Characteristics of Financial Supply Chain Management
Institutions: Macro include special financial services, Banks and Investors whereas Micro covers Finance activities.
Functions: It covers Accounting, Financing and Investments.
Instruments: It means financial control instruments like Cash Flow, Profit & Loss and Balance Sheet.
Perspective: It takes care of financial aspects.
Goals: It means optimizing financial resources.
Measures: It assesses enhancement in shareholder's value, Return on Investments and Return on Equity.
Buyer's Focus on SCF and its Challenges
* Reduction in cost of goods sold
* Manual financial processes becoming burdensome.
* Opportunity to reduce weighted average cost of capital for end-to-end supply chain.
* Suppliers unwilling to negotiate payment terms
* Cost & time involved in financial transaction processing
Supplier's Focus on SCF and its challenges
* Scarcity of funds to support production, W-in-P and buyer required inventory.
* Lower the cost of goods sold
* Reduction in overall weighted cost of capital for end-to-end supply chain
* Cash flow uncertainty
* Challenges in getting short term finances at lower costs
* Challenges faced in supporting multiple buyers
* lack of automation for SCF processes
Key market Trends: Enterprises source globally, creating demand for International trade finance products. Demand for Letter of Credit is on decline in global trade. Companies are pro-actively driving Banks to cheaper open account solutions. Access to lower cost of credit options helps SMEs and large enterprises to reduce overall cost of capital for supply chain. use of technology enable banks to get updated information about new enterprises facilitating Banks to lend.
Keep watching this space for more interesting updates!
Kommentare