Which link should I invest in first in technology? Porter's value chain, read in days and pesos

At the end of 2015, Genomma Lab's money took 114 days to go full circle: from cash to merchandise, from merchandise to the customer and from the customer back to cash. At the end of 2023 it took 83 [9][16].

That number is called the cash conversion cycle. It is built from three components: inventory days, plus the days customers take to pay, minus the days the company takes to pay its suppliers [28][29].

Between 2016 and 2023, the pharmaceutical company behind brands such as Cicatricure and Suerox [14] did things that show up in its value chain. It finished implementing an enterprise management system in Mexico, built its plant, ran a demand planning system and reported, every year, which component of the cycle moved and why [9]–[17].

That record teaches something this article wants to leave you with: your company's money does not stall inside an area. It stalls in the handoff from one area to another. And there, at those handoffs, is where technology usually pays off first: our reading.

One clarification before we start: Hábil did not work with Genomma Lab or with Arca Continental, and did not take part in anything told here. We tell it using what they themselves reported publicly—their filings with the Mexican Stock Exchange (BMV) and with their investors—and reputable press, each fact with its reference number. When something is our reading, we say so.

In 1 minute

• The risk: investing in technology where it is most visible—the online store, the sales system—and not where the money stalls: between purchasing, operations, sales and collections. In the Banxico survey of 653 companies, 60.9% said they financed themselves through their suppliers and 24.5% through commercial banks [7][8]. What not acting costs, in an example scenario: a made-up distributor that sells 120 million pesos on credit and collects 30 days late has about 10 million tied up in accounts receivable.
• The model: in 1985, Michael Porter proposed breaking the company down into activities and seeing each one not just as a cost, but as a step that should add value [3][5]. That same year, with Victor Millar, he presented the value chain as the way to see the role of information technology [1][2].
• The case: from 2016 to 2023, Genomma Lab brought its cash cycle down from 114 days (end of 2015) to 83, with ups and downs, and explained each year which component moved: suppliers, inventory or customers [9]–[16].
• The most common calculation error: multiplying the whole cycle by daily sales. Each component has its own base, and with Genomma Lab's numbers one receivable day was worth more than twice one inventory day [16].
• What you have to decide on Monday: in which of your handoffs the most pesos stall, and which number will prove the investment paid off. At the end there is a matrix to take to your meeting.

In this article

1. What does the value chain say, in short?
2. Why does money get lost between links?
3. How do you read your chain in three numbers?
4. How do you turn days into pesos without fooling yourself?
5. What did Genomma Lab do, and in what order?
6. What do its numbers from 2016 to 2023 teach?
7. How do you measure the handoff between the customer and the order?
8. What breaks in your systems at each handoff?
9. What does a broken handoff look like in a mid-sized company?
10. Which link should I invest in first?
11. How do I know the investment really pays off?
12. Which mistakes cost the most?
13. What should you bring to Monday's meeting?
14. Key takeaways
15. What does Hábil do?
16. Frequently asked questions

What does the value chain say, in short?

Your company is not a single machine: it is a row of activities, and each one either adds value or eats into the margin.

In two lines: in his book Competitive Advantage (Free Press, 1985), Michael E. Porter, a professor at Harvard Business School, presented the value chain: the activities through which a company delivers value to its customers [3][4][5][6]. In his diagram, the margin is what remains between what buyers are willing to pay and those activities [5].

Porter separates two groups. This is how they appear in the diagram published by Harvard's strategy institute, with our own examples for a Mexican company [5]:

Notice one detail. Collections do not appear as a primary activity. In the diagram, finance lives in infrastructure, as support [5][6]. Our reading: that is why it is so easy for a "sales" or "operations" project to leave it out, and for you to sell more and collect the same.

Why does money get lost between links?

Every area can be in the green while cash is in the red: the cost lives in the handoff, not in the activity.

In value chain analysis, those handoffs are called linkages. A linkage exists when the performance or cost of one activity affects another, and advantage can be gained by coordinating them [6]. An example of ours: if sales promises a date without looking at inventory, logistics pays the cost, with rush freight.

In July 1985, Porter and Victor Millar—then managing partner for practice at Arthur Andersen—published in Harvard Business Review the article that ties this model to systems [1][2]. Its summary opens with one sentence: "Information technology is more than just computers" [2]. In their view, it spans the information itself and the technologies that handle it, and the value chain helps explain what role it plays [2].

