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Boosting company performance - Supply Chain Risk Steering & Working Capital as success drivers

2012

If businesses want to remain successful in competitive markets they must take an active approach to managing risks in the supply chain. This can boost performance by as much as 14%. Customers increasingly expect broad, individually tailored product portfolios along with short lifecycles.

Players that can handle the value chain risks involved will enjoy a strategic competitive advantage. But there are consequences: a larger inventory buffer and longer cash conversion cycle are needed to offset the value creation risks. And this means increasing the amount of working capital. Companies should therefore design their supply chain for transparency and set its risks to a target level.

These are the key findings of this study done in cooperation with the University of Hohenheim and the Swiss Federal Institute of Technology Zurich.

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