Research On Working Capital Management Of Automotive Mold Industry Based On Value Chain

Nowadays,the global economic growth rate is slowing down,and the domestic and international economic situation maintain grim.Enterprises must strengthen their core competitiveness if they want to maintain their advantages and continue to survive and develop.In order to keep up with the development of the automotive industry,the domestic automotive mold industry working capital management should be based on the value chain from the perspective of the entire industry value chain.Working capital management is an important part of financial management,and the value chain-based working capital management is capable of meeting the current rapid economic development.By analyzing and optimizing the operating efficiency of all aspects of the internal and external value chain,enterprises may reduce the less or unnecessary capital investment in the corporate operate process,improve the rational allocation of resources in the entire value chain,maximize the value of the enterprise,and thus stand out in the market competition.The paper selects Company A which is a leading company of domestic automotive mold industry as an example and expounds the advantages and disadvantages of the company’s working capital management,then proposes several improvement suggestions for those shortcomings that have reference value for the company.The paper uses the case analysis method.Firstly,it reviews the domestic and foreign literature research on value chain management and working capital management,then expounds the related concepts and theories about the value chain management,working capital management and working capital management based on the value chain.Secondly,the paper selects Company A which is a leading company in the domestic automotive mold industry as the research object,and learns its value chain and working capital management through annual financial statements and relevant industry information,then analyses the status of Company A’s working capital management through the procurement,production and marketing of the internal value chain and upstream suppliers and downstream customers of the external value chain.Through the analysis of Company A,it can be seen that the company values the strategic partnerships with its suppliers and customers,specifically in developing collaborative order management system for industrial chain collaboration and putting it into use.Additionally,the company has long been committed to improving the working capital management performance by innovating the production methods,shortening the production cycle and accelerating the inventory circulation efficiency in the value chain.According to the analysis of the working capital management of Company A’s internal and external value chain,the paper points out the following problems of the company’s working capital management: excessive utilization of accounts payable by procurement channel,weak supplier management,large proportion of production channel working capital,increasing working capital of marketing channel,weak credit management etc.In response to the above problems,the recommendations for improving the value chain based working capital management of Company A are as follows: firstly,strength supplier relationship management,including strengthening strategic cooperation with suppliers and improving supplier management system;secondly,optimizing production processes,including improving the standardization of production,improving employee productivity,strengthening enterprise internal communication;thirdly,strengthen customer relationship management,including strengthening the relationship with strategic partners,identifying product standards clearly,speeding up the response to customers,improving customer information management and strengthening credit management.Finally,the article summarizes itself and points out its shortcomings.