Supply Management Performance and Cash Conversion Cycle

The purpose of this study is to explore the relationship between dimensions of supply management performance and the components of cash conversion cycle. Although previous studies investigated the link between supply management performance and financial performance, the relationship between supply management performance and liquidity, which can be assessed by the cash conversion cycle, has been largely overlooked. In this study, therefore, the proposed model and hypotheses were tested using data from small and medium size enterprises (SMEs) operating in Greece. Support was found for the relationship between supply management performance and cash conversion cycle. We hope that the results of our investigation will help supply management professionals not only to have a clear understanding of the importance of balance sheet and profit and loss statements in relation to supply management performance, but also to pay more attention to the contribution of supply management practices to ratios derived from balance sheets and profit and loss statements.