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05 mar 2020

Wholes­alers: How your position in the value chain affects working capital

– and what to do about it

Thoughts

In a series of four articles, we give our point of view on common working capital related challenges connected to an organization’s position in the value chain. This third article provides advice and examples on how to tackle challenges in the wholesaler part of the value chain.

It may be acceptable or even warranted for these companies to tie more capital – but all the more important is tying the right capital”

5 key areas to consider when optimizing inventory levels

This article gives you the insight that the key is in regulating inventory levels, and how to do it. We found five area that are worth to consider:

  1. Footprint – balancing of lead time and scale
  2. Assortment – know what your customers prioritize
  3. Inventory policy – a tool for pushing stocking location backwards in the supply chain
  4. Differentiation – how to steer an inventory with diverse characteristics
  5. Data management and systems – the foundation for efficient, high-quality processes

Read more about these key areas and how you as a wholesaler can use them in order to affect your working capital by downloading the full article.

About the study

  • 200 companies with net turnover between 1-10 billion SEK were screened whereof 152 companies were allocated to a step in the value chain, ie: Raw material & processing, Manufacturing, Wholesale and Retail. 48 companies were either service companies or difficult to define.
  • For the selected companies, the operating working capital components were analyzed in relation to revenue. Further, turnover days using revenue, spend and cost of goods sold were calculated.

Get the article

Want to get the full article and insight on how to affect working capital as a wholesaler?