ManufAi

Last week, we talked about manufacturing and how AI helps decision making process in manufacturing. AI helped us clean up the chaos—better forecasts, smarter schedules, fewer fire drills. Great. Now it’s time for the laundry: working capital. We’re sorting the socks of receivables, payables, and inventory so your cash stops disappearing in the dryer. Here are the practical levers to keep your plant humming while your balance sheet gets lighter.

Working capital levers don’t have to be a snooze fest—imagine them as the secret gadgets in a superhero’s utility belt for your business cash flow. You know, like Batman but for money. These levers help you juggle your cash like a pro who actually remembers which ball is which.

First up: Days Sales Outstanding (DSO)—or as accountants secretly call it, “How long until my money arrives?” It’s like waiting for a pizza delivery, but the pizza is your cash, and it’s always a surprise if it’ll be hot and fresh or cold and late. Then there’s Days Payable Outstanding (DPO), which is your polite way of telling suppliers, “Hey, I’ll pay you… eventually,” without sounding like a villain. Finally, Days Inventory Outstanding (DIO) is the amount of time your products stay stuck in the warehouse—think of it as hoarding snacks during a Netflix binge. Too many snacks, and you’re stuck with crumbs; too few, and the show gets interrupted.

https://jmra.in/archive/volume/1/issue/1/article/15637/pdf

Funny thing! I was reading a case study about Lupin Limited which inspired me to write this blogpost on Working Capital levers. Lupin Limited, a big pharma company, played this balancing act like a circus act, juggling payables, receivables, and inventory just right without dropping the cash flow ball. They realized being too generous with credit is like lending your Netflix password—it feels good until someone streams a whole season without you.

In a world of rising interest rates, tight credit, and supply chain chaos, it turns out the best working capital lever is a mix of brains (like tech automation), diplomacy (keeping suppliers happy), and a sprinkle of sarcasm (to keep you sane).

And here’s a little secret: the Cash Conversion Cycle is basically the plot twist you want in your business thriller—shorter cycle? Happy ending with cash flowing like a blockbuster hit. Longer cycle? Maybe less popcorn and more worry.

So next time you think “working capital,” imagine Batman, pizza delivery, and Netflix parties. It might just make your financial strategy a lot more entertaining—and profitable.