Author: Alexander Flach
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Taming the Bullwhip: 3 Key Strategies for Smarter Supply Chain Management This article will explore the causes of the bullwhip effect: its impact on a company’s supply chain, operating working capital and cash conversion cycle. By understanding these effects, businesses can improve coordination, enhance forecasting accuracy, and build a more agile, resilient supply chain. The…
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Considerations when Benchmarking Working Capital This article explores the use of Benchmarking Working Capital as a tool for evaluating a company’s performance. It examines its relevance, highlights associated challenges, and outlines three key considerations companies should factor in when determining their optimal operating working capital needs. Key Take Aways Want to own this article? Download…
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Operating Working Capital and the Cash Conversion Cycle This article explains what the Cash Conversion Cycle is, what it consists of, and why it is important to understand. It will also provide insights into how capital can be tied up in operations, and how this affects the balance sheet and a company’s cashflow. Additionally, the…
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Forecast to Fulfill The Cash Conversion Cycle is often approached through one of three separate processes, namely Purchase to Pay, Forecast to Fulfill and Order to Cash. How well a company manages these processes has a direct impact on its Operating Working Capital requirements. Forecast-to-Fulfill (F2F) covers the end-to-end process of predicting customer demand and…
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What is Good Operating Working Capital – Introducing the Setpoint Theorem This article explains what good operating working capital looks like, what affects this level, and why it is important to maintain. It also introduces the operating working capital Setpoint theorem. This suggests all companies have an optimal level it should maintain in order to…
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Lean Operating Working Capital – an Introduction This article will introduce the concept of Lean Operating Working Capital and its associated Setpoint philosophy. It will explain its origin, what it is, why it is important and its benefits. It will also briefly talk about why it is not only a finance concern, but must be…
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What is Operating Working Capital? Definition, formula, and application This article explains what operating working capital is, what it consists of, and how to calculate it. It also provides insights in Additionally, the article covers why operating working capital is important to a company and how it impacts the cash conversion cycle and cashflow. It…
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Order to Cash The Cash Conversion Cycle is often approached through one of three separate processes, namely Purchase to Pay, Forecast to Fulfill and Order to Cash. How well a company manages these processes has a direct impact on its Operating Working Capital requirements. Order-to-Cash (O2C) encompasses the complete sales cycle, from receiving a customer…
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Purchase to Pay The Cash Conversion Cycle is often approached through one of three separate processes, namely Purchase to Pay, Forecast to Fulfill and Order to Cash. How well a company manages these processes has a direct impact on its Operating Working Capital requirements. Purchase to Pay (P2P) covers the procurement lifecycle, from purchasing goods…
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Short-term Cashflow Forecast – Definition, application and considerations This article explain what a short-term cashflow forecast is and why it is important. It will also provide insights into choice of forecasting horizons, what cash in- and outflow data is required, and how often it should be reviewed and updated. Additionally, the article will also provide…
