China Electronics Manufacture’s Working Capital Management Research Based On Global Supply Chain

In the age of globalization, China electronics manufacture as a typicalexport-oriented industry has become an important part of the global supply chain.However, the status and value distribution in global supply chain is not equal. MostChina electronics manufacture belongs to the production manufacturing processwhich is the bottom part of global supply chain. Therefore, China electronicsmanufacture’s working capital management faces huge risks and challenges. In themeantime, there are few researches about the working capital management under theglobal supply chain environment. Hence, this paper brings the global supply chaindimensions to research and aims to set up the basic framework of working capitalmanagement based on the global supply chain. Based on the basic framework, thispaper puts forward effective working capital management strategies for Chinaelectronics manufacture in according to its special position in the global supply chainand current situation of working capital management.This paper firstly builds the basic framework of working capital managementbased on the global supply chain. Firstly, this paper puts forward the evaluationmeasure method of working capital management based on the global supply chain inwhich includes four evaluation dimensions that stock take up, flow speed, and processoptimization and business scale. Secondly, this paper puts forward the influencemechanism of working capital management based on the global supply chain in whichincludes the global supply chain channel relationships, global supply chaincoordination and global distribution settlement way three aspects. At last, this paperputs forwards the working capital management model based on the global supplychain in which includes the international researcher and designer, the internationalmanufacturer and the international seller and server.Based on the basic framework above, this paper investigates China electronicmanufacturing industry’s working capital management performance from2007to2010. Through further analysis, this paper finds that there are many problems inChina electronic manufacturing industry’s working capital management as follows:(1)Management consciousness is passive and lack of strategic concept;(2) Thepurchasing channels is in a vicious circle;(3) The international OEM amplifies the risk of production channel;(4) Marketing channel is serious weak. In order to solvethese problems, this paper puts forward effective working capital managementstrategies based on the global supply chain as follows:(1) In the overall managementconsciousness, the industry should strengthen working capital management strategicplanning and set up new ideas of working capital management.(2) In purchasingchannel, the industry can use the supplier management matrix to improve global rawmaterial purchasing management level. It should build domestic strategic alliances topromote the performance of purchase channel in a benign way. And it should expandthe industry chain to break the monopoly of international suppliers.(3) In productionchannel, the industry should apply the advanced production management methods inglobal supply chain management mode. It should shift the production mode from themass production to the mass customization. It also should base on the manufacturingprocess advantage to build up dynamic alliance to realize the integration ofmanufacturing resources.(3) In marketing channel, the industry should integrate thedistribution channel and build up autonomous global distribution system. It shouldimprove channel relationship and establish strategic alliance of distribution channels.It should strengthen brand shaping and product design to improve marketing channelpower. It also should implement international factoring to deal with the risk recoveryof the international accounts receivable.