The Effect of Supply Chain Management Practices on Cash Conversion Cycle

Amna Asim and Danish Ahmed Siddiqui

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: This paper examines the impact of supply chain management (SCM) practices on the cash conversion cycle (CCC) of non-financial firms in Pakistan, addressing challenges like inefficient cash flows, extended payment periods, and limited access to credit. The research addresses the theoretical advancement of how SCM practices such as Just-in-Time (JIT), Supplier Responsiveness, and Information Sharing can optimize CCC components-Days Inventory Outstanding (DIO), Days Receivable Outstanding (DRO), and Days Payable Outstanding (DPO) to enhance financial performance, a relationship underexplored in emerging markets. The study employs Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze survey data from 115 supply chain managers, alongside financial data from 2010 to 2023. The key findings reveal that Supplier Responsiveness and Information Sharing significantly reduce CCC components, improving liquidity and operational efficiency. Theoretically, the study extends Resource-Based Theory (RBT) and Dynamic Capability Theory (DCT) by demonstrating the role of SCM as an external resource for competitive advantage. Managerially, it provides practical strategies for enhancing cash flow, reducing inventory holding costs, and improving profitability. Societally, it highlights the role of efficient supply chains in fostering economic resilience, sustainability, and job creation in developing countries, particularly in volatile economic contexts like Pakistan.

Keywords: RBV; DIO; Just-in-time; Cash Conversion Cycle components; Suppliers Responsiveness; Suppliers Quality; DRO; Information sharing with suppliers; DPO; SSMP; DCT (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/341083/1/Thesis-Part3-Amna-Asim.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:341083

Access Statistics for this paper

More papers in EconStor Preprints from ZBW - Leibniz Information Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().