Research On Working Capital Management Of Xinbao Gufen Under The Digitization Of Supply Chain

Thanks to the rapid evolution of technology,digitalisation and intelligence have gradually become the standard for today’s businesses to strengthen their competitiveness.The Chinese government has also paid great attention to the development of the digital economy,continuously introducing a variety of favourable policies to motivate enterprises and vigorously promote the digital transformation process.For manufacturing companies,the impact of a good or bad supply chain is crucial,which is why an increasing number of companies see digital transformation of the supply chain as a future transformation direction.As the supply chain is a vehicle for working capital,supply chain transformation can have a direct impact on companies’ working capital turnover efficiency.In particular,for firms such as equipment manufacturers,which have a high demand for liquidity,the level of working capital management is closely linked to the development and survival of the firm.Despite the much-needed digital transformation,many companies,especially SMEs,still shy away from it.Building on the above,in this thesis we want to explore the link between supply chain digitisation and working capital management as an opportunity to promote digital transformation.This thesis will provide an analytical framework based on theories and literature on supply chain management,digital transformation and working capital management.First,we take Xinbao Gufen,a supply chain digitization case study and a leading exporter of small home appliance industry in China,as a case study to analyze the background and motivation of supply chain digitization,to explain the supply chain digitization process,and to explore the impact of supply chain digitization on working capital management based on the classification of working capital in channel theory and firm-specific activities in three aspects: purchasing,manufacturing,and selling.The supply chain digitisation process will be explained.Second,the effectiveness of working capital management in the context of Xinbao Gufen’s supply chain digitisation is analysed.Taking into account the one-sidedness of the evaluation method of working capital management based on the factor perspective,this thesis introduces a channel-based evaluation method of working capital management,which allows a more in-depth and comprehensive analysis of the company’s working capital management with a dual perspective and delves into the information of the specific elements of each channel of the company.Finally,this thesis concludes that the digitalisation of the supply chain can improve the working capital turnover efficiency of the three segments of the enterprise,namely procurement,production and sales,from different perspectives,thus facilitating the smooth operation of the enterprise’s overall capital,reducing the operational risks of the enterprise,and in turn supporting the digital transformation of the enterprise in a sustainable manner.Through the study of the digitalisation of the supply chain of Xinbao Gufen,this thesis draws out its successful experience,but also finds that there are still shortcomings in the company and there is still more room for improvement in the future.The contribution of this thesis is to complement this study by establishing links between working capital management and supply chain digitalisation by combining research on supply chain management,digital transformation and working capital management with case studies.It will also provide lessons for other companies looking to implement digital transformation of their supply chain or improve the efficiency of working capital management.