Our globalizing economy increases the complexity of our industrial value chains which span more countries and providers than ever before. As quickly as the flow of goods in the chain is integrated and optimized the information and finance flows are fragmented. The credit crisis has exposed inherent weaknesses. The cost of financing is on the up, while suppliers, especially SMEs and those located in developing countries, struggle to acquire the necessary credit. To address these costs and the risks of supply chain disruption, large buyers are increasingly interested in managing the financial supply chain from an equally integrated vantage point. Supply Chain Finance (SCF) deals with approaches and instruments that optimize transactions, working capital and the cost of the extended supply chains. New models could significantly improve access to finance or reduce finance requirements through unlocking potential in supply chains instead of relying on external creditors.
This research project examines new SCF models and tools which evaluate short-term and long-term collaborative pre-shipment financing.
These new models all involve the financing of transactions that are inherently higher risk than those now addressed by reverse factoring. The research and development project, SCF 2.0, aims to lay the foundations for the next generation of SCF applications. These applications will allow companies to facilitate capital flows and manage the associated risks and, in doing so, generate additional value and enhance the durability of their supply chains.
1. Continued development of the supply chain finance services sector with the launch of several new business activities /ventures by the end of 2016.
2. Tools and policy frameworks that companies can use to assess the benefits and cost of the application of various short-term supply chain finance arrangements.
3. Tools that companies can use to evaluate the long-term impact of long-term supply chain finance arrangements and assist in reaching strategic investment decisions.
4. Training simulation tool to educate and train corporates, banks and other stakeholders about the application and benefits of Supply Chain Finance.
5. 4 academic publications in relevant top journals and/or submitted to relevant conferences.