

Deb

Naskar

Devaraj

et al. 2023

J of Ops Management

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Although prior research in operations management has explored the working capital—firm performance relationship, the results from these studies remain inconclusive, with studies finding positive, curvilinear, or even insignificant relationships. This is largely due to contingent factors that make this relationship both complex and idiosyncratic. To strengthen the beneficial effect of working capital on performance, firms must therefore make appropriate investments that would foster more objective, informed, and firm‐specific working capital choices. This article examines one such investment, namely in information technology (IT), that can allow firms to optimize the working capital–firm performance relationship. This is important, as the role of IT in this relationship is yet to be explored. Using proprietary IT data from the Harte Hanks database, and based on a sample of 1,054 US‐based manufacturing firms during 2011–2013, we find that IT investment positively moderates the performance effects of inventory, payables, and receivables cycles, and that these moderating effects vary by the type of IT investment, namely IT infrastructure and IT labor. Drawing on the theory of the Smart Machine, we explain how IT infrastructure and IT labor perform distinct roles that can help automate (i.e., use technology to increase the speed and accuracy of process execution) and/or informate (i.e., use technology to create new information), thereby moderating the working capital–firm performance relationship. We argue and find evidence that, due to the largely transactional nature of working capital processes, IT infrastructure has a relatively stronger moderating effect on performance than IT labor.

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Section: Working Capital Management and Firm Performancementioning

confidence: 99%

Section: Theory Of the Smart Machinementioning

confidence: 99%

Impact of working capital on firm performance: Does IT matter?

Deb

Naskar

Devaraj

et al. 2023

J of Ops Management

View full text Add to dashboard Cite

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“…The first perspective is purely financial and considers the SCF approach as a set of financial solutions that generally includes trade receivables and payables and in most cases is provided by financial institutions (Camerinelli, 2009; Chen and Hu, 2011; Lamoureux and Evans, 2011; More and Basu, 2013; Wuttke et al ., 2013a, b). The second perspective is more extensive; it emphasizes the role of collaboration among members belonging to the same supply chain and extends the optimization of working capital to physical aspects, including inventories through practices of inventory optimization and/or inventory shifting (Grosse-Ruyken et al ., 2011; Hofmann, 2005; Pfohl and Gomm, 2009; Randall and Farris, 2009; Wuttke et al ., 2013a, b) and fixed asset financing (Gomm, 2010; Caniato et al ., 2019; Ronchini et al ., 2021). Focusing on inventory refers both to the physical stock (raw materials and components/finished products) of the individual company and to the physical flows of transfers of goods within the buyer-supplier relationship along the supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

Horizontal network collaboration by entrepreneurial ventures: a supply chain finance perspective

Cozzolino

Calabrese

Bosco

et al. 2023

JSBED

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PurposeThe present paper aims at understanding how horizontal network collaborations between small and medium enterprises (SMEs) can be designed and implemented to take advantage of a supply chain finance (SCF) perspective.Design/methodology/approachThis study presents an SCF literature background identifying four literature gaps, and in response to them it adopts an action research approach. The empirical analysis is developed on a network-case study: a horizontal collaboration project between small businesses of the Italian wine industry and their supply chains.FindingsSMEs can play an active role in developing – in terms of design and implementation – their collaborative networks by taking advantage of an SCF perspective for themselves, and their customers, based on the reorganization of relationships interface processes. Taking this perspective can be a concrete and crucial way to sustain the development of SMEs and their supply chains in an actual competitive context.Research limitations/implicationsThe paper identifies the theoretical gaps in the literature, suggests new research areas that deserve to be more deeply investigated and connects case-related results to the key concepts. The empirical part presents a real case application that proposes a complete roadmap for managers and practitioners who wish to experience similar projects.Practical implicationsThis network-case study storyline, presenting an overview of ten years of meetings, with related purposes, is suggesting a roadmap for design and implementation of horizontal network as managerial implications. These kinds of active research projects, with a collaborative mixed team of academics and practitioners, and involving a multilayer group of participants, are positive examples for closing the bridge between companies and academia, which enhance this network of small businesses active in trying to improve their competitiveness working together.Originality/valueThe value of the paper is to embrace a supply chain-oriented perspective for an SME, independent of the financial system and based on inventory flow management. Very little literature focuses on inventory-based research within the SCF framework, designed for real implementation in horizontal network collaboration by entrepreneurial ventures.

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“…Nakit akış döngüsü akademik çalışmalarda genellikle işletme sermayesi yönetimi ve tedarik zinciri etkinliği açılarından araştırılmaktadır (Talonpoika, Monto, Pirtilla ve Karri, 2013). Ruyken (2011) çalışmasında etkin ve verimli bir tedarik zinciri yönetiminin firmanın nakit döngüsünü hızlandırdığını ve sermayenin serbest bırkakıldığını bulgulamışttır.…”

Section: Introductionunclassified

Nakit Akış Döngüsünün Belirleyicileri: Türkiye İmalat Sanayi Örneği

Yenisu¹,

Yenice²

2022

Journal of Banking and Financial Research

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Nakit akış döngüsü son yıllarda işletmeler açısından daha da önem kazanmıştır. İşletmeler borçlarını zamanında ödeyebilmek ve faaliyetlerini kesintisiz olarak sürdürebilmek için mutlaka likiditelerini korumalıdırlar. Nakit yönetimi rekabetin iyice arttığı günümüzde finansal fonların en iyi şekilde yönetilmesi için kritik bir öneme sahiptir. Geleneksel olarak işletmeler nakit akış süresini azaltmak için alacaklarını en kısa sürede temin etmeli, borçlarını firmanın imajını zedelemeyecek şekilde ötelemeli ve stok tutma sürelerini mutlaka azaltmalıdırlar. Bu doğrultuda çalışmada nakit akış döngüsünü belirleyen işletme düzeyindeki unsurlar analiz edilmiştir. Çalışmada Borsa İstanbul (BIST)'da faaliyet gösteren 108 imalat sanayi şirketinin yıllık finansal verileri kullanılmıştır. Dönem olarak ise nispeten istikrarlı diyebileceğimiz 2010-2017 arası analiz edilmiştir. Diğer taraftan veriler hem kesit hem de zaman etkisi taşıdığı için yöntem olarak dinamik bir tahminleme modeli olan Sistem GMM panel regresyon modeli kullanılmıştır. Yapılan korelasyon ve Sistem GMM analizleriyle nakit akış döngüsünü önceki dönem nakit akış süresinin ve aktif devir hızının etkilediği sonucuna varılmıştır. Çalışmada veriler sektörlere ayrıştırılmış ve "tekstil" sektöründe nakit akış döngüsünün en uzun, "metal" sektöründe ise en kısa olduğu bulgulanmıştır. Sonuç olarak, bu çalışmaya göre işletmeler büyüdükçe nakit akış döngüsü süresi kısalmaktadır. Bu nedenle, özellikle küçük işletmeler finansal performanslarını arttırmak için alacak tahsil sürelerini azaltmaya, ortalama stok düzeylerini düşürmeye ve borçlarını daha uzun vadeye yaymaya önem vermelidirler.

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What is the right cash conversion cycle for your supply chain?

Cited by 58 publications

References 31 publications

Impact of working capital on firm performance: Does IT matter?

Impact of working capital on firm performance: Does IT matter?

Horizontal network collaboration by entrepreneurial ventures: a supply chain finance perspective

Nakit Akış Döngüsünün Belirleyicileri: Türkiye İmalat Sanayi Örneği

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