Research On The Business Process-oriented Working Capital Management

By looking at the current situation of China’s automobile industry, it is mixed with risks andopportunities for the future prospects of China’s automobile industry. Since the reform and opening up,especially in recent years, it also has given the strong momentum to the development of China’s automobileindustry. Automobile industry as a pillar industry of the national economy has become increasinglyprominent. The automotive industry based transportation equipment manufacturing has been replaced byelectronic information and communication industry.. Especially the "WTO" after the door is fully opened,the auto companies of the car industry and the developed countries in the same market, will inevitably facefierce competition and challenges. How to improve working capital management performance for carmanufacturer has also become a topic of concern. Since rapid transformation and upgrading, to a largeextent it critically depends on the effectiveness of the financial management of enterprises working capital.Then this study is meaningful from the prospects of theoretical study and the practical application.Through reviewing of the literature it was not difficult to found that in the literature of businessprocess-oriented working capital management studies, the majority were in favor of performanceevaluation analysis, few of them was focused on the working capital management system for businessprocess-oriented research, let along to the guidance of the practice. This study explored the working capitalmanagement issues of the automotive industry based on the business processes, typically, taking JMC as anexample. This paper outlines the concept defined in the business process-oriented working capitalmanagement, the JMC business process-oriented working capital by purchasing processes, productionprocesses, sales process, classification of financial activities. Next, the paper takes an overview of theoperating capital management of the recent years. This paper found that there is a potential long-termoccupation payable crisis, accounts receivable and bad debt risk increase trend,"inventory crisis", the flowof capital and the structure of the high debt ratio, unreasonable working capital management issues. Basedon the supply chain theory, lean production theory, channel conflict management theory, the paper suggeststhat JMC need to sort out the working capital management issues by focusing on the restructuring thebusiness processes. The paper recommends that JMC should establish strategic partnership relationsfriendly channels; to improve long-term occupation of accounts payable; to perfect customer relationshipmanagement system; and to improve the management of accounts receivable; to establish resolutionmeasurements to resolve channel conflict; to improve the "Inventory crisis "; to reduce the cost oflong-term financing to diversified financing channels.As for the business process based working capital management research, the future study opportunitycan target on the linkage analysis of the various processes and the approaches to linkage between businessprocesses,. The future study can also move on to exploring the working capital warning mechanisms and ITplatform design using the business process-oriented management as a theory.