How to Offset New Supply Chain Disruptions with a Working Capital Initiative
The COVID-19 pandemic has highlighted the fragility of global supply chains and the need for businesses to be resilient and adaptable to sudden disruptions. Supply chain disruptions can arise from various factors, such as natural disasters, geopolitical issues, regulatory changes, and pandemics. Companies frequently need to maximize net working capital. Unfortunately, leadership teams often overlook the balance sheet in favor of the profit and loss statement. Few companies manage their liquidity with the same care as they handle their costs, in our experience. But, with the impact of the cash conversion procedure, it is possible to release liquidity without cutting staff or reorganizing operations quickly. The optimization of NWC encounters several challenges. Leaders frequently need better visibility into how well liquidity performance measures NWC metrics. One way to offset new supply chain disruptions is to implement a working capital initiative. Working capital is the differenc...