Analysis & Optimization of Working Capital Management in Construction Industry
Working Capital Management (WCM) forms the corner stone of any business firm. WCM deals with the effective utilization of a firm’s assets to cater for its liabilities so that the day to day operations can be carried out with ease. WCM will also make sure that the firm is making enough profit and has enough liquidity to save it from bankruptcy. Effective WCM will also give rise to better business opportunities and customer relations. Yet in the Construction Sector, there is no effective WCM optimization method considered because of the various factors that come into play during the execution of a construction project. Unlike the manufacturing sector, the construction field is unorganized due to various factors like geographical, political, statutory requirements, productivity of workforce, contractual terms & conditions, type of contract, etc. L&T Construction, as being one of the top construction firms in India also faces the same issues with respect to WCM. This thesis will aim at formulating a guideline or a framework for effective WCM in Engineering, Procurement & Engineering (EPC) Projects by analyzing the performance of Waste Water Business Unit of L&T Construction empirically. The project outcome is envisaged as a tool for the Construction project management personnel to use for comparison and reference purposes in lieu of WCM.
Keywords - Working Capital Management (WCM), Construction, EPC Project