The Value of Supply Chain Finance

Chen, Xiangfeng; Hu, Chenxi

doi:10.5772/19208

Cited by 27 publications

(37 citation statements)

References 28 publications

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“…Supply Chain Finance domain has treated issues such as financing different actors of the regular supply chains in order to reach supply chain optimality. Chen and Hu (2011) and Kouvelis and Zhao (2012) suggested two alternative models for working capital financing by involving both financial and non-financial decisions in order to get entire supply chain optimization.…”

Section: Resultsmentioning

confidence: 99%

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Working Capital Financing in Reverse Supply Chains – New Perspectives (Auto-Financing)

Nicolae¹

2018

EJEF

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Competition among Global Supply Chains has been studied intensively in recent years. While forward supply chains strategies such as supply chain or operational redesign were studied often, for reverse logistics most development strategies represented a new direction of research, especially regarding Supply Chain Finance domain. This paper explains how a reverse supply chain can obtain finances for its daily activities in its sorting phase by using a linear model based on penalties for the working capital issue. Here, traditional working capital financing (obtained normally from a financial institution) is replaced by a new production model, resulting in daily activities financing from another actor of the reverse logistics. In this case, the working capital provider is no longer a financial institution, but the original raw material provider. This approach gives a new perspective about finances in a supply chain hence it does not add more financial constraints for companies, and helps in the same time the whole supply chain from an operational point of view. As a result, the manufacture company has less financial constraints, the sorting process improves significantly both in financial and non-financial terms, and the overall supply chain is more competitive on the market.

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Section: Resultsmentioning

confidence: 99%

“…Overall, the penalty model brings a new perspective regarding financing of working capital inside a supply chain: the supplier in the reverse logistics case is not a financial credit institution in terms of Chen and Hu (2011) model, but a financial working capital provider.…”

Section: Risks Associated To the Penalty Systemmentioning

confidence: 99%

Working Capital Financing in Reverse Supply Chains – New Perspectives (Auto-Financing)

Nicolae¹

2018

EJEF

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“…Pellegrino et al, 2018;Song et al, 2018). Within the former, it is usually seen as a set of (innovative) financial schemes (Chen and Hu, 2011;Lamoureux and Evans, 2011;More and Basu, 2013) focused on optimising accounts payable and receivable along the supply chain. Some authors (e.g.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Some authors (e.g. Chen and Hu, 2011;Wuttke et al, 2013a) and practitioner reports (Amariei et al, 2015;Demica, 2011) even identify SCF as a synonym of RF. Within the latter, it is seen as a way to optimise working capital (or even fixed assets), including inventories, and more generally improve the financial performance of a supply chain, focusing on collaborations among supply chain players rather than on financial products (Hofmann, 2005;Pfohl and Gomm, 2009;Randall and Farris II, 2009).…”

Section: Literature Reviewmentioning

confidence: 99%

An optimisation strategy for concurrent Supply Chain Finance schemes

Gelsomino

Boer

Steeman

et al. 2019

Journal of Purchasing and Supply Management

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The uncertainty and financial instability that has plagued companies and industries in the last decade is one of the root causes behind the development of Supply Chain Finance (SCF), a set of schemes aiming to optimise the management of financial flows at the supply chain level. Recent years have seen a proliferation of different SCF schemes, with different impacts on working capital costs and requirements throughout the supply chain. The practicality of SCF usage indicates that the concurrent adoption of multiple schemes is not only possible, but even likely. However, literature on SCF still focuses on individual SCF schemes, while the concurrent adoption of multiple SCF schemes remains largely unaddressed. Thus, the objective of this paper is to assess the tangible benefits deriving from a multi-scheme SCF strategy. Based on the analytical formulation of the benefits of three relevant SCF schemes (Reverse Factoring, Inventory Financing and Dynamic Discounting), the paper formalises a model that investigates the benefits that a buyer can achieve by onboarding suppliers onto these three schemes. The results show how working capital requirements and the cost of finance represent the key parameters to assessing the benefits of the concurrent adoption of multiple SCF schemes. Moreover, the funding limits of the SCF schemes themselves strongly affect the relevance of such strategies; strict limits will increase the relevance of having 'alternative' schemes available to onboard suppliers. To highlight the managerial relevance of the model, the article provides a numerical example based on a real-world application.

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“…S'appuyant sur le résultat de Modigliani et Miller (1958) sur la séparation des décisions opérationnelles et financières si les marchés des capitaux sont parfaits, les auteurs en logistique et en finance se sentaient fondés à mener leurs études séparément. Mais, ces dernières années la littérature sur la gestion de la chaîne logistique, a pris conscience du fait que les problèmes de financement et opérationnels sont imbriqués, et que la structure de financement pouvait avoir une forte influence sur les revenus des membres de la chaîne et sur sa performance globale (Chen et Hu, 2011).…”

Section: Le Financement Collaboratif Entre Client Et Fournisseurunclassified

Le financement collaboratif entre client et fournisseur. Un moyen de renforcer la compétitivité des chaînes logistiques

Gaugain¹,

Viviani

2014

Revue française de gestion

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International audienceEn l’absence de collaboration financière entre fournisseurs et clients, le coût du financement global de la chaîne est inutilement élevé. Cette revue de littérature montre que le crédit commercial est un outil de collaboration et d’optimisation du financement de la chaîne et que des formes de financement innovantes permettraient d’aller encore plus loin sur la voie de la réduction du coût du financement de la chaîne

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The Value of Supply Chain Finance

Cited by 27 publications

References 28 publications

Working Capital Financing in Reverse Supply Chains – New Perspectives (Auto-Financing)

Working Capital Financing in Reverse Supply Chains – New Perspectives (Auto-Financing)

An optimisation strategy for concurrent Supply Chain Finance schemes

Le financement collaboratif entre client et fournisseur. Un moyen de renforcer la compétitivité des chaînes logistiques

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