Working capital management in the Russian automotive industry supply chain

Abstract

Companies must successfully finance their supply chains if they are to maintain their competitive advantage. Specifically, asset management in a supply chain is an essential component of improving one's financial stance. This study examines operational working capital management in the Russian automotive supply chain using the transaction cost theory (TCE) perspective. It considers working capital management (WCM) models with financial supply chain analysis using cash conversion cycles (CCC) and return on assets (ROA) as measurements. Companies operating with efficient WCM models are usually the leaders and the most powerful actors in the supply chain. Overall, according to our analysis long accounts payable payment period are prevalent, inventory levels high and CCCs short. Further, the most profitable firms are those that pay their suppliers promptly. The WCM models based on the data of this study may contribute to deliberate strategies and choices regarding the optimal governance structures of supply chains.