The Relationship between Inventory Management, Working Capital and Supplier Performance: Supply Chain Finance Perspective of Suzuki Capital Motors

Abstract

From the standpoint of supply chain finance (SCF) at Suzuki Capital Motors Pakistan (SCMP), a significant participant in Pakistan's automotive sector, this study investigates the connection between working capital, inventory control, and supplier performance. SCMP needs to maximize these elements to improve financial and operational results in order to stay competitive. SCF techniques can enhance cash flow, save costs, and fortify supplier relationships, especially in the capital-intensive auto manufacturing industry. By addressing the issues SCMP has with working capital, inventory, and supplier performance, this study offers practical advice for enhancing supply chain operations and resilience. The results draw attention to important problems facing Pakistan's auto industry, such as production hold-ups, excessive inventory expenses, and financial strain brought on by reliance on several suppliers and import challenges. Government rules, expensive finance, and dwindling customer demand also make operations more difficult. To prevent shortages and keep a stable supply chain, SCMP uses inventory management techniques including FIFO (First-In-First-Out) and frequent checks. In order to prevent production stops and monetary losses, the Imports Parts Purchasing (IPP) division is essential. It is stressed that working together and communicating well with suppliers are crucial tactics to reduce interruptions. SCF techniques, such as supplier finance and reverse factoring, are suggested to maximize working capital through enhancing cash flow, lowering borrowing costs, and cultivating closer ties with suppliers. For SCMP to preserve both operational effectiveness and financial stability, these steps are essential. The SWOT analysis and Financial Performance Ratios tools are among the qualitative and quantitative data used in the study to assess SCMP's effectiveness. Although a SWOT analysis highlights SCMP's robust market presence, varied relationships, and knowledgeable personnel, it also points out drawbacks such the company's dependency on imported parts, limited product selection, and ineffective inventory control. High gross profit margins are accompanied by negative net profits and low liquidity, according to financial analysis. To improve resilience and market position, it is advised to develop digital inventory management technology, diversify suppliers, and employ SCF solutions.