Translated into your operations: every time something passes from one area to another, a piece of data passes too. Purchase order, receipt, sales order, invoice, payment. If that data travels in an email or in someone's memory, the handoff becomes slow, expensive or blind. Our reading.

Why does this matter so much in Mexico? Because handoffs also provide financing. In the Bank of Mexico's survey:

• 60.9% of the 653 companies surveyed said they had used supplier financing in the second quarter of 2026 [7][8].
• 24.5% said they had used credit from commercial banks [7][8].
• Among companies with more than 100 employees, the share using suppliers was 71.4% [7].
• More than one source could be selected, so the percentages do not add up [7].

Our reading: payment terms with customers and suppliers are not a treasury formality. They are credit, and that credit is won or lost in the handoffs.

How do you read your chain in three numbers?

Three figures your accountant already has tell you in which handoff your money stalls.

The cash conversion cycle is the sum of the first two minus the third [28][29]. You can check it with Genomma Lab's reports: at the end of 2023 there were 83 receivable days, plus 104 inventory days, minus 104 payable days, equal to 83 [16].

Ask finance not to change the formula for any of them: what matters is the trend.

How do you turn days into pesos without fooling yourself?

A receivable day and an inventory day are not worth the same: each component converts to pesos with its own base.

The commonly used formulas measure each component against a different base [28][29]:

That is why you should not multiply the whole cycle by daily sales: with a high gross margin, an inventory day is worth much less than a receivable day. Our reading, based on the formulas [28][29].

A shortcut that does not depend on your accountant's formula: divide each account's balance by its days. It is approximate, because the formulas use the average balance for the period [28]. With Genomma Lab's year-end 2023 figures [16], our arithmetic:

• Accounts receivable of 3.78 billion over 83 days: about 45 million pesos per receivable day.
• Inventory of 1.85 billion over 104 days: about 18 million per inventory day.
• Payables of 1.84 billion over 104 days: about 18 million per payable day.

For the total, the honest calculation is not in days. The money tied up in operations is accounts receivable, plus inventory, minus payables; what is freed up or consumed is how much that sum changes from one period to the next. Our reading, consistent with the same formulas [28][29].

What did Genomma Lab do, and in what order?

First it put its system in order; then it built its plant; and at each year-end it explained which component of its cycle moved.

Genomma Lab Internacional is listed on the BMV under the ticker LAB B [16]. It works with outside manufacturers, the contract manufacturers known in Mexico as maquiladores, and in March 2023 it named among its savings levers producing more at its Toluca plant and reducing the number of contract manufacturers [17]. In Porter's chain, that is the decision about who performs the operations link.

The sequence, with its sources:

Three readings, all three ours:

1. The system came before the plant. In 2019 the company tied the upgrade of its system to supporting the plant [12]. Manufacturing in-house multiplies the internal handoffs, and each one needs its data.
2. The handoff with the SAT (Mexico's tax authority) has a date. Adapting the system to CFDI 3.3, with a deadline of January 1, 2018, was one of the three purposes of that window [10]. Every company that invoices in Mexico lives through that handoff with each rule change: you plan it around its date, or the SAT sets the date for you.
3. The annual report warns, separately, of two risks you should watch together: not achieving the expected savings from in-house production, and the need to keep improving systems, distribution and inventories [17].

What do its numbers from 2016 to 2023 teach?

A number without its cause is useless for deciding; Genomma Lab published both every year, and that is the lesson.

This is how the years we use in the analysis closed, according to its fourth-quarter reports [9]–[16]:

\ The 2021 report says "26 days" [14]; the 2022 report confirms the figure in the table: 127 days, six more than at the end of 2021 [15]. Each year-end figure is shown as published, although later reports sometimes restate it.*

First: the 2016 improvement came from suppliers, not from collections. The cycle fell 21 days, but receivable days rose and payable days went from 64 to 102 [9]. Our reading: had you looked only at the total, you would have congratulated collections for something purchasing did.

Second: the best number is not always the healthiest. The lowest cycle in the series, 82 days in 2018, came from payables that the company itself called temporary, because it had bought inventory in advance [11]. An improvement the company itself calls temporary should not be celebrated as permanent.

Third: technology shows up in the component it touches. In 2020 and 2021, Genomma Lab attributed the drop in its inventory days to its demand planning system [13][14]: not the total, but the component. That is how an investment is measured.

