Managing the Innovation Adoption of Supply Chain Finance—Empirical Evidence From Six European Case Studies

Abstract

Logistics’ contribution to corporate performance has increased over recent years, particularly due to supply chain innovations. Opposed to common innovations focusing on the improvement of product or information flow, supply chain finance (SCF) targets the financial flow and allows buying firms and their suppliers to improve working capital and reduce costs. However, the adoption process of SCF is complex and rather unexplored in academia. This article provides an early step in building knowledge about SCF and in particular how firms adopt SCF, why they adopt differently, and what role suppliers play in the adoption process. The objective was therefore to close the gap between our knowledge on product and information flow oriented innovations and financial flow innovations along the supply chain, namely SCF. For this explorative research, we opted for an inductive multiple case study approach with six European firms. Based on our findings, four sets of propositions are posited and an extended SCF adoption framework is proposed revolving around the interrelated adoption processes of buying firms and their corresponding supplier bases.

Innovative Financial Approach for Agricultural Sustainability: A Case Study of Alibaba

“…In previous studies, adopters are assumed to be the focal companies that employ financial solutions as financially oriented approaches to improve the financial performance of themselves or upstream/downstream supply chain. Thus, financial attractiveness is defined as the ability of adopters to withstand pressure on net operating working capital (NOWC) and negotiate interest collar with financial institutions [72,73]. However, the current research defines financial attractiveness according to different objectives-financial attractiveness toward cooperative institutions and toward customers.…”

Supply chain finance: Optimal introduction and adoption decisions

“…The intertwinement of financial and operational decisions has recently received an increasing attention in the literature (Wuttke, Blome, Foerstl & Henke 2013, Protopappa-Sieke & Seifert 2010, Gupta & Dutta 2011, Pfohl & Gomm 2009, Hofmann 2005, Jamal et al 2000 where the main focus lies on how financial restrictions and decisions influence the operational performance of a supply chain. and Wuttke, Blome, Foerstl & Henke (2013) are both based on multiple case studies providing empirical insights into the supply chain and finance interface. We incorporate several observations of into our study to understand the decision processes of most suppliers, who only take SCF into consideration if they have been exposed to enough successful SCF cases.…”

“…The second reason discovered by Wuttke, Blome, Foerstl & Henke (2013) is called upstream dissemination and requires a closer look at the suppliers' typical internal decision and incentive structure. Procurement managers of buying firms communicate with sales managers of suppliers, whose incentives are based on two outcomes: increased prices and reduced payment terms.…”

“…It clearly resembles the so called Bass curve (Bass 1969): initially, the number of suppliers using SCF grows slowly, then the growth accelerates before it eventually declines. Wuttke, Blome, Foerstl & Henke (2013) explored the adoption process of SCF through a series of six rigorous case studies in European production firms, and they empirically derived two reasons for the observed patterns. First, SCF requires internal clarifying.…”

Supply Chain Finance in China: Business Innovation and Theory Development

“…In the last form, the novel context of SCF in China is never explored; this demands an inductive approach and grounded theory to discover regularities in a new phenomenon. For example, Wuttke et al [64] utilized an inductive multiple case study approach with six European firms to explore how the innovation adoption of SCF might be managed. As for grounded theory, Eisenhardt [65] noted that it is particularly appropriate for when a phenomenon is poorly defined and when no existing theories can be used to explain such a phenomenon.…”