An Assessment of Supply Chain Finance and Working Capital Management in Organizations

Abstract

The wave of globalization have dispersed supply chain internationally as production moved beyond national boundaries. Information Technology &communication have made the operations of supply chain much easier and all pervasive. The demands for operating globally has increased and businesses have transformed and identified valuable hidden sources to tap liquidity from within their own processes. [1]. Supply chain finance (SCF) is a hot topic in business circles and connects with supply chain management and trade finance. Organizations the world over are trying to merge the approach of supply chain management and trade finance into tangible benefits. With cash drying up & credit squeeze, Organizations are tapping new sources to finance their working capital needs and avenues for cost reduction are being explored in the entire supply chain. Financial managers have taken the lead to acquirecash and generate savings from supply chain logistics. For Organizations, working capital management is a key priority for increasing profitability without compromising on the day-to-day liquidity available for business. SCF is a niche segment in liquidity management & enormous value can be derived by pulling unnecessary cash locked from the processes in supply chain. This paper is an attempt to study the various supply chain finance topics in discussion today and how it is affects the working capital of an Organization. [2]