A Study On The Working Capital Management Performance Of Hisense Electric Co., Ltd. Based On The Critical Business Process

In the ever-changing economic situation, companies must do a healthy development,the development of a company depends on the profits, while the company’s health rely on the working capital. Because working capital is the blood of normal business operations. Enterprises must pay attention to their own health problems especially in an economic downturn period. Many enterprises become impoverished in the economic downturn due to capital chain rupture.The fundamental reason is that guiding ideology of those corporates’working capital management is outdated which lead to a waste of money or unable to pay its debts.Thus,it is very important to find the root of the problem in the working capital management.In addition, in the financial scope, the working capital management is the flow and configuration of enterprise funds.But if you want to use it in practice,it must be put into the environment of the supply chain. Only combined with enterprise business processes,can solve the problem of receivables and inventory management thoroughly. Now most of enterprises are using traditional mathematical methods to manage the working capital.They still only concern about the financial aspect which lead to many enterprises with high brand value have a poor working capital performance.The example of this article is Hisense Electric Co. which is a typical representative of appliance industry.Through analysis of this case to find the reasons for the low efficiency of working capital management of this company.what’s more,we try to solve this problem from a new angle which is business processes and channel perspective.and hope to provide useful methods for other manufacturing companyies. After use the elements and channels method to evaluate its working capital management performance,Finally we found that the working capital management performance of Hisense Electric is at a low level in the industry. And then, through analysis of it’s business process.we found that Hisense Electric has a lot of problems such as incomplete information construction, a single marketing channel, backward supplier management, iunreasonable production layout.Such problems lead to Hisense electric cannot achieve effective connection and lead to information block in each link.Eventually lead to the working capital management performance is a little low. Aiming at the key business process optimization,this article formulate a series of rectification measureds,for example the mass customization, transformation the driving force of technological innovation, improving customer relationship management and so on.The working capital performance evaluation method of this article has avoid the traditional method which only use financial theory to solve financial problems.This method through combination the financial management with business operation to find the enterprise problems more thoroughly and deeply, what’s more,the conclusion is more targeted and practical.We hope to provide beneficial reference and inspiration to other manufacturing enterprises’working capital management.