Study On Working Capital Management Performance Evaluation And Ability Improvement Of Gree Electric

Working capital management is one of the core contents in corporate financial management,which is related to all aspects of production and operation activities.With the application of advanced supply-chain management theory as well as big data,financial sharing and other emerging technologies in corporate management,the research and practical exploration of working capital management has been lifted to a new level.This paper discusses the working capital management of Gree Electric.The focus is on the performance evaluation of Gree's operational working capital management,discovering deficiencies,and proposing targeted strategies to improve its working capital management ability.This paper initially includes the literature review of domestic and foreign studies on working capital management,as well as introductions of related theories including working capital management and supply-chain management.Then it evaluates and analyzes the performance of working capital management of the home appliance industry and summarizes features of working capital management in this industry.Afterwards,this paper uses working capital management performance evaluation system,based on the perspective of supply-chain,to analyze Gree Electric and find out defects of Gree Electric's working capital management.Specifically,these defects mainly lie in the following aspects:First,the procurement channels mainly rely on occupying upstream funds instead of improving turnover rate of raw materials to improve the performance of working capital management.In the long run,this strategy is lack of sustainability and not conducive to the construction of strategic supply relationships.Second,the traditional mode of production channels lacks of flexibility and may fail to respond quickly to the changes in the market environment,which has led to a low inventory turnover rate and prevented the working capital turnover period from shortening.Third,receivables management capabilities are in short.At the same time,there are some drawbacks in existing marketing channel system,product category is single,and multi-brand strategy is not satisfying.As a result,company may fail to respond quickly to changes in the market environment.In the end,according to problems found in those channels,combined with the frontier theory of supply-chain management,this paper raises some targeted recommendations in the following aspects:In the procurement channel,Gree Electric should fundamentally improve the efficiency of raw material turnover by establishing a supply information sharing platform and promoting the VMI inventory management model under JIT target.Secondly,it should carry out supplier classification management and balance the payment period of accounts payable to build a sustainable strategic supply relationship.Thirdly,it should further promote the forward vertical integration of upstream supply chain.Regarding the production channel,it is recommended that Gree Electric should transform its production model to Pull production model,promote product modularization management,and strengthen the integration of smart equipment manufacturing and traditional production operations.In marketing channel,it is recommended that Gree should improve its accounts receivable management capability,promote customer classification management,and shorten the turnover period of receivables.Meanwhile,it should also adjust existing sales channels system,promote the transformation of traditional channel models,increase the utilization of large-scale home appliance channels,and make overall plans for online channels,so as to play a complementary role in a diversified channel system.Through the analysis,it is hoped that Gree Electric would improve its working capital management capabilities and enhance the sustainability of its working capital management strategy so as to make some contributions to further increase its market competitiveness in the future.