This is not a diagnosis of Genomma Lab. It is an example of how to read a chain with public numbers from 2016 to 2023. And a general warning, not about this company: no improvement in the cycle is permanent. A change in mix, market or terms can reverse it, and that is why it is measured every quarter.

How do you measure the handoff between the customer and the order?

When the link that matters most is the order, the figure to track is how many orders arrive without going through a person.

Arca Continental, a Coca-Cola bottler listed on the BMV [23], sells to neighborhood stores, the so-called traditional channel; its presentation mentions a base of more than 830,000 customers in Latin America [24]. In October 2024 it launched Tuali, the evolution of its AC Digital platform, available in Mexico since that month [25]. What it reports, in its own words:

• In 2023, its digital sales were 60% of traditional channel volume [25].
• In the second quarter of 2026, in Peru, its «mix digital» [digital mix] in the traditional channel reached 73%, the highest level since its implementation [23].
• In Argentina, digital orders were 83.5% of traditional channel volume in that quarter [23].
• In its corporate presentation, 65% of customer volume in Latin America is already digital [24].

Our reading: that figure measures a handoff, not an area. An order that comes in through the platform already brings customer, product and quantity ready for the warehouse; one that comes in by phone has to be keyed in. Arca does not publish how much it saves, so here we only use what it measures.

What breaks in your systems at each handoff?

Almost always the same thing breaks: the data is entered twice, arrives late or nobody confirms that it arrived.

The last two columns are our reading; the SAT rule has its source.

The SAT row deserves one more line. When a sale is not paid in a single installment, rule 2.7.1.32 of the Resolución Miscelánea Fiscal for 2026 requires a CFDI for each payment, or one for all of a customer's payments in a month, no later than the fifth calendar day of the following month [26][27]. That handoff has a legal deadline.

What does a broken handoff look like in a mid-sized company?

A single order that crosses five areas can get stuck in three of them without any of them seeing it.

Example scenario. This case is not real: it is a made-up distributor, with round figures for illustration. It does not describe any company or any Hábil client.

A distributor sells 120 million pesos a year, all on 45-day credit. A customer orders 100 boxes over WhatsApp. The salesperson enters the order in the system the next morning.

The warehouse only has 80, but the system said 100: the last receipt was entered late. 80 are shipped. Billing invoices 100, because it invoices what was ordered. The customer does not pay until the invoice is canceled and reissued.

When the customer finally pays, the transfer arrives without a reference. Treasury takes a week to identify it and the payment receipt is issued past the deadline.

Result: the distributor collects at 75 days, not 45. Since all its sales are on credit, one receivable day is worth about 329,000 pesos (120 million over 365); those 30 extra days are about 10 million pesos in accounts receivable. No area did anything wrong within its own activity. Everything was lost in the handoffs.

Each area would ask for its own system. The three broken handoffs—order, receiving and payment—would still have no owner.

Which link should I invest in first?

Invest first in the handoff where the most pesos stall, not in the area that complains the most.

The thresholds are guidelines and ours, not an official standard or part of Porter's model; compare them with your agreed terms and your trend.

The rule for deciding, in four steps. It is a tool of ours, meant as a guideline, with one explicit assumption: each handoff is converted to pesos with the base of the component it moves [28][29].

1. Identify which component each handoff moves. Order, invoice and collections move receivable days; purchasing, receiving, production and fulfillment, inventory days; receiving and payment, payable days.
2. Take the excess days against your terms or your target, and convert them with their base. For payables, count the days below the agreed terms: paying early is what ties up money. Receivables: daily credit sales. Inventory and payables: daily cost of sales. Or the approximate shortcut: the account balance over its days.
3. Add up the re-entry hours for that handoff. They are a cost and a risk of error.
4. Start with the handoff with the most pesos tied up. If two are tied, start with the one closest to collection: there the money has already been earned and only needs to be brought in.

Example scenario, with the same made-up distributor: it sells 120 million on credit and its cost of sales is 84 million. It collects 25 days beyond its terms: 25 × 329,000 ≈ 8.2 million in receivables. It holds 20 days of inventory above its target: 20 × 230,000 (84 million over 365) ≈ 4.6 million. Had it used daily sales for inventory, it would have calculated 6.6 million and overestimated that handoff by 2 million.

