Research On The Working Capital Management Of Sichuan Changhong Company Based On The Business Process

The management of the working capital is significant in the enterprise financial management work,its management efficiency will have a significant impact on the business operation.The management of working capital in China starts late,from the single element of working capital management to combining various kinds of advanced theory into the management of working capital.Then the "China Business Working Capital Management Research Center" was established,till now the financial and business was integrated.Nowadays,the research of the combination of logistics,capital flow and information flow for the working capital management research is heated.In recent years,under the circumstance that the macro economic growth is slowing,the consumption demand is insufficient,China's home appliance industry faces the problems that lack of core technology,cost increases,product homogeneity and the shortage of working capital.Besides,each company begins the strategy of intelligent transformation,which puts forward higher requirements on the working capital management efficiency.The flow of working capital in the enterprise and the business is indivisible,therefore to improve the efficiency of working capital management,the company needs to improve the business processes first,then to establish a suitable working capital management model which can meet the current development demands of the company.In this paper,on the research methods the writer adopted the literature induction,case analysis and correlation analysis.By analyzing the related references,the writer finds that the studies on business process management and working capital management from domestic and foreign scholars is abundant and comprehensive,but the research on working capital management based on business process is limited,the only studies are mainly from the theoretical view,lack of specific case study.This article selects Sichuan Changhong Electric Co.,Ltd as the case,the writer analyzes its nearly three years of operating conditions and working capital management measures based on business process.By adapting working capital performance evaluation method based on business process,the writer analyzed the changing trend of working capital management of Sichuan Changhong,then made a horizontal contrast with Qingdao Haier and found that Sichuan Changhong faces the problems of receivable recovery ability of working capital management is low,inventory backlog is serious and purchasing negotiating ability is weak.Combining the financial data with the business process,this paper analyses the reason of these problems of Sichuan Changhong causes.Sales process is based on distribution,the credit policy is slack,with no customer oriented marketing mechanism.Production process is not flexible and the response to the market demand is slow.The redundancy of the logistics chain,distribution efficiency is unsatisfied.In purchasing process,the coordination level of the supply chain is not high,the internal supply chain procurement demand forecasting is unreasonable,which fails to form the join forces;Lack of external supplier relationship management,the current Vendor Managed Inventory model did not lead to the expected effect,the control ability to the upstream of the core parts is weak.To summarize the analysis of above,the working capital management measures based on business process of Sichuan Changhong need to be improved.To solve the problems above,this paper analyzes Qingdao Haier,which working capital management based on business process is effective.The writer introduce its successful experiences include the "zero distance" customer relationship,"zero inventory" production model and "supplier alliance" referral settlement,to serve as a reference to other companies,including Sichuan Changhong.Last,to solve the problems of Sichuan Changhong by learning from the experience of Haier,the writer puts forward some measures.First,Changhong shall establish the business process of pulling to sales as a starting point,build a multi-dimensional sales channel,and adopt the policy of cash on the spot as far as possible.Second,the company should implement the elaborating inventory management,from the modular design and production to promoting the intelligent logistics,which aims to increase the company response speed to the market and improve the inventory turnover rate.Finally,Sichuan Changhong need to strengthen the coordination with the supplier by promoting jointly management of the inventory and referral settlement,integrating the internal demand,and deepening the vertical integration.The writer hopes the suggestions could enhance the level of working capital management and help the intelligent transformation of Sichuan Changhong,therefore to achieve sustained development.In the article,the writer combines the enterprise business process management with the working capital management,makes the combination of financial and business management practicable.At the same time the supply chain management,customer relationship management are integrated,which makes the measures of working capital management become more abundant.Through the analysis of Sichuan Changhong,the writer makes up for the case study based on business process of working capital management field that only exists the Qingdao Haier case,which provides valuable reference to other enterprises which are in transformation.