Hofmann, E., Maucher, D., Piesker, S., Richter, P.
2011, X, 94 p.
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Shows ways of identifying and strengthening in-house financing potential
Approaches the topic from both company and supply chain perspectives
Introduces the concept of "Procurement Value Added"
Especially in times of an economic boom following a crisis, companies have to deal with the phenomenon of the "working capital trap," which signifies a company's increasing need for financial liquidity in times of hindered access to debt capital, caused by the increasingly restrictive credit approval processes of financial institutions. As a consequence of cost savings, this situation is often reinforced by a low level of inventory.
This book takes up the problem and shows ways of escaping the "trap" by identifying and strengthening in-house financing potential. First, different operating ratios will be introduced. These refer to the amount of capital committed to the flow of goods and to the amount of in-house financing possible. Subsequently, methods for consolidating in-house financing that are affected by procurement processes will be presented from the company's and the supply chain's perspective.
From a company's perspective, the methods for consolidating the amount of in-house financing over the following topics:
• The Management of Payment Terms
• Inventory Management
• Product Group and Supplier Management
From the supply chain's perspective, the following methods for extending the possible amount of in-house financing will be discussed: