What is working capital and supply chain and what does a working capital and supply chain professional do?

Working capital refers to the cash a business needs for its day-to-day operations and is a measure of a company’s efficiency and short-term financial health. The ability to keep low levels of working capital and still meet business requirements can result in higher returns on capital and more cash to fund growth. The company supply chain is often the first place that people look to for working capital reduction opportunities.

Working capital and supply chain specialists work across most industries. The importance of working capital in areas such as manufacturing, pharmaceutical and retail mean that many supply chain professionals have experience in these areas.

Supply chains can be hugely complicated processes with multiple operators and contributors and a key part of any supply chain role is to drive the end to end supply chain performance to deliver competitive advantage for the business. This requires smooth functioning of the supply chains through effective resourcing, planning processes, and business integration.

Key responsibilities

There are a variety of areas of responsibility in supply chain management, including:

  • supply chain transformation and improvement
  • demand driven systems
  • responsive and agile networks
  • ERP Capability
  • demand planning
  • sales and operations planning
  • customer engagement
  • business performance analysis.

Why are they important?

As working capital represents the liquidity necessary for businesses to make routine payments and purchase the materials used in the production of goods, effective working capital management is critical. When a company does not have enough working capital to cover its obligations, it can result in financial distress and ultimately insolvency and bankruptcy. This even applies to profitable businesses.

Skills needed for this role

Working capital and supply chain professionals are typically highly numerate and commercial. They have strong planning skills, a logical and systematic approach to work, and excellent relationship management and communication skills.

Strategic Professional Options linked to this role

Advanced Financial Management

Career opportunities presented by this role

The importance of working capital to an organisation’s financial health and growth potential means that there is an increasing focus on this area. Career progression opportunities are potentially excellent and roles at executive and director level are accessible.

Competencies

High level competencies required include:

  • Advisory and consultancy

    A. Gathers and understands financial and non-financial information to develop complete knowledge of the client business and the environment in which it operates.

    B. Provides expert advice that will add value to the business and gain advantage.

    C. Identify and advise on business partnering to develop strategic relationships to create opportunities, improve performance and solve business problems.

    D. Prepare and present business plans and advise on the actions to implement these plans.

     

  • Corporate and business reporting

    A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.

    B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.

    C. Prepares financial statements for groups of entities using appropriate technologies.

    D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.

     

  • Financial management

    A. Links developments in global trade, markets, business practices and the economic environment to required improvements in the financial and risk management of an organisation.

    B. Advises on business asset valuations, capital projects and investments using appropriate analytical qualitative and quantitative techniques.

    C. Identifies, evaluates and advises on alternative sources of business finance and different ways of raising finance.

    D. Communicates and advises on the impact on financial decision making on current developments in regulation, governance and ethics.

    E. Assesses and advises on appropriate strategies to manage business and organisational performance regarding business and finance risk and effectively communicates the impact.

  • Strategy and innovation

    A. Applies business acumen and commercial awareness to deliver business objectives.

    B. Recommends a range of suitable strategic options from which to develop sustainable plans and objectives.

    C. Evaluates, justifies and implements suitable strategic options.

    D. Adopts and applies innovative methods to implement strategy and manages change.