Managing the Supply Chain Using the Cash-to-Cash Metric

There are many metrics available within a firm which may be used to help manage the firm toward achieving its objectives. Firms seeking supply chain improvements must develop metrics between firms. This paper provides an overview of the cash-to-cash concept. It begins by explaining how to calculate cash-to-cash. It then addresses the research question “How can the cash-to-cash metric be used to help improve the profitability of the supply chain?” First, it discusses how to leverage the three key variables to improve cash-to-cash performance. It considers the link between cash-to-cash performance and firm profitability as well as how to benchmark using the metric. Finally it identifies the premise behind WACC or inventory arbitrage and offers managerial considerations.