Focus on capital, drugs firms told

12 October 2008
More news

13 October 2008

Pharmaceutical companies should work more closely with suppliers to improve their management of working capital.

According to a study by consultancy Ernst & Young (E&Y), there has been a growth in interest concerning ways to manage working capital - including accounts receivable, payable and inventory - among large pharma firms.

E&Y believes firms could release between $17 billion and $35 billion (£9.6 billion and £19.8 billion) in cash by managing liquidity better.

David Sage, author of the report, believes drug companies have not focused on the process in the past because they have enjoyed market domination and high margins. He said firms could improve their working capital by tightening up payment terms for suppliers and working with them to create shorter and more reliable lead times. "This is the dynamic of the demand chain, knowing how much to absorb and offset and how much is with your suppliers."



SMoct2008

LATEST
JOBS
Hounslow, Heathrow /Richmond upon Thames
Competitive salary depending on experience plus generous share award
Tails.com
Gatwick, West Sussex
Competitive plus benefits
Gatwick Airport
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE