Regardless of the industry, size, or production characteristics of a company, working capital management is an essential practice in running a business smoothly. Working capital management is the strategy used to manage current liabilities and current assets. Efficient working capital management ensures that the company holds enough liquidity to meet short-term expenses and debt. Without sufficient cash available, the company risks not being able to meet expenses quickly. At the same time, holding more working capital is costly. Therefore, it is crucial for any business to balance its working capital efficiently.
Having a proper production scheduling system in place ensures visibility and clarity over current and future production processes. Consequently, it reduces the level of uncertainty and reports directly into working capital management. Is production scheduling the key to efficient working capital management? Also, does it hold for more volatile production environments like HMLV (high-mix, low-volume) businesses? Let's dig deeper into the components of working capital management and the role of production scheduling.