Economy Up or Down – 'Cash is always King'

Supply chain managers today need to be asking how they can improve their company's financial health by squeezing more cash out of their supply chains


  • After you understand where the gap is, identify the business segments/units where you need to create alignment. Create a cross-functional team comprised of Sales, Finance/Accounting and Procurement/Supply Chain. Then, for each business unit, list out:
    • Top five customers and collection cycle in days and dollars for customers.
    • Top five suppliers and payment cycle in days and dollars for those suppliers.
  • Understand the difference between collection cycle and payment cycle for your top fives. Attack the difference and create alignment based on industry practices. In some cases, you might have to renegotiate with your customer and supply base as they are looking for the same cash as you.

Become a Cash Soldier for Your Company



About the Author: Sanjiv Mahajan is director of materials management at Sara Lee Corp. He can be reached at sanjivmahajan@yahoo.com. Mahajan has held several leadership positions in the supply chain space in his career, both in the industry and as a consultant. He has been involved with successful supply chain turnarounds and his focus is on crafting and implementing supply chain strategies, using strategic sourcing and supplier integration to reduce waste, and designing agile supply bases.


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