Working Capital Optimization Becoming a Top Priority for Majority of Companies

New York — August 25, 2008 — Working capital optimization is a high priority for a majority of companies, and increasing numbers of organizations are looking to leverage both financial and supply chain strategies and technologies to aid these initiatives, according to a new research brief from Aberdeen Group.

Seventy-one percent of companies identify working capital optimization as a high priority, Aberdeen reported in a research brief based on a series of surveys conducted by Aberdeen on working capital optimization and supply chain finance.

The survey showed that 11 percent of companies faced supply chain disruptions in the past year due to lack of working capital, and 13 percent experienced disruptions due to suppliers' deteriorating financial situations.

Aberdeen said that the results of the research show that best-in-class companies in managing working capital metrics are able to obtain the following competitive advantages:

  • Four day advantage in days payable outstanding compared to average companies;
  • 19 day advantage in days inventory outstanding versus average companies;
  • 6.5 times as likely as peers to have decreased end-to-end financing costs in the supply chain in the past year; and,
  • 5 percentage points higher return on working capital versus average companies.