Professional Supply Management

Ways Out of the Working Capital Trap

Empowering Self-Financing Growth Through Modern Supply Management

Authors: Hofmann, E., Maucher, D., Piesker, S., Richter, P.

  • Defines and examines the "working capital trap"
  • 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"
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  • ISBN 978-3-642-17270-0
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Softcover $59.99
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  • ISBN 978-3-642-26765-9
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  • Usually dispatched within 3 to 5 business days.
About this book

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:

•             Finance-Oriented Supply Chain Sourcing

•             Supply Chain-Oriented Supplier Financing

•             Collaborative Cash-to-Cash Management

•             Collaborative Cash Pooling and Netting

•             Supply Chain Financing Platforms

The conceptual models will be clarified using a practical example from the automobile industry. Finally, the "Procurement Value Added" (PVA©) approach will be presented, a concept that measures the contribution of procurement to the company's success.

About the authors

The authors of this series are researchers of the University of St.Gallen, scientists of other leading international research centers with the focus on procurement and supply chain management, consultants of Kerkhoff Consulting and practitioners. As a result of the frequent formation of mixed teams, consisting of authors with theoretical and practical background, a close link between these disciplines occurs.

Table of contents (8 chapters)

  • Call for Action: From Financial and Economic Crisis to Working Capital Trap

    Hofmann, Erik (et al.)

    Pages 1-6

  • Determination of the Internal Financing Power of Corporate Growth via the Self-Financeable Growth Rate

    Hofmann, Erik (et al.)

    Pages 7-12

  • Strengthening Internal Financing Power Using Cash-to-Cash Cycle Optimization

    Hofmann, Erik (et al.)

    Pages 13-20

  • Measures for Strengthening Internal Financing Power from a Corporate Viewpoint

    Hofmann, Erik (et al.)

    Pages 21-53

  • Measures for Strengthening Internal Financing Power from a Supply Chain Viewpoint

    Hofmann, Erik (et al.)

    Pages 55-73

Buy this book

eBook $44.99
price for USA (gross)
  • ISBN 978-3-642-17271-7
  • Digitally watermarked, DRM-free
  • Included format: EPUB, PDF
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Hardcover $59.99
price for USA
  • ISBN 978-3-642-17270-0
  • Free shipping for individuals worldwide
  • Usually dispatched within 3 to 5 business days.
Softcover $59.99
price for USA
  • ISBN 978-3-642-26765-9
  • Free shipping for individuals worldwide
  • Usually dispatched within 3 to 5 business days.
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Bibliographic Information

Bibliographic Information
Book Title
Ways Out of the Working Capital Trap
Book Subtitle
Empowering Self-Financing Growth Through Modern Supply Management
Authors
Series Title
Professional Supply Management
Series Volume
1
Copyright
2011
Publisher
Springer-Verlag Berlin Heidelberg
Copyright Holder
Springer-Verlag Berlin Heidelberg
eBook ISBN
978-3-642-17271-7
DOI
10.1007/978-3-642-17271-7
Hardcover ISBN
978-3-642-17270-0
Softcover ISBN
978-3-642-26765-9
Series ISSN
2192-0443
Edition Number
1
Number of Pages
X, 94
Topics