In a clear sign that India Inc is becoming more agile, the time companies take to convert raw materials into finished goods has dropped dramatically, reaching a 10‑year low of just 14.2 days in FY 2025. According to provisional data from CMIE covering 328 listed non‑financial firms, companies are now completing work-in-progress cycles significantly faster—a move that could improve cash flow, reduce costs, and enhance responsiveness to market demands.
Rising Manufacturing Efficiency
Over the past decade, the work‑in‑progress (WIP) cycle has steadily declined from 23.4 days in FY 2015 to 14.2 days this fiscal, a reflection of tighter production controls and better inventory management. This contraction signals that firms are accelerating the transformation of inputs into final output, freeing up capital and calendar days previously tied up in production processes. However, changes in raw material sourcing and finished goods cycles have been more gradual, suggesting room for further optimisation.
Drivers Behind the Acceleration
According to analysts, the speedier WIP turnaround is being fuelled by improved manufacturing methods and smart technology adoption. Younger promoters appear more willing to embrace innovations such as just-in-time production, lean manufacturing, and automated workflows—often adapting benchmarks from global operations to Indian contexts. The result is a leaner, more responsive production ecosystem that allows firms to manage inventory efficiently and respond dynamically to shifting consumer demand.
Beyond production, this efficiency gain offers companies several operational advantages: reduced financing costs by lowering working capital needs, less storage and inventory carrying expenses, and enhanced agility to deal with supply chain disruptions or sudden shifts in demand. Essentially, faster WIP cycles are contributing to healthier balance sheets and improved competitive positioning for Indian manufacturers.