How do I know the investment really pays off?

It pays off if the handoff's number goes down and no neighboring handoff goes up; if you cannot say which number, do not invest yet.

Before signing off on the project, put five things in writing. The list is ours:

1. A three-month baseline of the handoff's number, in days or as a percentage.
2. A single main number, translated into pesos with the base of its component.
3. The target and the date. For example: from 70 to 55 receivable days in two quarters.
4. The component that should move and its cause, as Genomma Lab did with its inventory in 2020 and 2021 [13][14].
5. The neighboring handoffs. If receivables go down but inventory goes up, the problem moved. In 2018, Genomma Lab's cycle fell because its payable days rose more than its inventory days, due to an advance purchase [11].

And a common-sense test: re-entry should disappear, not just get faster.

Which mistakes cost the most?

The most expensive mistakes are about place and calculation: investing in the activity instead of the handoff, or measuring the handoff wrong.

1. Investing in the most visible link. An online store or a new sales system, without touching invoicing or collections. Consequence: more orders than the next handoff can process.
2. Measuring each area separately. Each director presents their indicator in green. Consequence: the cash cycle grows and nobody owns it.
3. Converting the whole cycle to pesos with daily sales. Consequence: the weight of inventory and payables is overestimated, and the wrong handoff is chosen [28][29]. Our reading.
4. Reading the number without its cause. Consequence: customer credit gets cut because of an accounting effect. In 2023, Genomma Lab noted in its table that its Latin America receivables were affected by accounting effects [16].
5. Leaving collections out of the project because "that's finance's job." Consequence: you sell more and collect the same.

What should you bring to Monday's meeting?

A one-page matrix tells you which handoff to invest in first and who answers for it.

Fill it in with your finance director and your operations director. It is a tool of ours, not part of Porter's model. Its assumption is the same as the previous rule's: each handoff is converted with the base of the component it moves.

How to read it:

1. Sort by pesos tied up. The first row is your candidate.
2. If a row has no owner, that is the first finding. A handoff with no owner is not fixed with a system.
3. If you cannot fill in a cell, you already know what to measure first. Ask finance for eight quarters of days and balances, and follow a single order from order to collection, counting how many times someone copied data by hand.

Key takeaways

Three questions for your next leadership committee:

1. If the cash cycle improved last year, which component moved it, and will that cause repeat?
2. How many pesos is one receivable day worth today in our company, and how many is one inventory day worth?
3. Which handoff has no owner, and what technology decision are we putting off because of it?

What does Hábil do?

When the handoff that ties up the most money needs a system that does not exist today, Hábil builds it to your specifications, connected to what you already have.

We start from one question: what needs to stop happening in your operations? Here, that comes down to three things:

• Reconciliations and balancing. What was sold against what was collected, what was invoiced against what was deposited, what one system says against what the other says.
• The operation that lives today in spreadsheets and emails, moved into a system with permissions, history and reports.
• Connected to your ERP—SAP, Oracle, Microsoft Dynamics 365, Odoo, CONTPAQi or another—so you stop entering the same thing twice.

Before writing a single line, we check whether something already exists that solves it. We deliver in stages, and the code, the tests and the documentation stay in your repository, in your name.

If what is missing is for the systems you already have to talk to each other, we also help you integrate them: every operation confirmed and traceable, without unnecessary re-entry.

See Build your custom system, Integrate your systems and the article Payment complement and CFDI cancellation.

If you filled in the matrix and one handoff came out very expensive, let's start there. Request your first conversation, at no cost. In it we review whether it makes sense to configure what you already have, use a product or build, and what you would receive in each case. Write to us on WhatsApp.

Frequently asked questions

What about Porter's five forces?

They are left out on purpose. They are a model for deciding strategy in relation to the industry. This article uses only the value chain, because it is the one that tells you where to invest inside your company.

Is a long cash cycle bad?

Not necessarily. It depends on your industry, your terms and the cause. Genomma Lab, for example, explained its high inventory at the end of 2018 as an advance purchase for the following quarter's sales [11]. What is bad is not knowing the cause.

Why isn't it enough to multiply the cycle by daily sales?

Because receivable days are measured against sales, and inventory and payable days against cost of sales [28][29]. Adding them on a single base mixes two different units.

Sources consulted on October 22, 2026. Quotations from Spanish-language documents are kept in the original, with a translation in brackets.