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  3. Inventory Cycle in WCM

On 11th day of Christmas my expert showed me how to optimise our total WCM

  1. Taking a holistic view of working capital and agree on clear working capital definitions
  2. Establishing a working capital framework for the programme, as shown below:
      • Source & Copyright©2020 – Bank of America
  3. Identify your working capital drivers, as shown below:
    • Source & Copyright©2020 – Bank of America
  4. Driving improvements in:
    • Days Inventory Outstanding 
    • Days Payables Outstanding
    • Days Sales Outstanding 
  5. Developing, like Volvo, games to show all levels of staff how the Cash Conversion Cycle is affected by all departments and processes, see: https://ctmfile.com/story/incentive-programmes-for-rewarding-working-capital-management-best-practice
  6. Offering working capital performance incentives beyond the treasury and finance departments to all departments and individuals within the company who could make an important difference to the supply chain were incorporated, e.g. give sales managers DSO targets as well as the normal sales targets, see: https://ctmfile.com/story/incentive-programmes-for-rewarding-working-capital-management-best-practice
  7. Renewing the small team in charge of the working capital management programme to ensure a high level of enthusiasm and innovation continues and that the group keeps their focus on continuous improvement in the total working capital improvement programme, see: https://ctmfile.com/story/four-strategies-for-better-working-capital-management

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